Wage gap linked to customer bias

June 3, 2009

Researchers have helped solve the mystery of why white men continue to earn 25 percent more than equally well-performing women and minorities. Managers and business owners must pay a premium for white male employees because customers prefer them, says David Hekman, assistant professor in the Sheldon B. Lubar School of Business at the University of Wisconsin-Milwaukee (UWM).

The study will be published in the Academy of Management Journal. "Customers, from students buying textbooks to patients in an examining room, are consistently biased in favor of white men," says Hekman. "Because customer satisfaction is critical for organizational survival, business owners and managers will hire white men when possible and will pay lower salaries to the women and minorities they do hire."

Hekman and colleagues at four other North American business schools showed customers a video featuring either a black male, a white female, or a white male actor playing the role of an employee helping a customer. Those viewing the white male not only reported being 19 percent more satisfied with the employee's performance, but also they were more satisfied with the store's cleanliness and appearance. This despite the fact that employees demonstrated the same scripted behaviors and the store background, camera angles and lighting were identical.

These findings were also borne out through more than 10,000 medical patients' ratings of their doctors. Patients who received e-mail from their doctor were more satisfied with their doctor's competence and approachability, but only if the doctor was a white man.

The findings also reveal some potentially devastating, unintended consequences of the Paycheck Fairness Act (H.R. 12 and S. 182), introduced in 2009 to narrow the wage gap and now awaiting action by the U.S. Senate. "Because customers prefer white men employees, even when women and minorities perform equally well, there is a real danger that increasing women's wages so that they are equal to those of may cause managers to hire fewer women," Hekman explains.

The researchers say the act could be more effective if it also addressed ways to reduce the linkage between biased customer opinions and employee pay because more than 60 percent of employees have at least some of their pay directly linked to customer satisfaction survey results.

Hekman and colleagues offered straightforward policy suggestions in the Academy of Management Journal. Among them: make sure surveys target specific employee behaviors. For example, don't ask customers if they would recommend a physician; ask them how many times the doctor asked a patient if she had additional questions or understood key medical terms.

No more anonymous customer feedback surveys, either, urge the researchers. These can significantly affect the pay scale in many industries.

"Make sure customers are identifiable and therefore at least somewhat accountable when they provide ratings," says Hekman. "People may do all sorts of bad things when they are anonymous - just check out the reader postings on any blog."

Source: University of Wisconsin - Milwaukee


   
Rate this story - 4 /5 (2 votes)

Rank Filter

Move the slider to adjust rank threshold, so that you can hide some of the comments.


Display comments: newest first


June 3, 2009 all stories

Comments: 3

4 /5 (2 votes)

  • hide
  • Related Stories

  • Workers Who Feel Trusted Will Boost Sales and Provide Better Customer Service: Study
    created May 07, 2008 | popularity not rated yet | comments 0
  • 'Industrial relations' employee satisfaction dependent on more than relative pay
    created Aug 27, 2008 | popularity not rated yet | comments 0
  • Xenophobia, for men only
    created Feb 04, 2009 | popularity not rated yet | comments 0
  • Black patients at higher risk for colon polyps
    created Sep 23, 2008 | popularity not rated yet | comments 0
  • Poor customer service leads to loss of customers
    created Mar 26, 2009 | popularity not rated yet | comments 0



  • hide
  • Relevant PhysicsForums posts

  • Theater of War - modern warriors find solace in ancient tales
    created Feb 07, 2010
  • The business and politics of the Super Bowl
    created Feb 05, 2010
  • Positive prudence
    created Feb 05, 2010
  • Polar populations
    created Feb 05, 2010
  • More from Physics Forums - Social Sciences

Other News

Study challenges bird-from-dinosaur theory of evolution - was it the other way around?

Study challenges bird-from-dinosaur theory of evolution - was it the other way around?

Other Sciences / Archaeology & Fossils

created 54 minutes ago | popularity 5 / 5 (1) | comments 1 | with audio podcast

(PhysOrg.com) -- A new study just published in the Proceedings of the National Academy of Sciences provides yet more evidence that birds did not descend from ground-dwelling theropod dinosaurs, experts say, a ...


Women on board: Does forced diversity hurt firm performance?

Other Sciences / Social Sciences

created 2 hours ago | popularity not rated yet | comments 0

(PhysOrg.com) -- New SEC rules will require public firms to disclose what role, if any, diversity plays in appointing members to their corporate boards, but University of Michigan researchers say any forced restructuring ...


Baseball teams with more international players draw more fans, profits

Other Sciences / Social Sciences

created 1hour ago | popularity not rated yet | comments 0

(PhysOrg.com) -- Ticket revenue increases by roughly half of a million dollars for each international player added to a Major League Baseball team, showing a sharp swing in fan favoritism for internationally diverse teams, ...


'Counterfactual' thinkers are more motivated and analytical, study suggests

Other Sciences / Social Sciences

created 4 hours ago | popularity 4.5 / 5 (2) | comments 2 | with audio podcast

(PhysOrg.com) -- "If only I had..." Almost everyone has said those four words at some time. Rather than intensifying regret, '"what if" reflection about pivotal moments in the past helps people to weave a coherent life story, ...


Office romance? Not a problem most of time: study

Office romance? Not a problem most of time: study

Other Sciences / Social Sciences

created 2 hours ago | popularity not rated yet | comments 1

(PhysOrg.com) -- Pam and Jim on The Office. Meredith and McDreamy on Grey's Anatomy. Television shows depict many workplace romances, but in the real world how do co-workers view love on the job? According ...