In February this year, the Indian Institute of Management, Ahmedabad (IIM-A), one of India’s premier management institutes, released a report on the state of gender balance in senior leadership positions. Drawing on responses from 4,146 senior executives across 109 leading Indian companies (all part of the NIFTY 200 NIFTY 200 NIFTY 200 Index The NIFTY 200 index represents about 86% of the free float market capitalisation of the stocks listed on India's National Stock Exchange (NSE) ), it showed that women earned, on average, just 85% of what their male counterparts did.
While a 15% difference in one year might not sound like much, it leads to a significant loss of earnings for women over the years. The gaps increase even more every time a woman is promoted.
Over time, this leads to what we all know of as the gender pay gap, a measure of the difference between men’s and women’s average earnings. The gender pay gap is a result of pay inequity and unequal representation at all pay levels throughout an organisation.
It’s impossible to undo in months or even years the results of gender pay gaps that have built up over decades. What is possible, though, is to shift our focus to another concept—pay equity, which means paying both men and women the same salary for the same job.
The simplicity of equal pay often gets lost in jargon and statistics or is conflated with the pay gap. They are, however, distinct.
For example, take a consultancy firm. It can pay equally and still have a gender pay gap. If most of the women it employs are associates (earning the same as their male peers) and most of its partners are men (out-earning the associates), there will be a massive gap in their earnings, explains Mitali Nikore, an economist and gender policy specialist.
The idea of pay equity is at least a century old. The International Labor Organization (ILO) introduced the first draft of an equal remuneration convention in 1919. But even in 2022, the income of an average Indian woman is just 20.7% just 20.7% World Economic Forum Global Gender Pay Gap Read more that of an average Indian man, according to a report by the World Economic Forum. In Iceland, it’s 86%. In Rwanda, 80.9%. And in the United States, it’s 65%.
Last month, Google Google India Today Google agrees to pay 118 million to female employees to settle gender discrimination case Read more , which often emphasises its inclusive workplace culture, had to pay US$118 million to settle a class-action gender discrimination lawsuit that covered about 15,000 women.