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The pay gap and sexual harassment must be addressed simultaneously

Wednesday, October 25th, 2017

Over the past few days, more and more men have continued to resign or at the very least publicly confront accusations of sexual harassment, and this trend shows no sign of slowing down.

On Wednesday, former President George H.W. Bush apologized for groping actress Heather Lind (with a caveat that it was an “attempt at humor“). On Tuesday, Leon Wieseltier, former literary editor of The New Republic, apologizedfor “offenses against some of my colleagues in the past” after Emerson Collective, a for-profit organization, stopped supporting Wieseltier’s project, a new magazine. On Monday, a top labor executive who led the Fight for 15 campaign resigned. Former and current Service Employees International Union (SEIU) staffers told BuzzFeed that SEIU Executive Vice President Scott Courtney had sexual relationships with young female staffers who were later promoted. Last Friday, Lockhart Steele, editorial director at Vox Media, was removed from his position after a former Vox employee, Eden Rohatensky, wrote a post on Medium that led to a company investigation. (Rohatensky did not mention Vox or anyone at Vox by name but did say “one of the company’s VPs” put his hands on them and started kissing them.)

The alleged sexual harassment and assault has ranged from the entertainment industry to the financial industry. On Sunday, The Wall Street Journal reported that Fidelity, a financial services corporation, has its own problems with sexual harassment. Also on Sunday, the Los Angeles Times reported that 38 women came forward to accuse Director James Toback of sexual harassment. It took a few hours for the number of women accusing Toback to double, and now, the reporter says that a total of 193 women contacted him since his initial expose.

But if companies are going to tamp down on sexual harassment, they need to do more than spend money on sexual harassment training and hope that’s enough. As Vox reported, sexual harassment trainings have become a legal precaution more than anything, and the data shows that they are not effective at lowering incidents of harassment. Trainings often help people realize what counts as workplace harassment, but they don’t actually change change their views or actions. Instead of simply holding trainings and hope they work, employers must make it clear that there is a culture of accountability and transparency for everyone, even executives and people who consistently provide results for the company — or the “rainmakers.” They also have to ask themselves important questions about the performance review process and how it determines pay, because women’s lack of economic power in their workplaces often makes them vulnerable targets for sexual harassment. Are senior employees held accountable for their biases in performance reviews?

Brit Marling emphasized this point when she told her own story about sexual harassment and a meeting with Harvey Weinstein that sounds like so many others. As in many other cases, Weinstein’s assistant said the meeting had been moved from a hotel bar to his hotel suite. When she got there, Weinstein asked her to shower with him. She left the room, but as it all unfolded, Marling said she was very aware of the power he had over her career. She wrote:

Men hold most of the world’s wealth. In fact, just eight men own the same wealth as 3.6 billion people who make up the poorer half of humanity, the majority of whom, according to Oxfam, are women. As a gender whole, women are poor. This means that, in part, stopping sexual harassment and abuse will involve fighting for wage parity.

Last year, the gender wage gap widened, according to a March Institute for Women’s Policy Research analysis. The ratio of median weekly earnings for women working full time compared to men decreased by 1.4 percent. Even improvements in the economy don’t help women get better-paying jobs, since those usually go to men, in part because of occupational segregation that pays women less when they are in fields dominated by women.

Bias in performance reviews certainly doesn’t help. Paola Cecchi-Dimeglio, a postdoctoral research fellow at Harvard University, shared her findings on individual annual performance reviews and bias in Harvard Business Review. Cecchi-Dimeglio found that women were 1.4 times more likely to receive critical subjective feedback, not positive feedback or critical objective feedback and that traits that were considered negative in women were often interpreted as positive in men. Where a man was considered careful for taking his time on a project, a woman was told she had “analysis paralysis.” Women’s successful performance in the office was often perceived to be the result of hard work or luck rather than abilities and skills.

Cecchi-Dimeglio said that the solution to dealing with some of these issues of gender bias include using more objective criteria, making reviews more frequent, which appeared to cut down on gender bias, and using a broader group of reviewers. A 2008 study by Emilio Castilla focused on the impact of lack of transparency and accountability on performance appraisal and performance pay.It found that employers adopting merit-based practices and policies, which are meant to motivate employees and foster a meritocracy, can actually increase bias and reduce equity in the workplace if the policies have limited transparency and accountability. The study noted that some experts on performance evaluation practices say that there should a separation of performance appraisals and salary discussion, in part because employees will focus more on the monetary amount they receive than the feedback, and managers can “manipulate performance ratings to justify salary increases” they want to give to certain employees.

Another 2012 study also reinforces the idea that transparency and accountability are central to dealing with pay inequities. Janice Fanning Madden, a Wharton real estate professor and a professor of regional science and sociology at the University of Pennsylvania, looked at the gender pay gap among stockbrokers.Madden found found that women were assigned inferior accounts, so they would earn lower returns and commissions, and as a result, they would be less likely to receive support staff, nice offices, and mentors. Using information about sales transferred by management from one broker to another, she analyzed performance and found that when women had clients who had the same potential for high commissions, they produced the sales results as men. This demonstrates the need for accountability for senior executives who are as subject to gender bias as anyone else.

Ariane Hegewisch, a researcher at the Institute for Women’s Policy Research who focuses on workplace discrimination, said that although Fidelity’s performance evaluation system, which women at the company have been critical of, may appear to be fair, it is lacking accountability for senior management. Hegewisch gave an example of a common problem in businesses and organizations.

“So the section heads have been told you have the power to assess people and there doesn’t seem to be a lot of control or monitoring of what they are doing,” Hegewisch said. “There are organizations where the HR department scrutinizes what section heads do and that has an element of performance accountability for those decisions, and that seems to be missing to some extent in the Fidelity system.”

Hegewisch added, “What it is interesting about this is that it was clearly not only women who felt aggrieved by this system. It was also some men who said it was unfair and led to inequitable outcomes and to favoritism.”

When it comes to sexual harassment claims, the situation is similar, Hegewisch added. People need to know that there is accountability for senior employees and rainmakers. There also needs to be transparency so that people know why someone left the company.

You can’t have the best designed systems if the culture is not supportive or the hierarchy is not seen as supportive. It will not generate the results that you want,” Hegewisch said. “We’ve told organizations to set up external complaint lines for sexual harassment cases. And then it turns out that in some organizations, they hand it over to HR and tell them who it is and nothing happens anyway.”

Even if a company is handling sexual harassment claims well, it needs to clear to employees what happened or why someone was dismissed. Of course, there are sometimes legal barriers to companies disclosing information about someone’s misconduct.

“If you do the right thing and pretend it was for a different reason, [it matters that employees] know about it and believe this was a way the company is backing them up when something like this happens. You have to be able to communicate it and if you can’t communicate it, you’re tying yourself up,” she said.

When it comes to reporting harassment, Hegewisch said, “There has to be some proof that people can take away that this is an issue that is serious that the company takes seriously.”

That means setting up systems to keep senior managers in check, not simply setting up a training for employees on what sexual harassment is. Since 2010, harassment complaints at the federal level stagnated or slightly rose, according to recent Equal Employment Opportunity Commission (EEOC) data. The report explained that the sexual harassment training provided over the past few decades has not been effective as a prevention tool, according to an EEOC report.

Researchers also recommend that employers try to achieve a gender balance at every level of their organization to reduce harassment and that employers need to provide assurances that people who report harassment will not be retaliated against. They need to guarantee protection against non-employer retaliation and confidentiality of complaints, when possible. The policies on how to report harassment should be clear to employees and any training on harassment should include an explanation of what constitutes employer retaliation.

This article was originally published at ThinkProgress on October 25, 2017. Reprinted with permission.

About the Author: Casey Quinlan is a policy reporter at ThinkProgress. She covers economic policy and civil rights issues. Her work has been published in The Establishment, The Atlantic, The Crime Report, and City Limits.

Can McDonalds Make A Profit While Paying $15 An Hour?

Thursday, August 8th, 2013

Bryce CovertWhile the average McDonalds employee in the United States makes just above the $7.25 minimum wage, that story is different in other countries. As Jordan Weissmann reports at The Atlantic, the minimum wage for full-time adult workers in Australia is $14.50 and McDonalds employees just negotiated a 15 percent raise by 2016. Yet the company has about 900 locations in the country.

Meanwhile, its profit margins at company-owned restaurants are higher in Europe than in the U.S. despite many countries there having a higher minimum wage. France’s minimum is about $12 an hour, and yet there are more than 1,200 locations there.

Residents of other countries pay more for their Big Macs, in part at least to make up for those extra costs, but the increase in prices is not drastic. Australians paid an average of $4.62 in U.S. dollars for a Big Mac in July and it cost $4.66 in the eurozone, while Americans paid $4.56. That’s a difference of about 6 to 10 extra cents, which would mean raising Big Mac prices a little over 2 percent in the U.S. to come equal with those in Europe.

Higher prices are related to the fact that the company does spend more on the cost of labor in other countries. In the U.S., it spends about 25 percent of its expenses on workers at the locations it owns, and franchises usually assume labor costs will take up about 30 to 35 percent. Worldwide, those costs have been found to come to closer to 45 percent of expenses. But the company reported nearly $5.5 billion in net income overall last year, up from about $2.4 billion in 2007, with more revenues coming from Europe than the U.S.

Australian locations have other ways to keep labor costs low, like exploiting a loophole that only requires an $8 wage for teenagers. Weissmann also reports that the company likely gives its higher paid European employees more responsibility and so ekes out more productivity from those workers. While productivity has risen in the U.S., wages haven’t.

But it’s clear, even to the company itself, that its American wages are not enough to get by on. It released a sample budget for employees that suggested paying nothing for heat, getting a second job, and spending just $20 a month on health care. While it claims to be an above minimum wage employer in the U.S., its average wages are mere cents more.

The inability to get by on its low wages has sparked pushback from workers across the country, with fast food workers striking in nine different cities. They are calling for a $15 minimum wage, the same as Australia’s, which is higher than President Obama’s $9 an hour proposal and Congressional Democrats’ of $10.10 an hour.

This article originally appeared on ThinkProgress on August 6, 2013.  Reprinted with permission. 

About the Author: Bryce Covert  is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman.

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