Maximising compensation: organisational level and industry gender composition effects

Abstract

PurposeThe purpose of this paper is to investigate differences in compensation related to gender concentrations among industries at different organisation levels of management to identify gender‐based patterns of compensation at the macro level not investigated in previous studies that simply suggest industry or occupational differences. Findings provide guidance for selection processes, career path management for maximising compensation and policy‐making.Design/methodology/approachData from the Current Population Surveys and the Standard and Poor's ExecuComp database were used to examine differences in compensation of managers and top executives.FindingsFindings suggest that men and women must seek different paths and endpoints to optimize compensation. Maximising compensation for women requires working as a minority and changing industries. Men, on the other hand, may work in male‐dominated industries at every level or may move to female‐dominated industries at the managerial and executive levels and still receive equitable pay.Research limitations/implicationsThe paper was conducted on a USA sample so further research should examine data from other countries.Practical implicationsIn practice, this paper suggests that men and women must seek different paths and endpoints to optimize compensation. Human resource managers should be aware of these potential biases and try to rectify them within their organisations through the use of appropriate selection and compensation practices. At the macro‐level, policy‐makers can identify patterns of inequity to address.Originality/valueGender‐related difference studies of compensation offer little understanding about how to maximise compensation during one's management career as it progresses through management levels and across industries.