Tournament jobs and why women in finance might get smaller bonuses
On average, women in banking get smaller bonuses than men. We know this definitively because the UK's gender pay gap reports tell us so. At Deutsche Bank in the UK, for example, the average female bonus is less than half a man's. At Goldman Sachs, the average woman in the UK receives a bonus equivalent to only 34% of the average Goldman man's.
Get Morning Coffee ☕ in your inbox. Sign up here.
This looks a lot like sexism, and maybe it is. But it's also possible that women are self-selecting away from jobs with the biggest bonuses.
A new study* by academics at the University of Virginia and the University of Zurich suggests that men are much more likely to compete in "tournament" jobs with big prizes than women, and that women tend to steer clear of these roles from the outset.
The academics ran a competition that offered male and female entrants the opportunity to complete a work task that they said would only take 10 minutes, but which came with the opportunity to win bonuses of $12 to $36, although this would possibly take more time. They found that the higher the bonus, the less likely that women were to enter the competition. At lower bonus levels, men and women were equally enthusiastic.
The researchers concluded that this was because tournaments of this kind imply that more working time will be required to win the bonus, and that women are less likely to make open-ended time commitments because they 'bear primary burden of unpaid caregiving and home production work.'
It sounds a bit trad wife. Women in banks who are single, primary breadwinners, or determined to earn high bonuses while maintaining time for their families, might argue it's rubbish and gives banks an excuse to pay less.
However, it's also notable that when banks attempt to justify their gender pay disparities, they typically point to what they say is a self-selected absence of women in the highest paying jobs. It might be, too, that if women want top bonuses, they need to enter the top tournaments.
*Tournament Incentives and the Triple Bind for Working Women
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.) Eventually it will – unless it’s offensive or libellous (in which case it won’t.)
