In May, the Harvard Business Review looked at why Danish women's salaries dropped off after childbirth and never recovered.  In June, the University of Chicago presented a reason: productivity. 

Yana Gallen looked at Danish data and found that an eight percent productivity gap between mothers and others explained two-thirds of the pay gap. What it didn't explain was the slight drop in pay for childless women, who had higher productivity.

Gallen hypothesized that men were actually working more hours than reported, which would mean their productivity per hour wasn't that much greater (or greater at all) than women, but that their total work output was higher. The Wall Street Journal summed it up as follows:

When all hours are accounted for, it's possible mothers are equally as productive per hour. But from a business's perspective, a worker would likely be judged on output per paid hours. Essentially, a father might be more willing or able to stay late to finish an assignment, even if they receive no overtime compensation for the effort.

In the United States, that theory makes sense, as men who work full-time report working more hours than women who work full-time. If an employee is exempt from overtime payments, employers aren't required to track their hours. Additionally, given today's increase in work from home jobs and the 24/7 availability we have with our smartphones, it's difficult for any manager to know precisely how many hours any one person works--all we see is the output.

Of course, if an employee is overall more productive and is paid a salary, it makes sense that that person should be rewarded with more money, regardless of the number of hours worked.

However, the troubling part of these two studies is that childless women were productive at 101 percent of men, and yet still made significantly less than the men: 89 percent.

Gallen said, regarding this "The natural explanation is that employers think you're going to become a mother, so they pay you less in anticipation." This stereotyping needs to stop. Employers need to remember to look at each employee as an individual and not as part of a group. 

The average woman in Denmark has 1.7 children over her lifetime, but 13 percent of Danish women have no children by age 50, as of 2014. To pay women less because you anticipate she'll have a baby and be less productive is not only immoral but ridiculous when such a high percentage of women will never have a baby.

The United States also sees wage gaps between men and women, especially those with children. If women are less productive, that makes sense. If, though, employers assume that an individual woman is less productive because she's a woman, that's a violation of US law.

Measuring productivity in a knowledge economy can be a bit difficult. It's easy to measure the productivity of widget makers: You simply count the number of widgets made and divide by the time worked. 

But, for a knowledge worker, it's not quite that simple. Ideas per hour? Ideas that get implemented? Successful ideas? And someone who sits and stares at the window may actually be more productive at that moment than someone sitting at a computer and typing furiously. So, we really have to look at the end product.

Remember to pay each employee based on what that person contributes to the business--not based on what the average person contributes to the business. And document. Always document.

Published on: Jul 13, 2018