Employer practices

Using Behavioral Design to Close the Gender Pay Gap

Archana Pyati April 13, 2021

Equal pay laws have been on the books for nearly 60 years, beginning with the 1963 Equal Pay Act, which requires employers to pay men and women equally for equal work. Title VII of the Civil Rights Act, passed the following year, prohibits employment discrimination based on race, sex, and other characteristics. Since then, all states but Alabama have passed some form of pay equity legislation.  

Yet progress in closing pay gaps between women and men has stalled since the 1990s. Pay inequality between men and women persists, with women earning 82 cents for every dollar earned by men. The pay gaps between Black and Latinx women and white, non-Hispanic men are even greater: Black women earn 62 cents and Latinx women earn 54 cents for every dollar earned by white, non-Hispanic men.

Although laws and policies are necessary to ending discriminatory pay practices, a new study published by ideas42 and the TIME’S UP Foundation argues that laws and policies alone are insufficient. Human behavior and everyday choices perpetuate pay discrimination and inequity when employers adhere to workplace norms that privilege one type of employee over another. Yet strategies aimed at correcting individual behavior, such as diversity or unconscious bias training, have proven largely ineffective.

The study advocates for a new approach that shifts focus away from individual behavior toward the contexts that constrain such behavior. Behavioral design is an approach where features of the decisionmaking environment can be experimented with and improved to produce a desired outcome, such as greater pay equity. The study notes that behavioral design tools could help organizations redesign workplace norms and standards to facilitate more equitable, less discriminatory decisionmaking to close pay gaps between men and women.

Shifting from ideal worker norms to ideal workplace standards

The study’s authors attribute the gender pay gap to the perpetuation of “ideal worker norms,” or unwritten rules and expectations for how workers should behave if they want to succeed at work and in the labor market. Ideal worker norms have their roots in the 17th-century Protestant work ethic, and they have a modern-day manifestation in technology companies, where a win-at-all-costs culture dominates.

According to this construct, an ideal worker is available for work around the clock, is unlikely to have major caregiving responsibilities, has conventional leadership attributes such as assertiveness and likeability, and does not try to change workplace culture. Historically, men have been more likely than women to fit the ideal-worker mold and have been rewarded through hiring, salary negotiations, promotions, and other pay-related practices.

The study proposes behavioral design interventions to disrupt ideal worker norms and create in their place ideal workplace standards where employees who don’t fit the ideal worker mold can thrive. These standards would:

  • design systems and processes around employees as caregivers by default, rather than considering caregiving responsibilities as an anomaly or afterthought
  • incentivize work-life balance by holding accountable managers who expect employees to work around the clock
  • align manager success with employee success
  • promote and advance employees who exhibit broader-range leadership attributes, such as listening, collaboration, and consensus building
  • cultivate a workplace culture that embraces change and welcomes new ideas from all employees

Behavioral design strategies to address pay inequity

The study identified three areas where behavioral design could introduce more inclusivity into employer practices and close gender pay gaps: recruitment and hiring, scheduling and work-hour expectations, and promotions and compensation. Setting up default processes and systems, reframing conventional notions of leadership and caregiving, and automatic reminders to trigger certain actions are behavioral design interventions that, the authors contend, could make a difference.

Recruitment and hiring

Poorly designed recruitment and hiring systems result in hiring managers falling back on personal biases and stereotypes when filling positions. Research shows hiring managers tend to hire applicants with similar backgrounds as themselves. Behavioral design strategies to disrupt unconscious bias and encourage nontraditional applicants to apply for jobs including the following:  

  • design hiring criteria to reflect actual on-the-job responsibilities and require managers to justify candidate assessment rankings to supervisors
  • frame caregiving as a potential asset when hiring
  • ban salary negotiation and make transparent formulas or processes for setting salaries
Scheduling and work-hour expectations

Scheduling expectations and systems are not typically designed with workers’ caregiving and family responsibilities in mind, limiting women’s advancement and exacerbating work-life conflict. Behavioral design strategies that can give workers greater clarity and control over their work schedules and generally support greater work-life balance include the following:

  • clearly communicate rules about how employees can request schedule changes and provide a set number of flexible shifts available to all employees by default
  • empower managers to foster work-life balance on their teams by setting up mechanisms for employees to give constant and immediate feedback to managers
  • set up default processes for employees who need to take paid or unpaid leave so employees feel supported in planning their leave and transitioning back to work
Promotions and compensation

Executives and managers are given wide discretion on who receives promotions and raises, leaving room for personal biases to influence decisionmaking. Promotion processes and timelines are often ambiguous, with employees not receiving clear signals about when they may be eligible for a promotion and managers lacking guidance about when to promote employees. Behavioral design strategies to bring greater objectivity and transparency to promotion and compensation processes include the following:

  • develop standardized criteria to inform decisionmaking around promotion and reframe notions of leadership to include a broader set of skills, experiences, and traits
  • create reminders to prompt employees to document their achievements in real time
  • eliminate ambiguity by automatically considering employers for promotion at preset milestones

The study emphasizes that although behavioral design offers employers a powerful way to test and experiment with strategies to change workplace norms that harm women’s advancement and contribute to pay inequity, these strategies should be part of a larger ecosystem of progress toward pay equity that also includes changes to federal and state policies.  

Learn more:

From Ideal Worker to Ideal Workplace: Using Behavioral Design to Create More Equitable Companies

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