Hybrid event: How and when gender predicts pay raise: the role of base pay and gender diversity
The study tests the indirect effect of gender on pay raise via base salary and moderated by gender diversity. We used a sample of employees from a fortune 500 company to test our hypothesis. The results of our study show that gender predicts salary increase indirectly via salary base. Women indirectly received a higher annual salary increase than men to compensate to previous inequity. However, gender diversity moderated this indirect relationship. Specifically, women received lower salary increase via base salary when the unit scored higher on gender diversity. We used institutional theory to argue that using superficial measures of gender diversity by thriving for equal representation of women in organizations without implementing transparent compensation policies is not enough and could backfire.