Pay maximize their potential… [but] it might also be

Pay
is at the epicenter of employee relationships, holding significant performance,
financial, and legal implications.  At
the same time, pay is one of the key factors affecting employee behaviors and
attitudes (Schreurs et al., 2013).  In addition, employee pay is the main cost of operating
a business “representing 57% of the total value of goods and services produced
in the United States” (Williams, McDaniel, & Nguyen, 2006).  Pay affects everyone within an organization,
from the Chief Executive Officer to the administrative assistance. Traditionally,
money has been the preferred job outcome for employees and a vital motivational
tool used by employers to attract and retain workforce (Currall, Towler, Judge,
& Kohn, 2005). Women
represent approximately fifty percent of the workforce in the U.S.; however, on
average, they earn less than men (U.S. Census Bureau, 2017). According to the
Labor Department’s Bureau of Labor Statistics, in 2016 women earned 79 cents
for every dollar a man made.  This wage
gap is a topic that has received a great deal of attention from politicians,
executives, and scholars worldwide because “it is not only a moral value and an
important policy to enable men and women to maximize their potential… but it
might also be a tool for economic and welfare growth” (Mussida & Picchio,
2014).

In
the past one hundred years major legislation has been enacted to help close
this wage gap; however women are still not close to achieving pay parity to
men.  In 1920, women earned the right to
vote.  In 1963, with the enactment of the
Equal Pay Act, women earned the right to get paid equally to men for performing
the same job. In 1978 with the enactment of the Pregnancy Discrimination Act
women gained protection against sex discrimination on the basis of pregnancy.  Over the past three decades women have made
great progress in the U.S. labor markets, “including increased labor force
participation, educational attainment, and significant increases in real
earnings” (Bacolod, 2017).  In 1991, the
Family and Medical Leave Act offered job protection to both male and female
employees and allowed them to take time off for qualified medical and family
reasons. And in 2009, the Lilly Ledbetter Fair Pay Act was enacted in order to
restore the protection against pay discrimination that was exposed as a result
of the Supreme Court’s decision in the Ledbetter versus Goodyear Tire and
Rubber case.   

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Nevertheless,
even though women tend to earn than men for doing similar jobs, research
indicates that they are at least as satisfied with their pay as their male
coworkers (De Gieter, Hofmans, De Cooman, & Pepermans, 2009).  This is what Crosby (1982) called the
paradoxical female conception. Williams, Mc Daniel, & Nguyen (2006) and
Young (1999) found in their studies that females are less sensitive than males
to pay discrimination and more satisfied with their pay than men.

Pay
satisfaction has four dimensions: 1) satisfaction with the pay level; 2) satisfaction
with structure; 3) satisfaction with pay raises; and 4) satisfaction with
benefits (Heneman and Schwab (1985). A major focus of this study will be to
review how the perception of the wage gap impacts pay satisfaction and job
turnover. Organizations attempt to retain experienced and high skilled
employees to minimize turnover cost (Dinger, Thatcher, Stepina, & Craig,
2012). Organizations lose on average $9,000 when replacing an employee with one
year or less tenure and $47,000 when replacing an employee with 2 or more years
of tenure (Avery, Volpone, McKay, King, & Wilson, 2012).  As result, employee retention is a major
priority for managers (Harris, Li, & Kirkman, 2014).

Statement
of the Problem

The
gender wage gap is an important topic that affects everyone in society. Equal
pay is not just a women’s issue, it is a moral issue (Mussida & Picchio,
2014).  Families increasingly rely on
women’s wages to make ends meet and a great percentage of households depend
exclusively on women for financial support (Stranberry, 2013). Many studies
have shown that the gender wage gap is not a myth but a reality that exists in
the United States and around the world (Bolitzet & Goodland, 2012; Cohen,
2013, Kilgour, 2014; Lyons, 2013; Travis, 2014). It was not long time ago when Wal-Mart
spent billions of dollars defending what would have been the largest
class-action lawsuit in history, brought by their female employees alleging pay
and promotion discrimination based on gender.

According
to the Labor Department’s Bureau of Labor statistics, in 2016 women earned 79
cents for every dollar a man made.  Exhibit
1 provides a historical comparison of the median income by gender from 1990 to
2016. In every single year the median income for men has been higher than the
median income for women (U.S. Census Bureau, 2017). The focus of this
dissertation, as shown on Exhibit 2, will be on the perception of the wage gap
and its relationship to pay satisfaction and employee retention.  Additionally, I will examine the relationship
between the perception of wage gap and the demographic variables of gender,
educational level, and family status. Significance
of the StudyThe
wage gap will not go away on its own but there are many things that can be
implemented in the workplace, communities, and colleges to make a difference.
Understanding that the wage gap exists and the reasons behind it could be
beneficial at the organizational, political and educational level. Equality
between women and men is vital for the creation of jobs as well as pay
satisfaction, job productivity, employee retention, and job satisfaction. Understanding
these relationships will give organizations a better understanding of where
marketing dollars need to be spent to better educate the population, so as to
improve the profitability of companies. Methodology:This
research study will focus on people between the ages of 30 and 55 and of all
educational levels.  A cross sectional
survey in the Mid-Atlantic region will be exploited.  A cross sectional survey is one of the most
commonly used methods to capture specific information about an entire
population through a sample (Peck, Olsen, & Devore, 2001).  According to de Vaus (2001) “cross-sectional
designs have three distinctive features: no time dimension; reliance on
existing differences rather than change following intervention; and groups
based on existing differences.”  This
research study will attempt to capture the data for identification of
statistically significant differences in the perception of the wage gap, pay
satisfaction, and turnover based upon the varying demographics rather than look
to identify the reasons why.  Research
Questions-       
RQ1:
What
is the relationship between the perceived wage gap and employee retention?-       
RQ2:
What
is the relationship between the perceived wage gap and pay satisfaction?-       
RQ3:
How
do the demographic variables of gender, educational attainment, and family
status affect the perception of a wage gap?Working
Model

The
focus of this research study will be on the perception of the wage gap and its
relationship to pay satisfaction and employee retention.  In addition, the relationship between the
perception of wage gap and the demographic variables of gender, educational
attainment, and family status will be examined. Hypotheses

–       
H1:
Perception of wage gap will be negatively related to employee retention.

–       
H2:
Perception of wage gap will be negatively related to pay satisfaction.

–       
H3a:
There will be a statistically significant difference between genders in the
perception of a wage gap for working adults

–       
H3b:
There will be a statistically significant difference based on educational
attainment in the perception of a wage gap for working adults.

–       
H3c:
There will be a statistically significant difference based on family status in
the perception of a wage gap for working adults.

Definitions
of Terms

Contented female worker paradox
– the phenomenon where women are at least as satisfied as, and in some cases
more satisfied, with their pay than their male colleagues even though they know
they earn less for doing similar jobs (Brown, 2001; Crosby, 1982; Graham &
Welbourne, 1999)

Fatherhood Premium
– is a gender wage gap theory that focuses on the reward at work for men having
children in terms of life-time pay (Kelly & Grant, 2012)

Gender Wage Gap
– women’s earning as a percentage of men’s subtracted from one hundred
(Kilgour, 2014, p. 1)

Job Satisfaction
– “Individual inclination, expression, feeling, or disposition relative to work
assignment and the environment in which it is performed” (Young, 2008, p. G-6)

Motherhood Penalty
– is a gender wage gap theory that focuses on the penalization at work for
women having children in terms of life-time pay (Kelly & Grant, 2012)

Pay – refers to “all
forms of compensation, such as direct cash payments (e.g. salary) indirect,
noncash payments (e.g. benefits); and the amount of pay raises and the process
by which the compensation system is administered” (Williams et al., 2006)

Pay Referents
– “are those with whom workers make pay comparisons” (Brown, 2001)

Summary

There
are four chapters following this one. Chapter 2 involves a review of the
relevant literature on the wage gap, pay satisfaction, job satisfaction, job
productivity, and employee retention and their relationship to the demographics
of gender, educational attainment, family status and organizational tenure. The
contribution of this research is then explained. Chapter 3 will examine the
research methodology used for this study. The first part of Chapter 3 will
discuss the subjects who were sampled. The second part will present the
procedures used to conduct the survey. The third part will cover issues with
the instrument used. The last section of Chapter 3 will cover the techniques
used in this study. Chapter 4 will discuss the findings from this study and Chapter
5 will discuss the implications of the research presented in this dissertation
and recommendations for future research.

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