Published on: July 8, 2025 at 8:39 pm
Although more women are being appointed to executive leadership positions, a gender pay gap persists. According to Pew Research Center, the gap has narrowed slightly, but in 2024, it was at 15%. Research shows that when companies pay women less, company performance suffers.
Academy of Management Scholar Carol Kulik of the University of South Australia said she recommends that companies recognize the negative implications of pay gaps.
“If you have a gender pay gap within your top management team, you’re basically telling that team that some people’s opinions don’t matter as much,” Kulik said.
Gender pay gaps directly impact the effectiveness of the management team and their decision-making and undermines peers’ and employees’ trust in them. But why do we get pay gaps at all?
Kulik emphasizes that “it’s very difficult for organizations to monitor everything at once.”
“Gender equity is like an octopus,” she said. “There are many complex arms to monitor.”
Companies might be focusing on visible markers of diversity, such as the number of women and people of color they have hired, rather than monitoring equity through pay audits. But even if a company is carefully monitoring pay equity, gaps can appear in other parts of the compensation package, such as benefits and perks.
“We see bigger gender pay gaps in total remuneration than in base salary because we get bigger gaps when managers have more discretion,” Kulik said. “Managers have more discretion over things like bonuses, overtime, or long-term incentives.”
To address pay inequities, Kulik suggested that managers need to become more transparent about the criteria they use to decide who qualifies for bonuses, perks, and other benefits.
