Performance-Support Bias and the Gender Pay Gap among Stockbrokers
Penn collection
Degree type
Discipline
Subject
Commission
Compensation
Consumer Discrimination
Earnings
Economics
Employees
Financial Services
Gender
Gender Inequality
Gender Pay Gap
Human Relations
Income
Inequality
Labor
Labor Relations
Men
Merit Based Pay
Organizational Dynamics
Organizational Policies
Organizations
Pay
Performance
Performance Based Pay
Performance Evaluations
Performance Rewards
Promotions
Salary Increases
Sex
Stockbrokers
Women
Demography, Population, and Ecology
Gender and Sexuality
Inequality and Stratification
Social and Behavioral Sciences
Sociology
Work, Economy and Organizations
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Abstract
Organizational mechanisms, and their contexts, leading to gender inequality among stockbrokers in two large brokerages are analyzed. Inequality is the result of gender differences in sales, as both firms use performance-based pay, paying entirely by commissions. This paper develops and tests whether performance-support bias, whereby women receive inferior sales support and sales assignments, causes the commissions gap. Newly available data on the brokerages’ internal transfers of accounts among brokers allows measurement of performance-support bias. Gender differences in the quality and quantity of transferred accounts provide a way to measure gender differences in the assignment of sales opportunities and support. Sales generated from internally transferred accounts, controlling for the accounts’ sales histories, provide a “natural experiment” testing for gender differences in sales capacities. The evidence for performance-support bias is: (1) women are assigned inferior accounts; and (2) women produce sales equivalent to men when given accounts with equivalent prior sales histories.