Management Report: Gender Pay Inequity at JP Morgan (Australia)

This report, prepared for the Board of Directors of JP Morgan, addresses the critical issue of gender pay inequity, focusing on the Australian sector. It begins with an executive summary and introduction highlighting the persistent problem of unequal pay scales between men and women in the financial sector, citing relevant statistics and legislative contexts. The methodology involves analyzing company reports, media articles, and academic research to identify key findings. The report reviews factors contributing to the gender pay gap, including bias, discrimination, occupational segregation, and societal norms, and provides a detailed analysis of why organizations should care about this issue. It examines factors supporting equality in gender pay, such as increasing female representation in executive roles and implementing robust pay assessment processes. The report concludes with recommendations aimed at improving pay equity and promoting equal opportunities for women within JP Morgan, emphasizing the importance of addressing unconscious bias and fostering a diverse and inclusive work environment. The report underscores the need for organizational change to achieve gender pay equity and align with evolving legal and societal expectations.

MANAGEMENT
GENDER PAY INEQUITY
STUDENT NAME

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EXECUTIVE SUMMARY
This report has been prepared for the Board of Directors of JP Morgan after finding
key issues in its management. The report has been prepared after analysing various news
media reviews about company’s failure in making equal pay scale for both men and women.
This report has been specially prepared for Australian sector of JP Morgan as Australian
legislations and laws are becoming stricter regarding equal gender pay. From past few
decades this issue has been hovering around in news channels and have become top priority
issue in many organisations. Financial sectors are seen to be most unfair in making pay scale
where men are paid more in comparison of women. Many news channels have been covering
this issue regularly for which it becomes important taking necessary steps to mange gender
pay inequity issue. Being CEO of the company, this report has been prepared for Board of
Directors after finding out necessary changes required in the company’s administrative
department. A critical review about the current issue has been made in this report after which
a thought out recommendation has been provided for improvements in the company.

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Table of Contents
EXECUTIVE SUMMARY.......................................................................................................................2
INTRODUCTION.................................................................................................................................4
METHODOLOGY.................................................................................................................................5
KEY FINDINGS....................................................................................................................................5
REPORT REVIEW................................................................................................................................8
Factors behind gender pay inequity..............................................................................................8
Why should organisations care?..................................................................................................10
Factors supporting equality in gender pay...................................................................................11
RECOMENDATIONS.........................................................................................................................13
CONCLUSION...............................................................................................................................15
REFERENCES....................................................................................................................................16

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INTRODUCTION
The issue of gender pay inequity is one of the management issues that have been
constantly in news and media which has also become a matter of consideration for many
organisations and countries. In Australia, the general gender pay gap is calculated by
organisations Gender Equality agencies (WGEA) in which statistics from Australian Bureau
are utilised. Australia’s current gender pay gap is around 15.3% and since last few decades it
is been hovering around 15% to 19%. The pay inequity is the distinction between men’s and
women’s standard pay for weekly or full time service. The rise in percentage of men’s
earning shows women’s overall reputation in paid services and no comparison of position
between them. According to survey made by ABS and WGEA, gender pay gap favours full
time operational men over women in almost every industry and sectors in Australia
(COMMONWEALTH GOVERNMENT OF AUSTRALIA, 2018). There may be various
factors that results in gender pay inequity like biasness in recruiting and pay decisions,
discrimination, and lack of flexibility in workplace for accommodating care along with time
adjustments requiring responsibilities for senior roles. From the time women enters into a job,
pay inequity gets started. Women’s higher likeness for caring reasons along with likelihood
of part time jobs impacts their lifetime security in jobs. WGEA encourages companies to
make analysis of their pay data in various methods so that pay inequity issues are minimised
after taking effective actions. The gap between remunerations of men and women across
entire organisation reflects hurdles to women for accessing superior and high pay roles in
organisations, mainly in specialist roles, technical and leadership position. This issue has
been recognised in almost every country in which men are favoured for higher pay than
women which result in setback of women’s position in country’s economy.

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METHODOLOGY
To gather data for this report, online survey of company reports were done in which
current trends were given more emphasis. With the help of media article, quality research was
made in which associated industries where the management issue related to gender pay
inequity was seen. News and conference reports were also studied to find appropriate reasons
behind management issues and which issue is found more prevalent in today’s organisations.
TV news videos along with news paper articles added additional support in key findings for
this report. Through academic articles and scholarly reviews this article concludes after
giving considerable recommendations to the readers and Board of Directors of JP Morgan.
KEY FINDINGS
Increase of women representatives in senior and executive roles are directly
associated with lowering of gender pay inequity. Organisations that have low share of women
in executive and leadership roles have an average gap in their pay role double as compared
to the ones who have equal share of women in senior roles. That means 20% in contrast with
10%. In between 2015 and 2016 very few companies were found in reducing gender pay gaps
by increasing the share of women in leadership roles. Another finding shows that gender pay
gap for those participating in graduate programs are nominal but men are found to receive
more top graduate apprentice salaries. These gaps further widens among them according to
different positions of permanent salary earners. Women are underrepresented in constant

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fashion in graduate salary bonds in spite of having highest graduate qualifications in which
few women’s are even paid below subordinates (Manning, 2006).
Figure: Australian genders pay inequity (WEGA, 2018)
Managerial gender pay equity falls whenever the share of women managers increases
which can also be one reason for putting behind women in top positions. However, pay gaps
are seen rising in organisations where female managers are considered more especially in
Social Assistance, Health Care, Education and Training and Retail sector. Gender pay
favours women where there are needs for part time worker as men lag in part time jobs.
Women have been seen more interested in part time jobs where they out-earn men. While
women are favoured for part time roles, the pattern are reversed in senior levels were men are
more favoured. In managerial position, women earn an average 27.1% less than men
according to a recent survey (WEGA, 2017).
The gender gap between men and women are also due to industry demands. According to
another survey, the pay gap of full time workers in both public and private firms seems to be
increasing in financial and insurance industries (Son, 2018). Following it were Hiring and
real estate business with other services related to mining.

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Figure: Gender pay inequity by industry (WEGA, 2018)
The average pay gap between men and women working for full time normally
increases with age, (up to 50) after which it starts decreasing until the age of retirement. The
average gender pay equity is minimal for employees under 20 years of age and the gap
increases between 21 to 34 years after which it remains relatively constant. The pay gap
again increases for 45 to 54 age groups in which women are seen to take more time out of
workforce for taking care of children and other responsibilities. Another findings show that
gender gap is more in higher posts than in junior levels. This may be due to lesser
discretionary pay and depending more upon rewards and collective agreements in junior
levels.

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REPORT REVIEW
Factors behind gender pay inequity
In spite of positive trends, the increase of women entering into job fields can be traced
back to 1950’s pattern when they were only treated as subordinates to male leaders. Along
with it various factors hold back women from inflowing into workforce, especially in full
time jobs, which impacts their advancements in organizations.
Barriers related to culture and society: Due to domestic and household work, many women
opt for part time or flexible jobs. They remain out of job market for enabling flexibility those
results in low hourly costs and weak long term career prospects. Women facing motherhood
have to pay more and the difference between women with child and without child can be
quantified. The penalty they have to pay is by balancing work and family responsibilities that
even results in career breaks. In many organisations, evidence of premium for men highlights
a positive relationship between number of children and men’s wages (Nymoen, 2009).
Occupational segregation: When girls become older, academic sorting in qualification leads
to pay segregation in occupation. Although the ratio of female graduates as compared to men
are more but they stay behind receiving degrees in technical, scientific, mathematical and
engineering fields those are related to higher pay scale. This means that women are more
entitled to lesser pay fields in their career. Occupational choices are even affected by social
norms like stereotyping, lack of information about opportunity and pay distinction.
Surprisingly, there are female dominated industries like Health care, Education, Social
assistance and Retail services but the fundamental issue lies the same where women forms
cluster in comparatively minor positions even in these industries (Daczo, 2012).

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Source: (Gould, 2016)
Lower level position employment: Women are always considered to be placed in
lower positions in workplaces which ultimately results in gender pay inequity. According to a
survey made by Fortune, 500 companies in 2011 stated that women contribute nearly half of
the managerial posts in which only 14.3% were executive officers, in CEO’s position only
3.8% were seen and 16.6% occupied Board of Directors seat (Smith, 2017). Occupation
along with industry sector contributes in accounting for gender pay inequality of about 50%
in which higher paying white collars job are the largest in making gender pay gaps. ‘Glass
ceiling” effect can also be one of the reasons behind women’s lagging behind in senior levels
(Whawell, 2018). Women representatives in higher levels are seen less may be because of
limited talent or barriers that prevent them from showing their talent. These barriers include
work-family conflicts, discrimination and low interest in higher positions. White collar jobs
demands longer and nonflexible work hours that results in family conflicts. Along with it,
favouritism in workgroups also prevents women in climbing up higher positions in
organisations where not many women are seen in leadership roles.

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Figure: Management level gender pay inequity in Australia (WEGA, 2017)
Psychological and personal traits: Gender pay inequity can also be contributed by
psychological traits where men give higher value to money along with superior self esteem.
They believe that they can control their own destiny, be more competitive and more
disagreeable as compared to women. These traits contribute towards pay inequities. For
example, in work environments where increased competitiveness lies, women may not like to
opt for such positions as they are less attracted to such scenarios. These traits reduce their
wage structures in which they are already present. Along with it, women have been seen less
negotiable for themselves as compared to men (Tower, 2006).
Why should organisations care?
Attaining equal pay at senior levels will give more opportunities to females for representing
higher levels in the organisations. Recent evidences related to success in business shows that
gender diverse teams under women leadership make sense for their encroachment. According
to present survey, diverse teams are more effective, smarter and creative and perform better
financially (Zhou, 2016). Companies that have made women participate in execute levels
outperforms those who do not have any women in senior level. According to Fortune, total

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return to stakeholders was 34% higher than companies with low female representatives. Even
IMF stated that women in corporate boards proved to give more profits to the firm while
being in senior levels. Companies that share larger female in higher positions have given
more return on assets even when the industries were found in bottom line. Along with it,
many countries government are considering taking strict actions against gender pay inequity
in firms that makes necessary for firms making changes accordingly (Guilbert, 2018).
Factors supporting equality in gender pay
There are several factors that support the elimination of pay gap and giving superior roles to
women in executive areas by giving equal pay for full time working women at different
organisational level. Many factors promotes accountability and unconscious biasness while
making pay assessment through robust payment process thus empowering managers with
information about market.
Figure: Factors that supports equity in pay between men and women (Smith, 2017)

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Representing women in executive roles and providing them with equal pay show better
organisational ranks. Women comprises of 75% of employees at worldwide that ensures
well-built female pipeline. Study shows that women also prove to be great mentors and
supporters which is another factor that cannot be underestimated. Adding on to mentorship,
female sponsorship can be admitted to promote more women and develop the strong pipeline
of women. Company’s sponsor managers are the ones who frequently give decisions on
promotional and strategic issues and they are even allowed to act independently while taking
risks. Women who are appointed in leadership position also provide guide and sponsorships
to other women along with bringing affects to policies and cultural changes inside the
companies (PayScale, Inc., 2018).
Family friend policies like maternity leave have high influence in organisations while lagging
behind female representatives in top levels. Organisations’ having flexible work
arrangements at workplace shows more progressive actions and policies while engaging more
employees. Women who works flexibly proves stronger advocates in company’s than women
who have rigid time schedules. Flexibility can be necessary for many women but research
shows that selecting flexibility can result in wage penalties when it comes to low wage
sectors and occupations. As far as success is recognised by them, such companies do not
bother whether their employees work for part time or full time. Family friend policies vary in
different countries based on local requirements and laws (Frantz Ward LLP. , 2018). One
common approach in every country’s law is to support the culture of new parents under
which having babies shall not be treated as unfair policy by companies. Many companies
even support new parents by providing support mechanisms for child and elderly care.