If you want a clue as to whether you’re being paid enough, check the cubicle next to you. What you earn is not only tied to what you do but who you work with, a new study says.
Professors Cheri Ostroff from Columbia University and Leanne Atwater of Arizona State University examined the pay of more than 2,100 managers at 500 companies and found that regardless of responsibilites, salary was linked to the gender and age of those people in their immediate workplace.
The more women in the neighborhood, the more likely that the manager–man or woman–was paid less. For example, a manager whose subordinate group was 50 percent female could expect to be paid $2,000 less annually than a manager whose group was less than half female; when the group was 80 percent female, managers received $7,000 less in pay.
The same was true if the manager’s co-workers–peers, supervisors or subordinates–were significantly younger or older than 40. Managers who supervised employees who averaged age 30 received approximately $4,000 less than those who supervised 40-year-olds. The gap was again $4,000 for managers who supervised mostly 50-year-olds.
The researchers factored in the manager’s sex, age, race, organizational level, experience, education, performance and area of work before examining the effect of gender and age.
So why the gap? The reasons aren’t clear, say Ostroff and Atwater, but the perceived value of a manager’s direct reports likely plays a role. Younger employees are viewed as less valuable because they lack experience, while older workers who haven’t been promoted are looked at as deadwood.
Meanwhile, researchers say that women may tend to be channeled into departments with less prestige or strategic value to the company. “Women tend to work with and for other women,” wrote Ostroff and Atwater.
Their findings appear in the August issue of the American Psychological Association’s Journal of Applied Psychology.
Not a clue
New rules on eligibility for overtime, the first changes to federal overtime regulations in 50 years, will go into effect next year. Yet most employers are in the dark about what that will mean to their businesses, according to the Lincolnshire-based outsourcing firm Hewitt Associates.
A survey of 268 U.S. companies found that 72 percent say they don’t know how many of their employees might need to be reclassified as exempt for overtime if the proposed changes to the Fair Labor Standards Act (FLSA) go into effect.
The reason? A majority of companies, or 63 percent, say interpreting FLSA rules is the biggest challenge.
Germans told to work longer
Retirement may have to wait for some Germans working today.
A pending pension crisis has prompted a special government commission to recommend that Germany’s retirement age be raised to 67, the BBC reports. Currently, the average German retires before the age of 63.
Reforms are needed if the German version of the Social Security system is to avoid collapse, say government officals. They cite a lower birth rate, longer life expectancy and sluggish economic growth as reasons for the crisis. Pensions will consume almost a third of the German budget for 2003.
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If adopted, the new retirement age would be phased in slowly over time. The commission suggests increasing the age between 2011 and 2035, at a rate of one month per year.
Japan’s changing workforce
Lifetime employment in Japan is becoming as quaint a tradition as kabuki and tea ceremonies. According to government figures released recently, part-time or temporary employees now make up roughly a quarter of the Japan’s workforce.
The number of non-regular employees–part-time, temporary or contract workers–in Japan reached a record 14.5 million in 2002, the Ministry of Health, Labor and Welfare reported. The number of non-regular employees was nearly twice the figure for 1987, when there were 7.4 million.
A more than decade-long economic slump has forced companies to re-examine the once widespread but expensive policy of lifetime employment.