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06 June 2018

How the ‘mindset’ of an organisation is key to addressing the gender pay gap

Aneeta Rattan, Assistant Professor of Organizational Behavior, London Business School

It's important for organisations to communicate that ability grows and develops over time

The ‘mindset’ of an organisation is key to addressing the gender pay gap
The ‘mindset’ of an organisation is key to addressing the gender pay gap

There was unsurprising consensus in the results of the recent UK gender pay gap reporting – most organisations reported pay and bonus gaps that favour men over women, on average, and most organisations reported more men than women at senior levels.

If the problem were only discrimination in wages between men and women doing the same job, then the solution would simply be to equalise wages. However, the reality is that the gender pay gap is multiply determined. In the course of reviewing hundreds of companies’ gender pay gap reports, women’s underrepresentation in certain industries (e.g., finance, engineering) and the scarcity of women in senior leadership positions across industries were explanations that companies offered for their gender pay gaps again and again.

Research supports this explanation. Low representation contributes to the stereotype that women are not competent, that that they lack leadership ability. These negative stereotypes contribute to the low and leaky pipeline of women, which of course means fewer women pursuing leadership – an insidious cycle.

On the one hand, it could be considered a sign of progress that so many organisations now acknowledge negative stereotypes and women’s underrepresentation as serious problems. On the other hand, if all that happens is an acknowledgement of systemic, societal issues, we are unlikely to see reductions in pay, bonus, and representation gaps in coming years. To make this step toward awareness meaningful, it must be followed by action.

But what action? Organisations might wonder if there is anything they can do in the face of stereotypes that have prevailed for so long.

Organisations are in an exceptional position to combat negative stereotypes about women’s competence and leadership ability. The best way to do this would be for organisational leaders to showcase their belief that gender does not define anyone’s ability or potential by diversifying at the top. As they work to achieve greater representation at senior levels, organisations can also address what they communicate about ability, or the ‘mindsets’ prevalent in the workplace. These mindsets can affect whether women feel a sense of belonging in the company, even while their gender is underrepresented. This matters because when people, regardless of gender, feel that they belong, they are more likely to want to stay there and to advance up the ranks.

Does an organisational context communicate that ability grows and develops over time, or does it communicate that ability is fixed and stable? If the message is that intelligence develops over time, this is known as a ‘growth mindset’. If the message is that intelligence is fixed and relatively stable, this is known as a ‘fixed mindset’. These mindsets can be communicated through the things people in the company say, their interactions, and reactions to successes and failures. A growth mindset seems to help fortify women against the threat of competence stereotypes. Catherine Good, Carol Dweck, and I found that when undergraduate women perceive their math faculty and classmates to hold a growth mindset, they maintain their sense of belonging more and thus their intent to pursue math majors. Recent research by Mary Murphy and Katherine Emerson found that organisations that communicate a growth mindset are more trusted by women because women expect to be stereotyped less there. These expectations predicted women’s greater anticipated level of engagement with a representative from the company.

Alternatively, do leaders communicate that intellectual or leadership potential is widespread or concentrated among only a select few? The idea of high potential as widespread is known as the ‘universal mindset’ and the idea of high potential as constrained only to a select few is known as a ‘nonuniversal mindset’. In recent research, Krishna Savani and I found that industry gatekeepers who were perceived to have the universal mindset raised women’s sense of belonging in science, technology, engineering, and math (STEM) fields, closing gender and racial gaps in belonging to STEM. For example, when racial minority and women undergraduates perceived their STEM professors to hold a more universal mindset, they reported more belonging and thus performed better in the course they were taking. In other studies, we found that when a professor expressed the universal mindset, women assumed that the professor would be less likely to agree with negative gender stereotypes.

Communicating the mindsets alone will not be enough – organisations will have to act on them, reshaping culture, recruitment, retention, and promotion practices in order to embody the mindsets. This will also mean exploring their internal data to address instances of bias that emerge from these competence stereotypes, such as evaluating whether managers are reliably underpromoting highly performing women, and rooting out sexist language and behaviour anywhere it exists. Communicating these mindsets also does not mean that organisations have to be less competitive, or that everyone will make it to the top. Instead, these mindsets may take one step toward levelling the field of competition so that negative stereotypes about women’s competence are no longer a contributing factor to gaps between women and men.