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Female managers give out better pay packages than male managers, new study reveals: 'We were shocked at how drastic the discrepancy was here'

Sep 2, 2022, 23:20 IST
Business Insider
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  • A study looked into the role of a manager's gender in deciding how much to compensate workers.
  • Female managers were more likely to pay workers adequate wages even if it came out of their pay.
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A new study found that female managers are more likely than male managers to give workers an adequate pay package.

Researchers from the Karlsruhe Institute of Technology conducted two studies to see how managers choose pay for workers, and found that it depends on multiple factors, including a manager's gender, if the manager has experience with the worker's job, and if there are any incentives.

The study found that both male and female managers "generally" choose to pay themselves more, in turn paying workers less. But male managers are more likely than female managers to keep more pay for themselves.

Female managers were more consistent in choosing fair pay for workers, and their choices about pay are less affected by incentives like paying themselves more, the study found. Male managers, on the other hand, more often chose to benefit themselves when it came to weighing their pay against workers' pay, according to the study.

The results point to the importance of diversity on managerial boards, the study said, adding that it may help reduce pay disparity between men and women, and "foster work atmosphere."

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Women in European financial firms hold 41% of leadership roles, an increase of almost 2% in the past year. Meanwhile, in the US, a lower percentage of leadership roles at financial institutions are filled by women at 33%.

"Various studies observe that women make more selfless and moral decisions than men," Nora Szech, one of the study's authors, said in a press release. "However, we were shocked at how drastic the discrepancy was here. Our study shows that diversity in the executive ranks is important if the atmosphere in a company is to be appreciative and wage inequality is to be limited."

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