How and why do the careers of men and women
differ? What policies could reduce the differences?
The gender wage gap is largely due to men and
women holding different kinds of jobs. This job segregation is partly driven
by gender differences in careers in corporate hierarchies. Research has
shown that the careers of men and women begin to diverge immediately upon
entry into the labor market and that subsequent career progress exacerbates
the divergence. This divergence of career progress explains a large part of
the gender wage gap. Understanding how and why the careers of men and women
differ is necessary to design effective policies that can reduce the gender
differences in hierarchies.
Which leadership techniques and tools should
digital leaders use to communicate effectively with remote teams and gig
Remote work and digital collaborations are
prevalent in the business world and many employees use digital communication
tools routinely in their jobs. Communication shifts from face-to-face
meetings to asynchronous formats using text, audio, or video messages. This
shift leads to a reduction of information and signals leaders can send and
receive. Do classical leadership and communication techniques such as
transformational or charismatic leadership signaling still work in those
online settings or do leaders have to rely on transactional leadership
techniques such as contingent reward and punishment tools in the remote
Employee ownership generally increases firm
performance and worker outcomes
Employee ownership has attracted growing
attention for its potential to improve economic outcomes for companies,
workers, and the economy in general, and help reduce inequality. Over 100
studies across many countries indicate that employee ownership is generally
linked to better productivity, pay, job stability, and firm survival—though
the effects are dispersed and causation is difficult to firmly establish.
Free-riding often appears to be overcome by worker co-monitoring and
reciprocity. Financial risk is an important concern but is generally
minimized by higher pay and job stability among employee owners.
Do performance-related pay and financial
participation schemes have an effect on firms’ performance?
A growing number of firms offer compensation
packages that link pay to performance. The aim is to motivate workers to be
more efficient while also increasing their attachment to the company,
thereby reducing turnover and absenteeism. The effects of
performance-related pay on productivity depend on the scheme type and
design, with individual incentives showing the largest effect. Governments
often offer tax breaks and financial incentives to promote
performance-related pay, though their desirability has been questioned due
to large deadweight losses involved. The diffusion of remote work will
increase the relevance of performance-related pay.
To what extent can different attitudes toward
competition for men and women explain the gender gap in labor markets?
Differences in labor market outcomes for
women and men are highly persistent. Apart from discrimination, one
frequently mentioned explanation could be differences in the attitude toward
competition for both genders. Abundant empirical evidence indicates that
multiple influences shape attitudes toward competition during different
periods of the life cycle. Gender differences in competitiveness will not
only influence outcomes during working age, but also during early childhood
education. In order to reduce the gender gap in educational and labor market
outcomes, it is crucial to understand when and why gender gaps in
competitiveness arise and to study their consequences.
A bidirectional relationship between
informality and inequality exists; in transition and emerging countries,
higher informality decreases inequality
Higher inequality reduces capital
accumulation and increases the informal economy, which creates additional
employment opportunities for low-skilled and deprived people. As a result,
informal employment leads to beneficial effects on income distribution by
providing sources of income for unemployed and marginalized workers. Despite
this positive feedback, informality raises problems for public finances and
biases official statistics, reducing the effectiveness of redistributive
policies. Policymakers should consider the links between inequality and
informality because badly designed informality-reducing policies may
Lessons from sports can allow managers to
develop better policies at “normal” workplaces
Economic theory has many predictions regarding
how workers should be paid and how workplaces should be organized. However,
economists’ attempts to test these in the real world have been hampered by a
lack of consistent information about workers’ productivity levels.
Professional sports offer a potential solution, since the performance of
individual sportspeople is easily observed and yet many of the same problems
faced by managers in workplaces still apply. In many ways, sportspeople may
be less atypical of the modern workforce than farm laborers, doctors, or
other groups of workers that are often scrutinized by economists.
Individual bonuses do not always raise
performance; it depends on the characteristics of the job
Economists have for a long time argued that
performance-based bonuses raise performance. Indeed, many firms use bonuses
tied to individual performance to motivate their employees. However, there
has been heated debate among human resources professionals recently, and
some firms have moved away from individual performance bonuses toward fixed
wages only or collective performance incentive schemes such as
profit-sharing or team incentives. The appropriate approach depends on each
company's unique situation, and managers need to realize that individual
bonus plans are not a panacea to motivate employees.
Workers care about employers’ social causes, but
the public sector does not attract particularly motivated employees
Employees are more willing to work and put
effort in for an employer that genuinely promotes the greater good. Some are
also willing to give up part of their compensation to contribute to a social
cause they share. Being able to attract a motivated workforce is
particularly important for the public sector, where performance is usually
more difficult to measure, but this goal remains elusive. Paying people more
or underlining the career opportunities (as opposed to the social aspects)
associated with public sector jobs is instrumental in attracting a more
productive workforce, while a proper selection process may mitigate the
negative impact on intrinsic motivation.
The efficacy of hiring strategies hinges on a
firm’s simultaneous use of other policies
When an employer fills a vacancy with one of
its own workers (through promotion or horizontal transfer), it forgoes the
opportunity to fill the position with a new hire from outside the firm.
Although firms use both internal and external hiring methods, they
frequently favor insiders. Internal and external hires differ in observable
characteristics (such as skill levels), as do the employers making the
hiring decisions. Understanding those differences helps employers design and
manage hiring policies that are appropriate for their organizations.