YWCA Equal Pay Awards 2016:
A Discussion on Equal Pay with Dr Keith Macky
Associate Professor Keith Macky (PhD, AFHRINZ) has spent over 30 years as a researcher, teacher
and practitioner in Work Psychology and Human Resource Management, with a particular interest in
remuneration and its contribution to the development of High-Performance Work Systems and
strategy implementation. In addition to dozens of conference presentations, Dr Macky has
coauthored six books (three specifically on remuneration), multiple book chapters and over 30
academic research articles. He currently serves as the foundation Associate Professor of Business
and Enterprise at the Music and Audio Institute of New Zealand (MAINZ), a division of Tai Poutini
Polytechnic. Previous to this, he was an Associate Professor of HRM at the Auckland University of
Technology (AUT). He has also held positions at the University of Auckland and Massey University,
as well as senior consulting roles in Cap Gemini, EY and KPMG. He was made an Associate Fellow of
the Human Resources Institute of New Zealand (AFHRINZ) in 2010 for contributions “to the
advancement of knowledge and professional practice in HRM.”
Dr Macky is a judge and an advisor for the YWCA Equal Pay Awards 2016 and shares his insights into
the gender pay gap: causes, solutions and challenges to overcome.
Systemic inequality as a root cause of the problem
It has been over 40 years since the Equal Pay Act of 1972 was passed into law. Since that time, yes
progress has been made and yes, compared to other member nations of the OECD, New Zealand has
one of the smallest gender wage gaps. But work remains to be done to reduce that gap further and
then eliminate it. There remains clear and incontrovertible evidence that the work women do
remains undervalued and underpaid compared to men in the same occupations, as well as when
compared to jobs of comparable worth. Even in those occupations and industries where women
dominate, men are still paid more.
And a great deal of research has been done to try to understand and explain why this should be.
Some of this attempts to blame women themselves for their situation. As in: women are paid less
because they make poor life choices about the types of (badly) paid occupations they enter; or they
have fewer qualifications than men and therefore get ruled out of higher paying roles; or have less
work experience and lose seniority because they take time out from paid work to have and raise
children; and so on. And yes, some of this may account for a proportion of the gender wage gap. But
not all of it. We need to be very clear that these standard reasons given for gender wage gaps do
not by any means explain away all the variance between what men and women earn for the same or
comparable work. The gender pay gap is far from fully accounted for by the standard explanations of
occupational choice, qualification differences and the ‘motherhood penalty’. We are left then with is
what appears to be an intractable problem of wage inequality. And intractable problems tend to
have complex causes that defy simple solutions.
In part, the root cause of the gender wage gap is historical and relates to a time when women’s work
was routinely devalued, their contribution to business undervalued, and gender discrimination was
normalized. It was socially and culturally acceptable for men to be paid more for the same or similar
work than woman, and for women to be excluded from doing certain jobs. And while such
discrimination is now outlawed and widely regarded as socially unjust, residual patterns of
systematic inequality remain in our organizational systems that set rewards and remuneration
levels, that determine who gets hired or promoted into what roles, that influence decisions on who
will be given opportunities to develop their skills and obtain further qualifications, and who will be
given the responsibilities and role challenges that heavily influence who moves into leadership roles,
or not.
And such organizational systems are remarkably resistant to change. Everyone gets socialized into
them from the day they start working; they become ‘the way things are done around here’; people’s
jobs get structured around operating and maintaining them; and so we tend to avoid reviewing such
systems and modifying them unless forced to. For example, by a merger, or a major restructuring, or
the implementation of an organisation wide software system such as an ERP, or by a union. Or you
get sued. And even then, the temptation is to recreate what went before and justify it by calling it
“best practice”.
And so patterns of ritualized and systematic gender discrimination are sustained. And are typically
hidden, even to those who utilize them. Few managers and members of the C-suite will be
consciously and deliberately setting out to break the law on pay equality. Rather than deliberate
discrimination, instead what is likely to be happening is a form of indirect discrimination where
decisions made for other purposes, without consideration of their gender impact and probably
historically, then become a long term dimension for unconscious bias against women.
On another level, such discriminatory systems are maintained for fairly mundane reasons. One of
these is New Zealand’s long held cultural fixation with pay secrecy. Unlike those in other western
developed economies, it is still common to see job advertisements that do not mention
remuneration at all, let alone the actual pay grade for the job. We still don’t like to talk about our
own income, or pay in your company and how it is distributed. And secrecy helps maintain the status
quo of covert discrimination where women are penalized.
Even if people are prepared to accept that gender pay gaps exist, they may be less willing to accept
they exist in their own business. The HR function itself must accept some responsibility for this. HR
practitioners are the gatekeepers and guardians of company level remuneration data, best practice
reviews and internal HR audit processes. Yet are they driving the pay equality message home to the
senior management team? Are they analyzing and reporting on company level pay from a gender
perspective, or indeed on any other dimension of discrimination proscribed under New Zealand law?
If not, why not?
My point is simple. The easy wins on the gender pay gap have probably already been achieved in
New Zealand. Yes there is an ongoing need for reeducation, both from older companies and newer
organizations, but it now needs to be more than just about raising consciousness. What remains is
an intractable complex problem and complex problems have complex solutions. It does however
begin with data. Without data on the existence of and degree of gender pay gaps at the company
level, and indeed at the strategic business unit level, managers and other decision makers are poorly
served to make informed decisions on what to do about it.
And when pay gaps are discovered, there may be a reluctance to accept that discrimination is behind
the issue. Deal with that by flipping the thinking from defensive denial to rational problem solving.
Ask yourself: “If it’s not about discrimination, what is it about? If gender is not the cause, then what
is? And can I defend that analysis?” Be prepared to show the evidence and prove it’s not gender.
Social justice and moral considerations aside, doing nothing about pay inequality and inequity is not
a sensible business decision. Women and their families aren’t the only ones who bear the cost of
pay inequality; employers do too and the costs are high. But they’re largely unhidden because if you
don’t have the foresight to run the data, to conduct the equity audits and understand your own
equal pay status, you also won’t understand the cost of ignoring the issue either. Example signs and
signals will include higher voluntary turnover among women, and particularly among newer hires;
lower productivity levels compared to industry standards; heightened employee dissatisfaction
levels around remuneration issues that show up in exit interviews and employee surveys; increased
personal grievances and perhaps collective action around pay inequality; and more informal
channels of people sharing their dissatisfaction with their fellow workers, team leaders or frontline
supervisors, customers, and others outside the company. These are all indicators that pay inequality
is having an impact on your business. So crunch the numbers, interrogate the situation, get the
evidence. Determine if pay equity is a problem and if so how much of a problem. Then fix it. Begin
by looking at the whole picture of possible root causes. It might be simple, or it might in the complex
layers of organizational processes and systems that create and sustain it. If so better to disrupt that
system yourself or someone else just might.