Glass Ceiling Effect on Compensation
The Glass Ceiling Effect
HRMD 640 Job Analysis, Assessment, and Compensation
July 28, 2013
Barney Smith
Glass Ceiling Effect on Compensation
Introduction
Since childhood many of us have been told anyone of us can become whatever we desire
as long as we apply ourselves and work hard to get there, but how true is that statement? Many
individuals in the corporate world would be eager to make it to the top levels of an organization,
considering that’s where the highest paying salaries exist. Women and minorities that have the
aspiration to become leaders of an organization may be stifled in their advancement to the top by
encountering a form of discrimination called the glass ceiling effect, which can also be referred
to as pay discrimination. I chose this topic to explore because I hope to eventually advance my
own career to top levels of HR; being a African American man, I wanted to understand how the
glass ceiling can affect my own career progression and hopefully recognize how I can help
organizations pave the way for minorities to lead. I will also note the current event that has been
dominating the media airways; the George Zimmerman trial has inspired me to cover this topic.
More often than not, discrimination is not always something we can put our finger on, however
when it’s there it can certainly be felt. The events surrounding the case after the incident are a
personification of the discriminatory codification that exists in the law and in the workplace. To
appreciate how to disassemble the glass ceiling for women and minorities, first a basic
understanding of what it is and how it could have been created will be reviewed. Next will be
the analysis of legal implications of the glass ceiling and particular court cases pertaining to the
matter. Finally, an overview of ways to manage and address the issue in the workplace will be
discussed.
Background
The glass ceiling effect is an unseen artificial barrier that inhibits women and minorities
from advancement in an organization regardless of their qualifications. The glass ceiling usually
Glass Ceiling Effect on Compensation
is referencing the inequality at higher levels of top management throughout the course of a
protected class’s career (Cotter, Hermsen, Ovadia, & Vanneman, 2001). Most of the research
pertaining to the causes of the glass ceiling relates to the inequality of mobility for women in
high salary positions versus minorities; this may culminate from the increase availability of
research and statistical data of women’s undue hardship over recorded instances of minorities
(Buzzanell, 2009).
Researchers have tried to analyze the various job characteristics that lead to the creation
of the barrier. A few analysts have concluded, the ability to categorize and control every job
characteristic would be impossible since there are too many job characteristics that can affect the
glass ceiling and lead to discrimination (Cotter, Hermsen, Ovadia, & Vanneman, 2001).
Discrimination, whether intentional or unintentional, is used in a unique context in regards to the
glass ceiling. Discrimination helps to perpetuate the affect of the unforeseeable barrier for
women and minorities in regards to promotions and raises; but just because women and
minorities are being discriminated against does not mean that the discrimination creates a glass
ceiling. If women and minorities are being discriminated against in all levels from the bottom
tiers of management to the top earning positions in the organization, then the promotional
process is discriminating, not creating a glass ceiling effect. The glass ceiling effect is only
apparent if the highest paying positions in a corporation are discriminating and the lower levels
do not have promotional barrier for women and minorities (Cotter, Hermsen, Ovadia, &
Vanneman, 2001).
Numerous factors can contribute to fulfilling the glass barrier; these factors will vary
between every organization and can be a combination of situational events. Although
researchers cannot define the characteristics of the creation of the glass ceiling effect, they have
Glass Ceiling Effect on Compensation
identified patterns that continue to stabilize the barrier. For instance the labor force can support
the barrier keeping women and minorities from top influential seats in an organization (Cotter,
Hermsen, Ovadia, & Vanneman, 2001).
The labor market has been predominately controlled by white individuals, seventy-four
percent, and men, fifty-four percent (Herman III, Judge, & Kammeyer-Mueller, 2012). With
white men still consistently governing the labor pools and high positions, this has enabled the
drastic separation of white men and women and/or minorities in the promotional climb. Even
though organizations have become aware of the glass ceiling effect; the past culture, practices,
and beliefs, which many times have been created decades ago by white men for white men, still
dominate the organizations’ structures in power and social aspects, also the use and practices of
the white male dominating the internal labor market continually perpetuates the white man’s
culture (Goodman, Fields, & Blum, 2003). Though the glass ceiling is a barrier to overcome, it
is socially constructed by people through the norms of their culture within the organization,
meaning it can be shattered by individuals changing and inevitably shifting the organizational
culture and structure (Buzzanell, 2009).
Another possibility to the creation and support of the glass ceiling effect may come from
the promotional process within an organization. Often promotion decisions, especially for the
highest paying leaders of the company, are subjective to the hiring manager. Many times once a
high potential has the adequate knowledge, skills, and abilities [KSA], the rest of the decision is
based off of the non-job characteristics of that candidate, such as will this person fit in with the
top management team (Powell & Butterfield, 1994).
Another limitation to employment advances could be contributed to the high potential
candidate dissimilarities to the job or the person making the selection, which many times these
Glass Ceiling Effect on Compensation
critical staffing needs are left to those in top management (Powell & Butterfield, 1994). Most of
top management consists of white men who have been dominating the top positions over women
[and minorities] by ninety-seven percent in 1995 (Buzzanell, 2009). Powell and Butterfield
found research that suggested the decision of promotions may be based off the similarities the
candidate has to the selector; the selector may be unknowingly [or knowingly] centering their
decisions off the irrelevant job factors, such as gender or race, because of fear of selecting an
improper candidate. This bias relates to the intentional rational bias theory insinuating the
staffing agent is basing the promotional decision on the outcome that will best benefit themself
(Powell & Butterfield, 1994).
A variety of barriers to mobility or to move up the corporate ladder exist, but a huge
obstruction could be the lack of development programs provided to women or minorities.
Research done by the Federal Glass Ceiling Commission, illustrates the lack of resources
provided, such as mentor programs with powerful women and minority models, leadership
training, challenging assignments, and other critical development aspects (Herman III, Judge, &
Kammeyer-Mueller, 2012). The more availability women and minorities have to these
development opportunities the more likely they will be able to advance upward in the
organization; however because white men have more ample opportunities to take advantage of
the developmental resources of a company, [white] men still will advance more rapidly
(Goodman, Fields, & Blum, 2003).
Legal
The glass ceiling effect violates the Civil Rights Act. Title VII of the Civil Rights Act
explicitly defines an unlawful employment practice of an employer is “to limit, segregate, or
classify his employees or applicants for employment in any way which would deprive or tend to
Glass Ceiling Effect on Compensation
deprive any individual of employment future opportunities and training programs opportunities
or otherwise adversely affect his status as an employee, because of such individual’s race, color,
religion, sex, or national origin” (U.S. Equal Opportunity Employment Commission). The
discrimination against women and minorities to corporate climbing on a promotional basis
infringes on the candidates right to equal consideration. Even if the organization is not
intentionally discriminating, their practices for reviewing and promoting within could have an
disparate impact, if the selection method doesn’t include a pool of at least eighty percent of a
protected class that is proportional to the majority then it is adversely impacting a protected class
(U.S. Equal Opportunity Employment Commission). Congress has appropriated federal
oversight to monitor and identify discrimination, including the glass ceiling effect and has
authority to reprimand and file lawsuits against those organizations that violate the Civil Rights
Act of 1964.
First the Equal Employment Opportunity Commission [EEOC] monitors and disciplines
any violators of the Civil Rights Act. The process would begin with a complaint made by the
plaintiff, usually the victim against the organization. Once the complaint has been filed with the
EEOC, the burden of proof, that discrimination was not a factor for their decision, lies with the
organization/employer. If the EEOC finds the company guilty of infringing on an employee’s
civil rights, the EEOC will have the right to award the victims’ damages to rectify the injustice
and may institute organizational mandates to help further prevent them from occurring again
(U.S. Equal Opportunity Employment Commission).
Another federal agency was established in 1991, by President George H. W. Bush, to
identify and recommend practices that will help to dismantle the corporate hierarchies that limit
women and minorities from advancement, known as the Federal Glass Ceiling Commission
Glass Ceiling Effect on Compensation
[FGCC] (U.S. Department of Labor, 1995). The issued report that the FGCC produced supports
the notion of how the glass ceiling effect is still dominating corporate America; the labor
population is at fifty-seven percent of women and minorities and yet top management positions
in fortune 500 companies are still ninety-seven percent white men (U.S. Department of Labor,
1995).
There is an array of Civil Rights cases that have violated women’s and minorities rights
for advancement, which the EEOC has investigated and mandated penalties and/or new
procedural reforms. One case directed Outback Steakhouse to pay nineteen million dollars for
sex discrimination of women. After an investigation, the EEOC found Outback discriminating
against women for the advancement into higher management positions that would include profit
sharing of the corporately owned restaurants. The women were also denied favorable job
assignments that would assist in the development of the KSA’s for the potential to reach the
higher management levels of proprietor. The EEOC declared Outback to implement an
improvement plan over the next four years along with a monetary settlement to pay to all female
employees that were employed for at least three years between 2002 and 2009. The four
procedural practices required to be fulfilled at Outback were: “an online application system
allowing anyone to apply for managerial or supervisory positions; create a human resource
executive position to be called the Vice President of People; consult an outside consultant for a
two year time period to ensure obedience within equal opportunities for promotions by analyzing
the data of the online application system; and report back to the EEOC every six months to
confirm the compliance of the above stipulations (U.S. Equal Employment Opportunity
Commission, 2009).
Glass Ceiling Effect on Compensation
Another suit against a major brand was the class action suit against Costco. Seven
hundred female employees of Costco filed a class action lawsuit for discrimination to obtain
store management level based on their gender. Only thirteen percent of the managers at Costco
are women and forty-five percent of the ninety thousand employees are female. The managerial
positions are communicated by word of mouth; this informal method of selection neither
provides nor accepts applications to the top management positions at the store level. Most of the
managers are hand selected based on the judgment of the senior executives which happen to be
male dominated. This type of culture has fostered the support of the glass ceiling effect towards
women. The judge sided with the plaintiffs awarding a sum of forty million dollars to all current
and former female employees who have been denied the position as store manager or assistant
store manager between the dates of January 2002 – January 2007 (Greenhouse & Barbaro, 2007).
Conclusions/HR Implications
The glass ceiling effect is a form of discrimination that can be legally prosecuted by the
EEOC; which can have devastating consequences for an organization’s reputation, while costing
a significant amount of money and resources. The barrier for women and minorities many times
are unnoticeable until someone acknowledges a precedent of unfair practices that hinder the
protected classes to prosper into the top managerial rings. HR managers and other top leaders of
the organization should utilize their HRIS analytics to monitor the demographics and
promotional rates for women and minorities in their organizations. If they find their processes
for reviewing internal candidates adversely impacting a protected class; they should investigate
the variables that may contribute to this bias and remedy their procedures to eliminate this
barrier.
Glass Ceiling Effect on Compensation
Organizations can take a proactive approach to ensure their not violating any reprimandable laws. The dominance of the white male is still so prevalent in the high rankings of the
corporate world; it may seem challenging to break the barrier for women and minorities.
Promoting minorities and women into the top corporate levels won’t be a quick overnight
change. The decades of layered barriers hinders changing the perspectives of an engrained
culture. Utilizing the small wins strategy, may take time to reach the ultimate goal of equality
for all protected classes, but implementing incremental smaller changes can alter the culture
norms while lessening the resistance to change (Meyerson & Fletcher, 1999). This strategy will
also increase the buy-in at all levels. The newly renovated processes and procedures could create
a more efficient and productive culture and the effort from these small wins can show how they
affect the organization in a big way. The small changes over time will eventually create new
cultural norms (Meyerson & Fletcher, 1999).
Organizations can also apply other practices that can help to alleviate the barriers to top
management positions. Organizations may create formal mentoring programs geared towards the
advancement of women and minorities and also provide networking opportunities that may not
be as readily available. Organizations should offer training to mentors and high potentials of
how to manage cross-sex relationships to help bridge the gap between genders (Buzzanell,
2009).
Organizations should review their internal process for filling positions. If their selection
process is subjective, HR should revise the policies make the selector more accountable for their
decisions. By creating a uniformed process to why and how the organization made its selection,
the organization will have less liability of violating the Civil Rights Act of 1964 (Powell &
Butterfield, 1994).
Glass Ceiling Effect on Compensation
The overall best way to break the glass ceiling for women and minorities is to understand
which processes and customs inhibit these protected classes and gain commitment/buy in to
make the change effective. Examination of the needed change, to gain support by educating
every one of the new changes, and measure the outcome of these experimental changes, can lead
to the enhance commitment to making the change stick. These initiatives can potentially
increase productivity, and may even reduce women and minority turnover (Herman III, Judge, &
Kammeyer-Mueller, 2012).
The glass ceiling is an obvious obstacle for competent women and minorities achieving
consistent compensation levels commensurate with their white male counterparts, it may take
years or even decades to adjust the corporate cultures to create equality on all levels; but with the
support and commitment of HR and the organizations, the barriers to the top can be destroyed.
Glass Ceiling Effect on Compensation
References
Buzzanell, P. (2009, June). Reframing the Glass Ceiling as a Socially Construed Process:
Implications for Understanding and Change. Communication Monographs, 62(4),
327-354.
Cotter, D. A., Hermsen, J. M., Ovadia, S., & Vanneman, R. (2001, December). The Glass Ceiling
Effect. Oxford Journals, 80(2), 655-681.
Goodman, J. S., Fields, D. L., & Blum, T. C. (2003, December). Cracks in the Glass Ceiling.
Group & Organization Management, 28(4), 475-501.
Greenhouse, S., & Barbaro, M. (2007, January 12). Costco Bias Suit is Given Class-Action
Status. Retrieved May 02, 2012, from The New York Time:
http://www.nytimes.com/2007/01/12/business/12bias.html
Herman III, H. G., Judge, T. A., & Kammeyer-Mueller, J. D. (2012). Staffing Organizations.
Middleton Wi: Mendota House Inc. & The McGraw-Hil Companies Inc.
Meyerson, D., & Fletcher, J. K. (1999). A Modest Manifesto for Shattering the Glass Ceiling.
Harvard Business Review, 127-136.
Powell, G. N., & Butterfield, D. A. (1994, February). Investigating the "Glass Ceiling"
Phenomenon: An Empirical Study of Actual Promotions to Top Management. The
Academy of Management Journal, 37(1), 68-86.
U.S. Department of Labor. (1995, November). A Solid Investment: Making Full Use of the
Nation's Human Capital Recommendations of the Federal Galss Ceiling Commission.
Retrieved May 02, 2012, from U.S. Department of Labor:
https://www.dol.gov/oasam/programs/history/reich/reports/ceiling2.htm
U.S. Equal Employment Opportunity Commission. (2009, December 29). Press Release.
Retrieved May 02, 2012, from Outback Steakhouse To Pay $19 Million for Sex Bias
Against Women in "Glass Ceiling" Suit By EEOC:
http://www.eeoc.gove/eeoc/newsroom/relase/12-29-09a.cfm
U.S. Equal Opportunity Employment Commission. (n.d.). Title VII of the Civil Rights Act of
1964. Retrieved May 02, 2012, from Laws, Regulations, Guidance, & MOU's:
http://www.eeoc.gov/laws/statutes/titlevii.cfm