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What Does the Glass Ceiling Cost You

November 1, 1992
Related Topics: Discrimination and EEOC Compliance, Diversity, Workforce Planning, Featured Article
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The genie is out of the bottle. In spite of the much-publicized pressures by political, religious and cultural forces to push working women back into the home, women have become a significant factor in the economy. Only a few die-hards would argue the fact that they're in the workplace to stay.

In spite of the increased presence of women in the work force, they often still find that gender bias blocks their advancement. Several things have happened during the last 13 months that may make women less patient with gender bias, however. First, the treatment of Anita Hill by the all-male Senate Judiciary Committee during the Clarence Thomas confirmation hearings in October 1991 angered many women, even including many of those who didn't believe her story. This year the Tailhook scandal broke, and has remained in the news throughout the year.

More women than usual ran for public office during 1992. Many of the candidates indicated that anger resulting from the Thomas hearings and Congress' lack of responsiveness to family issues had driven them to run. A record 11 women made it through the primaries to run on their parties' tickets for the U.S. Senate. Sometime during the year, women-owned businesses for the first time surpassed the Fortune 500 companies in the numbers of people employed, according to a study by Cogenetics, Inc., of Cambridge, Massachusetts and the National Foundation for Women Business Owners.

It was also during this, the Year of the Woman, that Flemington, New Jersey-based American Humanagement Association (aha!), a consulting and training firm that helps organizations with strategic gender issues, announced the results of the first audit to determine the costs to an organization of systemic gender bias. The study revealed that these hidden costs, without including sexual harassment, amounted to approximately $15.3 million for the organization, a Fortune 500 utility company that had 27,000 employees. According to Kate Butler, founding director of aha!, the members of top management for the firm, which she calls Utilico, didn't think they had gender bias until they saw the results of the audit. They since have taken steps to eliminate the glass ceiling in their organization.

In another, similar-sized company, sexual harassment costs reached an estimated $6.7 million, according to The 1988 Working Women Sexual Harassment Survey. This indicates that gender bias and sexual harassment combined would most likely result in documentable after-tax losses to a company of this size of $22 million annually, or as much as 1% of total operating expenses.

The DOL's A Report on the Glass Ceiling Initiative points out that the most available research indicates that artificial barriers significantly inhibit the advancement of qualified women and minorities in U.S. corporations. With the existence of the glass ceiling a given, let's take a look at where gender bias typically exists in companies and what it costs them.

Executives hire by the white male model.
A major problem in recruitment seems to be the image recruiters and managers have in mind of the ideal candidate. Stephanie Allen, president of The Athena Group in Denver, says, "It's unintentional, but executives hire and promote by the white male model. They tend to pick guys like themselves. If you aren't a guy, it's kind of hard," she says.

Butler has found the same problem. When she asked recruiters to describe the applicant in the best interview they had ever conducted, several white male subjects described themselves, right down to the number and style of rings worn, color of their neckties and so on. "None of the white men who did this were even aware that they had described themselves, and none of the women I interviewed described physical characteristics similar to their own. In fact, few women gave physical characteristics at all," she says.

Companies often are aware of these biases in recruitment and try to correct them. Allen points out that search firms sometimes are asked specifically to find women, although a DOL study indicates that too few companies do this.

Utilico had attempted to address this issue by having a recruiting staff that represented the cultural diversity that was desired by the firm. Butler interviewed the culturally diverse individuals on the recruiting staff. They denied having any biases for or against any particular group. She followed up by asking, "Not even toward your own cultural group?" and was chastised by the recruiters. "It was as though I had accused them of favoring Hispanics or single mothers or 'white guys who walk funny,' as one recruiter described himself to me."

Butler's study of recruiters ultimately showed that, fearing to appear in favor of their own kind, recruiters who were minorities actually bent over backwards to avoid such charges. Instead, they ended up favoring the white male. "Organizations put together recruiting teams of culturally diverse people to increase the diversity in the work force, but systemic bias prevents that from happening," she says.

In general, women don't measure up to this unconscious white male model. "When we interview clients to determine what the selection process is like, we find that cooperative attitude and teamwork aren't given the same credit as being competitive and aggressive," Allen says. These valuable qualities earn praise, but they aren't valued as much as characteristics more often associated with men.

Even eliminating such biases from the minds of Utilico's recruiters wouldn't be enough to solve the problem. The applicants' potential was judged solely on his or her most recent five-year work history. This process effectively shut out women who were coming back into the work force after an absence, a group that's now—and likely to remain for the rest of the century—the fastest-growing demographic group of potential workers.

While conducting the audit of gender bias at Utilico, Butler also received reports that recruiters were steering women away from technical jobs and into customer service, which was at odds with Utilico's objectives to increase the number of women in technical positions. This was borne out when Butler posed as an applicant for a job as a technician. She also found that candidates seeking admission to a training program for a physically demanding technical job were given a test for physical abilities, which contained "a significant discriminatory element, presenting the greatest exposure to lawsuits uncovered by this audit," Butler says. This instrument judged women on the same dimension as for men, although gender differences for this dimension are known to be significant. Gender differences in actual performance of such jobs usually are insignificant, however.

Gender bias has an especially profound effect on applicants for positions in top management, according to Carolyn Kenner-Varner, human resources consultant for Philadelphia-based Rohm and Haas Co. Her observations are consistent with the findings of a study by Catalyst, an organization that works with corporations to foster the career and leadership development of women. The Catalyst study showed that, in senior management, women held 5% or fewer positions in the majority of these companies. The DOL places the number even lower, estimating that women represent only 1% to 2% of senior executive level officials. This phenomenon doesn't appear to be changing rapidly, however. In fact, a study done by Korn Ferry and the University of California at Los Angeles showed that representation of women in senior management only increased by two percentage points between 1979 and 1989.

"When you're talking about a six-figure salary—a position in which key decisions are made—skills and competency aren't the issue," Kenner-Varner says. Women usually have the skills, experience and competency by the time they apply for such positions. "Then the issue of relationship comes into play. Executives choose a candidate with whom they feel comfortable and can associate outside of work," Kenner-Varner says. She doesn't blame the decision makers, because people at that level must make subjective decisions that can make or break the organization. "You choose a person you feel comfortable with—a person you can do business with. That makes gender bias difficult to address," she points out.

The DOL report states that many companies fill mid- and upper-level positions through word-of-mouth referrals. "In some of these instances, corporate executives had learned of individuals, interviewed them casually (luncheons/ dinners), and made them an offer, outside the formal recruitment process," the report states. The female interviewee also may have a comfort problem when interviews are held in hotel rooms, according to a study by the Wellesley College Center for Research on Women.

These practices reduce opportunities for hiring women. Employee-referral programs, job-posting programs and use of executive search firms were also cited by the DOL report as possible sources of unintentional discrimination.

Intentional discrimination in hiring does still exist, much of it because male managers assume women will have a lower career commitment than men because it's assumed that they'll have children and quit, according to Mary Mattis, vice president of Catalyst. She points out that many male managers don't want to risk promoting a woman or giving her an important assignment for this reason.

The costs associated with these discriminatory practices are incalculable with present data. "They include lost opportunities associated with failing to consider qualified candidates, based on a less-than-salient set of criteria," Butler says. These practices must change, however. Women, minorities and immigrants will make up a large proportion of job applicants during the 1990s. The demand for engineers is expected to increase by 44% by the end of the century, but not the number of engineering students. The proportion of women engineering students has grown, however. Jobs for technicians are projected to grow by 38%, and so will the percentage of women applicants.

Allen points out that 52% of college graduates and 31% of MBAs are women, and that a majority of the top 10% are women. "If you aren't hiring women, you're overlooking some of the best candidates," she says.

Women offer different perspectives.
Hiring women may not be as bad as the die-hard chauvinist in the traditional organization thinks. "Research shows very little difference in traits between women and men—I.Q., ability to stick to a job, intuition, verbal ability, and so on," Allen explains. Even work considered to be too physically demanding for physically fit women has been found to be no more so than for men. One St. Louis packaging company lifted its prohibition against hiring women for a position that required them to move packages heavier more than 20 pounds. Even after 18 months, the company still had recorded no back injuries in the two new women employees, although this had been a common problem for workers in this position.

Bringing women into the work force can have other advantages. "Women tend to have a different perspective of the world," Allen explains. When a woman comes into a room, she's more likely to look at the interaction between people, whether the atmosphere is harmonious and people are taken care of, she points out. Men tend to be more interested in the task and their place within the hierarchy. Individuals may fall anywhere on the bell curve, of course, so that some women are more task-oriented, and some men are more concerned with how people work together. "Where the bell curve meshes, you'll find the bridging people, who can deal with both men and women. They play a critical role," Allen says.

"A woman is more apt to see several points of view; men are more likely to see things as either black or white and miss the shades of gray," says Kathy Doyle Thomas, vice president of marketing for Half Price Books in Dallas. This can be a real advantage but is often treated as a disadvantage, perhaps because men often seem to feel they must have the answers.

Whether the differences are genetic or learned is still being debated, but the cause probably is irrelevant to HR. Women generally have had different experiences than men have. "We're faced with having to make occupational concessions that men rarely have to make," Mattis says. She points out, for example, that, although men have difficult choices of their own, it's rare for them to have to choose between having a family and having a career.

These differences can be an advantage for companies trying to make management style more collaborative. During the 1980s, as the U.S. shifted from an industrial to an informational and global society, women became leaders of small and midsize organizations. "With no background in sports or the military...and few mentors to teach the masculine ways, women were thrown back on their instincts," write Patricia Auberdene and John Naisbitt in Megatrends for Women. This left the most creative women free to experiment. The traditional pyramid hierarchy was replaced by networks, lattices and webs. In fact, the early descriptions of the manager of the future, à la Peter Drucker, Tom Peters and others, match the leadership style more often used by women.

"Women tend to be more intuitive and visionary—at least they don't seem to have to work as hard at it as men do," says Kenner-Varner. Companies often overlook this advantage. "Women often produce a good working product with less effort than men have to make," she adds.

This doesn't mean that companies should have only women in the top executive positions, however. Evidence indicates that men and women complement each other in the work force and in management. During a conference of the National Training Labs Institute held in Snowmass, Colorado, in 1983, for example, an experiment showed that men and women working together did a better job inventing an egg-catching device than either an all-female group or an all-male group. (The all-male group came in last.) Clearly, an organization that hires a man instead of an equally qualified woman executive because the CEO feels more comfortable working with a man, is limiting its opportunities for increased insight and productivity.

Women are given less feedback.
Before you begin congratulating yourself on having had the foresight long ago to hire women and minorities—are you sure that your corporate culture allows them to live up to their potential? If not, you may be throwing money out the window. Management at Utilico claimed to have a woman-friendly workplace; its management staff was 35% women. It was unaware, however, that most of these women were at the lower levels. The turnover statistics for 1988 indicated that 74% of the managers and 70% of all employees who left the company during the year were women, citing most commonly a lack of advancement opportunities as the cause.

That it's costly to replace employees who leave the company is obvious. Less obvious to Utilico, according to Butler, were the increased costs associated with losing women employees. "Women represented 47% of the entire work force in 1988, yet received 57% of Utilico's tuition reimbursements," she says. Providing educational opportunities to women creates two factors that can lead a female employee to leave the organization after receiving it:

  • It sets up an expectation of future advancement
  • It makes her more employable.

Even if they stay, women don't receive the same benefit from their experience within the organization that men receive. Other forms of training, such as coaching and mentoring, performance appraisals and other feedback, often are either absent or negative.

"The greatest coaching discrepancy I've found is in both the kind and amount of feedback given to subordinates," says Butler. The greatest challenge is for male managers who must coach women subordinates on their appearance. "A new sales woman who arrives dressed in a halter top for a casual event may be talked about, rather than talked to. Without feedback, she remains inappropriately dressed and commits career suicide. A new salesman, also dressed inappropriately, is spoken to by his manager and slips out to change his clothes and save his reputation," she explains. Women have been deprived of feedback all their lives, according to Butler. "I've found that feedback given to men is two-and-a-half to three times lengthier than that given to women," she says.

Many men feel uncomfortable mentoring women. "When considering a male mentor, women should seek guidance from him first, to find out if he can deal with the role," says Allen. She points out that some of the best mentors are men who have had comfortable relationships with strong mothers or sisters, or men who have grown daughters and know firsthand of the problems associated with lack of feedback and challenge.

"Coaching and mentoring become more important when a woman moves into the higher positions in an organization," says Kenner-Varner. "The mentor should have a lot in common with the employee. The mentoring relationship should grow out of a natural attraction. That can create problems for a man mentoring a woman," says Kenner-Varner.

Mattis adds that research conducted by Catalyst indicates that some men are reluctant to mentor women, especially younger ones, for fear that rumors and innuendos may result. When a woman does manage to find a man who's willing to mentor her, she often finds resistance from co-workers or supervisors. "She may be told to stop 'seeing' him because people are talking," Mattis says.

If the mentoring relationship is with a more senior man in the company, she may be perceived as too aggressive. "Women are perceived as either too aggressive or not aggressive enough. It makes it difficult for them to get it just right," Mattis says. The problem can be alleviated by training that promotes an understanding of how men and women work together.

In a small focus group of women who were recipients of a successful mentoring relationship, Butler learned that what they appreciated most was being challenged. "Such critical feedback is denied women consistently by male supervisors because of a genuine fear that women will cry, but women crave the knowledge necessary to improve themselves. That takes critical, constructive feedback," she says.

Women who have been recipients of successful mentoring relationships report an increase of nearly 94% in their professional effectiveness as a direct result of mentoring, according to Butler. "Assuming that 10% of the women in management at Utilico already were benefitting from being mentored, the other 90% may be contributing only half of their possible value to the organization," she explains. If it's possible to provide mentoring to 25% of the women managers in the organization, and you allow for a reasonable increase in the productivity of their subordinates, the loss of this added value can be estimated at $9,562,320 annually.

The reluctance to provide constructive feedback reduces the value of performance appraisals, as well. "Many appraisals tend to lean toward an employee's attitude," says Doyle Thomas of Half Price Books. She says that this isn't a gender-bias problem as much as it is a lack of communication between a supervisor and an employee. "Is the employee expected to do her job and smile all the time? Is she allowed to have a really bad day? Companies should be very specific in writing job descriptions and include everything expected of her," she says.

Butler uncovered extensive gender bias in the performance-appraisal system at Utilico. "Women in our sample outscored their male counterparts on the eight skill sets listed under potential, but received merit pay and promotable ratings at a lower rate. Although their scores averaged 2% higher than those of their male counterparts, only 50% of the women in our sample were rated promotable, compared with 59% of the men," she says.

Of all skill sets used to evaluate potential for promotion, managers at Utilico unanimously chose leadership as the most valuable, and technical skills as the least valuable. An analysis of performance appraisals showed that the greatest predictor that a woman would earn a rating of promotable was a high score in technical skills. Butler says that the adverse impact study conducted by Utilico indicated that 25% of women were rated promotable, compared with 16% for their male counterparts, but only 29% of the women earned extra merit pay, compared with 31% of the men. "The costs to Utilico of this disparity can be measured in terms of turnover and reduced productivity from loss of loyalty and commitment from those women who are highly rated, yet aren't promoted," she says.

Women managers at Utilico filed 33% more applications before receiving transfers or promotions than men did for comparable positions, so the company was losing $45,329 annually in excess effort expended by women. "This doesn't include the disparate success ratios for non-bargained-for women who use the bidding process. If similar to management women's experience, they would increase the costs of disparity in this mobility system by more than $1,500,000," Butler explains. She calculated the cost to the company of the time spent by women discussing with their peers the perceived discriminatory practices at $1,107,138 in 1988. "We haven't accounted for productivity lost because of worry and thinking about disparate treatment in the organization, although we estimate this loss to be considerable," she says.

The climate may mask gender bias.
Women usually are unaware of the extent of the gender bias in the organization, according to Allen. "We live in a culture in which it exists, so we just accept it. Women see no gender bias in the company, but often there are no women at the top. We must wipe the veil from their eyes," she says.

One of the most pervasive problems for women is their invisibility, according to Allen. "Women often don't get the credit for their ideas," she says. A woman may mention an idea to a male co-worker, who presents the idea and takes the credit. If she does bring up the idea in a meeting, she's overridden or ignored, or—even worse—she develops a reputation for being a whiner. "One woman who became tired of being ignored in meetings began standing up every time she had something to say. The men had to listen to her. After a year, she didn't have to do it anymore," Allen says, adding that this invisibility problem is widespread. "Men don't mean to do it. We're shorter. If a woman is standing, talking with a male co-worker, it makes eye contact more difficult," she says.

Doyle Thomas says that behavior that's discounted when coming from a man often is considered objectionable in a woman. "A woman hardly ever is accused of being hard-nosed. Instead, she's a bitch. She isn't lacking consistency, she's scatter-brained. She isn't overworked, she's too weak to handle it," she says.

Kenner-Varner agrees. "It's because of the gender differences in society. When we walk through the door of the organization, we don't drop our differences and biases. They're an ingrained way of looking at things," she explains.

"Old habits die hard," says Tim Jernigan, VP of personnel for Dallas-based Half Price Books. "Gender bias is recognized, but it's still encouraged by advertising, movies, and so on."

Although Butler didn't include sexual harassment costs in her audit of Utilico, another study done the same year, The 1988 Working Women Sexual Harassment Survey estimated the cost for a company of the same size to be $6.7 million, clearly a good expense to eliminate.

The best way to wipe out sexual harassment is to eliminate all gender bias, according to retired Army Brigadier General Pat Foote. "When women aren't permitted to have full participation in an institution, such as the military...then there's a tendency to devalue them as partners in defense, and from that can stem sexual harassment and other unwanted forms of behavior," she says.

"Most gender bias isn't intentional or malicious. It's largely unconscious and unquestioned," Mattis explains. It's difficult to measure whether the problem has become worse or progress is being made. "Increased awareness may increase reporting of gender bias. It doesn't mean it actually has increased in frequency. Certainly, the representation of women in the workplace has increased, so there's a greater potential for such bias to occur," she says.

Kenner-Varner adds, "I think gender bias is disappearing from entry-level and mid-management positions, perhaps just because there are so many women in those positions now, but the problem seems to be increasing in upper management. There are fewer women at that level, so fewer men are used to working with them."

Whatever problems women have are compounded for minority women. People of the same race have a common outlook on some issues, regardless of gender. On the other hand, men of all races have common ways of looking at things that are different from those of women. "Women of color get it from both ends," Kenner-Varner says.

The DOL report shows that women plateau at a lower level than men in U.S. corporations, and that minorities plateau at lower levels than women. "Approximately half of every minority group is female, however," Mattis points out. When that fact is taken into account, it appears that minority males may be doing better than women in general.

Oliver Singleton, VP of Professional Development Group Inc. in Eden Prairie, Minnesota, works for a white, female president. He tells of calling on clients with his boss and hearing them ask her how long she had been working for him. "I thought I really had problems because I was a black male—but at least I'm a male," he says.

Gender bias may be magnified by the recession, as women compete with men for jobs that are increasingly scarce. "Men are traditionally the breadwinners, and a breadwinner needs a job. Some men will call a newly hired female co-worker on the phone and say, 'I'll make sure you never get a promotion,'" Allen says.

Women have their own gender biases.
Some problems are created by women themselves. These problems often can be overcome through awareness. "Women may rise up the ladder and realize that they liked the lower position better," Butler points out. "It's lonely at the top, and women generally are driven by the need to connect. Some consciously prefer to be removed from the fast track, but others are unaware that they're sabotaging their own success," she says.

Networking can be helpful, but some women shy away from women's groups, and instead try to be part of the old-boy network, according to Kenner-Varner.

Networking can help women deal with guilt feelings. "Concern about leaving their babies can be crippling. They need to get together and talk about it," Allen says.

"You can be a working mother or a corporation woman if you want. We must validate these possibilities and not make women feel guilty," Kenner-Varner adds.

Mattis says that women need to be aware of the consequences of self-selecting careers on the staff side of companies, because such jobs are unlikely to lead to top positions. "Women may believe that staff jobs offer more flexibility, but we know that such jobs also may require more face time. The performance criteria are less objective than in line jobs, so it may be more difficult to demonstrate your contribution," Mattis explains. Women are promoted based on performance, rather than potential, so it can take longer to advance in staff positions.

Even in the right job, low self-esteem creates problems for some women. "We try to do everything, and feel splattered all over. This causes us to think we aren't good at anything and can't focus on just one thing," Allen says.

"Either unwilling or disbelieving in her right to be judged, a woman may stumble, balk or simply stop working on a project to avoid being evaluated on her efforts," Butler says. This is already evident by age six. For example, she tells of a little girl on a soccer team, who was good at getting the ball down to the goal, but would leave it and run back to her defensive position, instead of passing it to one of the boys or making the goal herself.

Butler surmises that the first time the girl had found herself in front of the goal with the ball, she either had tried for a goal and missed or had made the goal and been called a ball hog by the boys. "I've seen similar self-sabotage among women on the brink of success," she says.

When working with such an employee, Butler recommends, "If she sabotages her own success, remind her that her work needn't be perfect, but that it must be on time. Tell her her work is good and that you appreciate her promptness and sensitivity to others' needs to meet deadlines. Get her to focus on how her piece is important to the whole. In my experience, women will do for the group that which they won't do for themselves (which they perceive as selfish), because they're focused on being judged."

Perhaps because of this prevalent insecurity, women may be more reluctant than men to point out unfair practices and behaviors. "It makes a woman angry when men talk over her head, but she may not say anything about it because it seems trivial," Allen says.

Because they're feedback-deficient, women may be less likely to offer feedback to others. "If we deny feedback to colleagues, we aren't seen as team players; by denying feedback to subordinates, we fail to get full cooperation and productivity from them. On the other hand, women who bombard colleagues with criticism aren't constructive, either," she says.

Insecurity and inexperience in a work environment may lead to other behaviors that can raise the ire of co-workers, both women and men. Some women may flirt to gain some advantage. "Although a woman may endear herself to one superior by various degrees of flirting, she'll likely alienate other men and women whose respect she needs," says Jernigan.

"Some people argue that younger women believe that they can have it all, but no one, not even men, can have it all—at least, not all at the same time,' says Mattis. "Some of the problems women face aren't created by them; they're inherent in our society. Women need to be more aware of them, for their own self-defense," she adds.

After living with gender bias all their lives, many women actively participate in the continuation of it. They have the same prejudices about themselves and other women that they find so frustrating when expressed by men. As more women prove themselves—and society adapts—these attitudes will fade.

Turnover is expensive.
In addition to the many types of gender bias, including their own, most women must deal with more family and household problems than most men in the workplace do. Women's needs already have driven organizations to provide such options as family medical leave, maternity leave, flex time, job sharing and day care. As these programs become available, men want access to them as well.

"Men in the younger generation don't want to be absentee dads. Neither women nor men want to give up everything in life just to get ahead," says Allen.

Providing family-friendly programs won't keep women in your organization if they hit the glass ceiling, however. They'll leave and go to work for your competitor or become your competitor, an option that has resulted in the recent proliferation of successful, women-owned companies in the U.S. Many of these women left their jobs as a direct result of gender bias.

Mattis estimates that replacement costs total 93% of the departing employee's annual salary. "Furthermore, it's likely that her replacement also will be a woman. You can't ignore or get around dealing with the cost of losing female talent," Mattis says. You'll end up training a new employee, while your training dollars benefit your competition.

It cost Utilico $4,561,190 to replace women who left the company in 1988, according to Butler. It's the most capable women who have the greatest choice of options, who are more likely to leave if you don't make staying a more appealing option than leaving.

Many women were angered when Marilyn Quayle told the 1992 Republican Convention in Houston, "Most women don't want to be liberated from their essential natures as women." They felt that the attitude that women are all naturally unsuited for certain types of roles put limits on their opportunities, and resented having someone else presume to speak for them.

There is some truth to the statement, however. All of us, women and men, do want to be allowed to live according to our essential natures as individuals. That the wonderful differences between individuals far outweigh the superficial differences between genders, races or other categories, will become more evident as men and women of all kinds learn to appreciate each other and work together.

As more women of all types reach top management in our corporations, these problems must be addressed. If we work to eliminate biases of all kinds, whether against women, minorities or "men who walk funny," and then empower all individuals to be themselves, we'll benefit from all employees' unique contributions. Not only is this the way to eliminate the unnecessary expenses of gender bias; it's also how to put the genie to work.

Personnel Journal, November 1992, Vol. 71, No. 11, pp. 70-80.

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