Gender Pay Gap and its Impact on Organizations

This report discusses the concept of gender pay gap and its impact on organizations. It explores the positive and negative aspects of reducing the gender pay gap and highlights the need for organizations in Australia to take action. The report provides insights into the Australian context and the importance of promoting gender equality for increased efficiency and effectiveness.

Running Head: MANAGEMENT
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Critical thinking and decision-making
5/26/2019

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Contents
Introduction...........................................................................................................................................2
Gender-pay gap and Impact on Organisations.......................................................................................2
Affirmative side in context to issue of gender pay-gap......................................................................3
Negative side of the issue of ‘gender pay-gap’..................................................................................4
Conclusion.............................................................................................................................................5
References.............................................................................................................................................6

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Introduction
The discussion in this report will discuss management concepts in reference to the
modern business organisations and the related aspect. The topic on which the discussion will
be based in this report is “Organisations should undertake action to reduce their gender pay
gap”. A common factor affects the efficiency and overall working of the organisations. In
many organisations around the world, it has been a common scenario that women or female
workers are paid less than the male workers have. A number of reasons and organisational
policies act as the major factor behind the issue of gender pay gap. Thus, the report will enlist
the positive and negative side of the topic, and the analysis will reflect upon the Australian
organisations and their leading performance.
Gender-pay gap and Impact on Organisations
The differences in the pay or remuneration to the male and female workers, in any
organisation is defined or known as gender pay gap or gender wage gap. There are other two
concepts which are related with the gender based pay or gender pay gap, i.e. unadjusted pay
gap and adjusted pay gap. In context to the latter, it has been analysed that the person who
takes maternity leave, for an example in the case of women, then they will be paid less than
other people in the organisation. For an instance, in United States it has been observed that
the unadjusted average salary or pay to the female workers has been found to be 78% of the
pay to the male workers. The reasons or causes behind the practice of unequal or
differentiated pay to both male and female workers may be an individual’s own choice, and
the other internal and external factors of the organisation. Examples, based on three factors or
parameters are mentioned below (Schofield-Georgeson, 2018).
An individual’s, employee’s own choice, or voluntary choice may include the
willingness to work part-time only even if the opportunity or job is provided as full-time. In
this case, there is no role of the organisation or employer towards the reduced or low pay
between workers (Preston, 2018). On the other hand, innate or internal choice of the person
may be defined as the involuntary choice or aspect is working at a low-skill or low-pay scale
job due to lack of enough capabilities or competent as per the job. the last major cause which
is commonly found in the present day organisations include the external factor, or the
prejudiced nature of employers or managers, which creates discrimination amongst their

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male and female worker in terms of pay. Thus, it can be stated that the causes for ythe
difference in remuneration includes the differences in qualifications and discriminations,
wage structure. It also includes rewards or benefits for the skill and employment in some
particular sectors, contributes to gender-pay gap (Winchester & Browning, 2015).
In Australia, “equal pay for equal work” has been implemented in the country in the
year 1969, and furthermore the act for preventing discrimination on the grounds of sex, was
legislated in the year 1984. In the particular region, differences Gender pay gap in Australia
has been a major concern for the effectiveness of their workers, and the statistics for the issue
remained steady between 160-190% over the period of 20 years (Schofield-Georgeson,
2018).
However, from the study on the critical gender pay gap in the country, it has been
found that average male workers are employed at high pay scale work. To mention the
statistics of the pay gap in the region, it varies within the nation’s state and territory.
According to the state and territory, gender pay gap is lower in Victoria, i.e. 9.3% and higher
in the parts of Western Australia, i.e. 23.1%. Gender pay gap is increasing in Australia at a
high rate, and was termed as a ‘mid-range performer’ in terms of gender-equality, stated in
OECD. Thus, organisations in Australia must work or take action to reduce the gender pay
gap and ensure high productivity (Sarkar et al., 2018).
Affirmative side in context to issue of gender pay-gap
Gender-equality is a major or critical concern for the organisation who aims to
perform at their best, and increase their profitability and success in the long-run. For
attaining this, it requires employers to emphasize on the aspect that all the workers have equal
opportunities, and are paid fairly for their work. The positive aspects of the topic are multi-
fold and lead to many advantages in the organisations. One major positive or affirmative side
of the actions for reducing gender pay gap can be found in economic terms. Promoting the
gender equality and ensuring equal and adequate remuneration to the women as like men will
lead to numerous benefits (Young, 2016).
Actions leading to better pay to women will foster the sense of social justice and
equal opportunities in the society as a whole. Valuing the skills or abilities of women and
paying them equal as their male colleagues will reduce poverty and increase their access to
the healthcare and education facilities and thereby contribute to the economic success of

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the future household. Therefore, Australian organisations must take action to reduce the
pay gap to increase the efficiency and effectiveness of all employees through promoting
gender equality (Charlesworth & Macdonald, 2015).
Thus, one of the major step that has been taken byAustralian organisations is to
evaluate the compensation strategy, and ensure a pay rise to the women at different
positions, especially to the lower level women workers. For attaining equality, the only
model i.e. Australia’s gender equality reporting scheme is a model that states that the
employers must submit the data to the WGEA i.e. Workplace gender equality authority. The
companies in Australia also embraced the element of diversity and organised ‘diversity
training programmes’ and ‘leadership development organisations’. Woolworth’s supermarket
can be quoted to be one significant example of the Australian organisation, that fostered
diversity and reduced gender pay gap. Organisation implementing programmes towards
eliminating the gender pay-gap, achieve high levels of operational efficiency. Moreover, it
increased the flexibility in the organisations for both men and women workers (Australian
Government, 2018).
Negative side of the issue of ‘gender pay-gap’
Gender-pay gap affects or leads to many consequences, i.e. productivity and
efficiency of women at workplace, and leading to overall impact on the economy.
Therefore, it state the need for the organisations and employers to combat the issue of gender
pay gap and increase the organisational effectiveness. Along with the positive or
affirmative aspects or side of the actions to reduce gender pay, a number of negative
aspects are also found in Australian organisations. However, from the above discussion it
has been understood that actions or programmes to reduce the pay gap has led to benefits to
the organisations (Kennedy et al., 2017). Therefore, it can be stated, there may be less
disadvantages or negative points in respect to the given topic. The organisations that take
action to reduce the gender based pay gap provided high wages or salary to their women
workers, which in turn led to the feeling of bias in the male workers. In Australian
organisations it was assumed as negative or wrong strategies of the employers towards their
male workers. This was linked to the aspect of efficiency and proficiency related to the job
and job roles in the women. As male workers felt that women or female workers in the
organisation were paid higher even at low efficiency or skills to perform the job (Borland &
Coelli, 2016).

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Furthermore, initiating and implementing the programmes related to reducing gender
pay gap was assumed to be time-consuming and involved a high costs or expenditures. As
organisations need to make heavy expenditure on their diversity training programmes, and
leadership development programmes. An aspect of financial solvency has been found to be
a major factor affected by equal pay in the organisation. This is due to the fact that by
promoting equality, and ensure reduced pay gap amongst men and women, the
differentiation or delineation between the job roles became difficult. As a result, all the
employees i.e. men and women were classified as equal and paid as such, regardless of their
actual duties or job function performed. This in turn may lead to heavy loss of productivity
for the Australian organisations, and lead to reduced efficiency in the future (Young, 2016).
Conclusion
To conclude analysis through the report, it has been analysed that the aspect of equal
pay or reduced gender pay gap is considered vital for improved organisational efficiency.
The differences in the pay to different genders have become a crucial problem at the
workplace, discouraging employees to work with their full commitment towards the
organisations. The discussion in the above report has described and statistics of the ‘gender-
pay gap’ in the Australia, over a period. Moreover, report highlighted the positive i.e.
affirmative and negative side of the pay-gap amongst men and women workers. From the
analysis, it has been observed that taking actions to reduce the gap resulted in numerous
benefits, to both i.e. organisations and employees. Hence, organisations must take action or
implement programmes to diminish gender pay gap in the organisations and ensure increased
efficiency, and high success in the future.

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References
Australian Government. (2018). International Gender Equality Reporting Schemes. Retrieved
from: https://www.wgea.gov.au/data/wgea-research/international-gender-equality-
reporting-schemes
Blau, F. D., & Kahn, L. M. (2017). The gender wage gap: Extent, trends, and
explanations. Journal of Economic Literature, 55(3), 789-865.
Borland, J. & Coelli, M. (2016). Labour market inequality in Australia. Economic
Record, 92(299), 517-547.
Charlesworth, S. & Macdonald, F. (2015). Women, work, and industrial relations in Australia
in 2014. Journal of Industrial Relations, 57(3), 366-382.
Equality Human rights. (2018). Why is equal pay important? Retrieved from:
https://www.equalityhumanrights.com/en/advice-and-guidance/why-equal-pay-
important
Kennedy, T., Rae, M., Sheridan, A. & Valadkhani, A. (2017). Reducing gender wage
inequality increases economic prosperity for all: Insights from Australia. Economic
Analysis and Policy, 55, 14-24.
O’Reilly, J., Smith, M., Deakin, S. & Burchell, B. (2015). Equal pay as a moving target:
International perspectives on forty-years of addressing the gender pay
gap. Cambridge Journal of Economics, 39(2), 299-317.
Preston, A. (2018). The structure and determinants of wage relativities: evidence from
Australia. United Kingdom:Routledge.
Sarkar, S., Phibbs, P., Simpson, R. & Wasnik, S. (2018). The scaling of income distribution
in Australia: Possible relationships between urban allometry, city size, and economic
inequality. Environment and Planning B: Urban Analytics and City Science, 45(4),
603-622.
Schofield-Georgeson, E. (2018). Regulating executive salaries and reducing pay disparities:
Is pay disclosure the answer?. Journal of Australian Political Economy, The, (81), 96.

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Winchester, H. P. & Browning, L. (2015). Gender equality in academia: a critical
reflection. Journal of Higher Education Policy and Management, 37(3), 269-281.
Young, Z. P. (2016). Gender and development. In Handbook on Gender in World Politics.
United States: Edward Elgar Publishing.