Play Fair, Pay Fair: A systemic model of pay system -related factors contributing to gender-based pay differences

Equal pay is not just an important value in working life, but an obligation of several national and international laws and regulations. Nevertheless, women still earn on average about 17 % less than men do in Finland. In this study, the gender pay gap is viewed from the organizational perspective. I have studied which factors affect the gender equality of the organizations' pay systems and their implementation. Identified factors form a systemic model, which does not just highlight the factors and practices underlying the gender equal pay system, but also the relationships and dependencies between them. The research questions are: 1) Which factors (like actors, structures and mechanisms) have empirically been proven to affect the equality of the organizations’ pay systems, and 2) What kind of dependencies and interrelationships exist between the identified factors? The data consists of previous studies on gender equality in organizations’ pay systems published in international peer-reviewed scientific journals. After exclusion criteria, 18 international peer-reviewed articles were included in the study. The data was analyzed by using the qualitative meta-analysis. The analysis contained four different stages: 1) creating a conceptual framework, 2) clustering the data, 3) synthesizing the results, and 4) creating the systemic model. The results showed that different pay systems produced different gender pay differentials. Even the job evaluation, which has been considered one of the most important tool to promote pay equality, produces a gender pay gap. In addition, certain performance-based pay systems, such as piece and reward rates, tend to work against women. Women also receive less reward based on performance evaluation than men do, even if they perform equally. However, the relationships and dependencies found in the systemic modeling show that the reason is not so much in the pay systems themselves and not even in the implementation of the pay systems. On the contrary, it seems that pay systems, pay setting and other pay practices reproduce the traditional gender roles and the undervaluation of female work resulting in lower wages for women. The situation may be that many organizations unconsciously repeat the existing gender pay gap in their pay practices. The results prove that in order to reduce the gender pay gap, organizations should strive to create a climate that promotes equality in all their actions. Furthermore, organizations should also develop transparent practices to support the implementation of the pay system, and ensure that decision makers are held accountable in making fair and equal decisions at the various stages of the pay determination.