{"id":1092,"date":"2024-03-21T17:02:37","date_gmt":"2024-03-21T17:02:37","guid":{"rendered":"https:\/\/blog.iese.edu\/mim\/?p=1092"},"modified":"2024-04-01T09:56:55","modified_gmt":"2024-04-01T09:56:55","slug":"for-women-early-promotion-is-vital-to-reducing-the-gender-pay-gap","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/mim\/for-women-early-promotion-is-vital-to-reducing-the-gender-pay-gap\/","title":{"rendered":"“For women, early promotion is vital to reducing the gender pay gap” by Marta Elvira and Isabel Villamor, with Cristina Quintana-Garcia."},"content":{"rendered":"
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Getting promoted young is a virtuous circle that raises pay expectations for everyone, but especially women.<\/h3>\n

The time taken to reach top positions plays a critical role in determining pay for both men and women, but especially for women,\u00a0according to a new study<\/a>\u00a0by IESE\u2019s\u00a0Marta Elvira<\/a>\u00a0and\u00a0Isabel Villamor<\/a>, with Cristina Quintana-Garcia.<\/p>\n

The authors found that executives who had shown early promise and been promoted younger earned more than those who had followed a more typical timeline. And this \u201caging\u201d effect was stronger for women than men.<\/p>\n

While youth is rewarded, the reverse also applies: employee age negatively correlates with earnings and upward mobility. When promotions to executive positions occur later in life, women tend to receive less financial compensation than men. In other words, there\u2019s a penalty for women who are late professional bloomers.<\/p>\n

The main culprit was variable compensation \u2013 performance-based remuneration that frequently makes up the lion\u2019s share of executive salaries. Variable compensation is largely subjective and lacks transparency, allowing bias to creep in.<\/p>\n

Youth and success signal virtue<\/strong><\/h3>\n

Early promotion works to counteract prejudices. A young manager stands out as unusual and sends a signal of outstanding performance. This is especially true in sectors like law and accounting, where age is venerated for the experience it brings. In such contexts, a young manager sends a strong signal of being something special.<\/p>\n

Such thinking applies to women in particular because it overrides negative gender stereotypes. These positive perceptions can lead to further promotions, creating a virtuous circle: the early vote of confidence creating a cascade of subsequent, self-reinforcing success.<\/p>\n

Cutting through the bias<\/strong><\/h3>\n

Both men and women are subject to bias in the workplace, although in different ways. Younger women are viewed with caution \u2013 \u201cwhat if she leaves to have a baby?\u201d And when they are hired as managers, it is frequently to perform \u201caesthetic labor,\u201d i.e., to improve company optics in client-facing roles.<\/p>\n

Men can face bias too, usually relating to commitment \u2013 \u201cIs he already looking for his next job?\u201d Still, this doesn\u2019t hurt their career prospects as much.<\/p>\n

As leaders, recognizing these biases is important because of their impact on people\u2019s careers. Previous research has demonstrated that young men tend to be assigned to complex jobs quickly after graduation, setting them up for the virtuous circle and improving their salary expectations throughout their careers. The opposite is true for young women, especially in male-dominated fields, where they tend to be assigned to more clerical jobs within their teams, limiting their experiences at the time of promotion.<\/p>\n

Getting into the virtuous circle early is therefore key for women, in a world where they need to consistently go above and beyond to reach the top levels of management.<\/p>\n

Becoming a premium leader<\/strong><\/h3>\n

Though it seems a bleak picture \u2013 the gender pay gap in the United States today is estimated at 15%, and in the EU at almost 13% \u2013 there are some silver linings. The scarcity of women at the CEO and CFO level will likely create a greater demand for talented, driven women, placing upward pressure on pay. Women receive a premium in firms looking to achieve diversity targets, so an impressive early-career trajectory can even give them the edge in terms of compensation.<\/p>\n

Leaders should be aware of biases in task assignments and early promotion decisions, increasing transparency of variable compensation and sticking to objective evaluation criteria. Mentorships and sponsorships could also be instrumental in helping \u2013 and keeping \u2013 women on the virtuous circle.<\/p>\n

And to all motivated women reading: lean into those promotions as soon as you can. Positioning yourself for advancement now can have salary repercussions throughout your entire career.<\/p>\n

About the research<\/strong><\/h3>\n

The study used complete professional data from 803 executives from the ExecuComp database, focusing on public high-technology manufacturers in the U.S. \u2013 a sector with diversity challenges, a strong inclination toward youth and a history of ageism. The study was partially supported by the Santander Center for Corporate Social Responsibility at the University of Malaga (Spain) and the Chair of Family-Owned Business at IESE Business School.<\/p>\n

\"\"<\/a><\/p>\n<\/div>\n

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Prof. Marta Elvira<\/strong><\/div>\n
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Professor in the Strategic Management and Managing People in Organizations departments at IESE. She is holder of the\u00a0Chair of Family-Owned Business<\/a>, and is an expert on employee earnings and performance, social inequality and human capital development.<\/p>\n

\"\"<\/a><\/p>\n<\/div>\n<\/figcaption><\/figure>\n

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Prof. Isabel Villamor<\/strong><\/div>\n
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Assistant Professor in the Managing People in Organizations Department at IESE. She is an expert on virtual work, the future of work, and gender and career equality.<\/p>\n<\/div>\n<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Getting promoted young is a virtuous circle that raises pay expectations for everyone, but especially women. The time taken to reach top positions plays a critical role in determining pay for both men and women, but especially for women,\u00a0according to a new study\u00a0by IESE\u2019s\u00a0Marta Elvira\u00a0and\u00a0Isabel Villamor, with Cristina Quintana-Garcia. The authors found that executives who… <\/p>\n

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