REPRINT H037QB

PUBLISHED ON HBR.ORG
DECEMBER 02, 2016

ARTICLE
GENDER
Do Conservative
Managers Give
Smaller Bonuses to
Women?
by Forrest Briscoe and Aparna Joshi

This document is authorized for educator review use only by Hary Febriansyah, HE OTHER until April 2018. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu
or 617.783.7860
 GENDER

Do Conservative
Managers Give
Smaller Bonuses to
Women?
by Forrest Briscoe and Aparna Joshi
DECEMBER 02, 2016

Every year, Len and Cal two thoughtful partners in a law firm have to evaluate a handful of
direct reports and assign them end-of-year bonuses. Both Len and Cal take this responsibility very
seriously, as their decisions are consequential for their subordinates and their firm. In most
respects the influences on Lens and Cals decision making appear similar: they both follow the
same company policies and norms, and they both have similar backgrounds and pedigrees. Yet the
outcomes of their

COPYRIGHT 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 1

This document is authorized for educator review use only by Hary Febriansyah, HE OTHER until April 2018. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu
or 617.783.7860
bonus decisions are remarkably different: over the years, Lens female employees have
consistently received a greater share of the bonus pool, compared with Cals female employees.

One difference between Len and Cal is that Len is liberal and Cal is conservative. But why would
their political views matter when they allocate bonuses to their male and female reports?

Len and Cal are fictional characters, but they represent the findings of our research (forthcoming in
the Academy of Management Journal) on one large U.S. corporate law firm, which indicates that the
political values of managers can be a powerful influence on how they allocate bonuses.

A large body of research has uncovered how political values shape decisions in our day-to-day
lives, from what we buy to where we live to what types of leisure activities we take up. Politics and
work, however, have been viewed as distinct spheres of life, making it challenging to unpack the
extent to which these values seep into decision-making at the office. After all, managers often do
not disclose their political leanings at work.

To overcome this challenge, we gathered publicly available donations data from the Federal
Election Commission. We determined the political ideology of 119 managers working within our
sample law firm by finding how each person contributed to either Republican or Democratic
campaigns from 1990 to 2014. We looked at how much, how often, and for how long they
contributed to each party. In this way, we identified where on the liberal-versus-conservative
continuum each partner fell. For example, a partner who donated 80% to Republicans and 20% to
Democrats would be coded as conservative, but not as conservative as a partner who donated
100% to Republicans. (In our sample, there were more liberal than conservative partners in the
firm, and there were more male than female associates, although at low levels of seniority, the
numbers were close to equal.)

Do Political Donations Really Tell You How Liberal Or Conservative

Someone Is?
The methodology we used in this study is based on a validated technique
used by M.K. Chin, Donald C. Hambrick, and Linda K. Trevino in a 2013
paper published by Administrative Science Quarterly. They developed the
technique and used it to estimate how liberal and conservative CEOs were,
giving each a score based on the same methods were using here.

To validate this method, they then asked a diferent group of executives to

take a survey identifying how liberal or conservative they were on a seven-
point scale (Very Conservative, Moderately Conservative, Slightly
Conservative, Middle of Political Spectrum, Slightly Liberal, Moderately
Liberal, Very Liberal). They then calculated scores for those executives
based on their political donations just as they did with the CEOs.

Their work showed a .51 positive correlation between the index and self-
identifed political ideology. As a reminder, -1 shows a negative correlation,
0 is no correlation, and +1 is perfect correlation; typically, any correlation
above .4 between a single-item survey and a composite
 index is considered valid. So, while not perfectly precise, this method has
been found to be a moderate indicator of political ideology.

We then used the data we had collected to see if there was an association between a managers
political values and how they allocated bonuses to their male and female direct reports. As in most
professional service firms, supervising managers in this firm evaluate their direct reports, and those
evaluations feed directly into reward and promotion decisions. To capture the end result of this
process, we gathered the annual bonus allocation decisions for all the firms associates (359 in total)
from 2002 to 2007, and linked those to the partners supervising them each year.

What we found
Our findings revealed a gender gap in bonuses given to men and women that was minimal for
partners at the liberal end of the ideological spectrum but much larger at the conservative end. Under
the most conservative managers (those who only donated to Republican campaigns), men received
nearly $5,000 more, on average, in annual bonuses than women. Importantly, these findings could
not be explained away by differences in associates backgrounds or work efforts, including their
billable hours.

This effect was even greater for law firm associates who had more seniority and worked for
conservative partners. Under the most conservative managers, experienced men received over
$15,000 more in annual bonuses, on average, than comparably experienced women. In contrast,
the gap was smaller for newer employees. Its worth noting that we found these effects even after
accounting for the increase in overall bonus size that comes with seniority. And under most liberal
managers, the associates gender did not play a statistically significant role regardless of
seniority.

To account for other factors that might influence these findings, we ran a number of controls to
see if differences in the backgrounds or expertise of partners and associates were driving this
gender gap. We found that they were not. We also ran numerous robustness checks to account for
alternative explanations, such as individual differences in human capital.

Why does this happen?

Our findings raise many questions about why managers political values would shape how they
allocate rewards to men and women. Because we could not directly measure their psychological
processes, we drew on prior research in sociology and political psychology to interpret these
differences between liberal and conservative managers decisions.

Although firm structures and policies can be designed to limit gender inequality, in many
professional services jobs the onus of making critical decisions about bonuses and promotions falls
on the shoulders of managers and team leaders. Since there is often a great deal of uncertainty about
how work should be evaluated in these fields, managers may fall back on values and beliefs that
shape how they perceive and interpret information about workers. So, basically, there is room for
personal beliefs to play some role in their decision making and this is where personal political
ideology can come in.

Recent research has shown that managerial discretion is linked to bias in worker rewards both
men and women managers have been found to favor men in their decision-making around
bonuses, and the presence of this bias helps explain the persistent gender inequality in pay we still
see today.
However, managers vary in how much they perpetuate this bias, depending on their own personal
values and beliefs. So supervisor beliefs about social change and inequality in society primary
elements in whether one is ideologically liberal or conservative can affect decisions about
performance and bonuses.

We theorized that liberal and conservative supervisors rely on different heuristics when they
make reward decisions. Indeed, a vast body of research in this domain shows systematic
differences in how liberals versus conservatives think about society; for example, liberals are
found to be concerned about systems and norms disadvantaging certain groups in society,
including women, and they may be more interested in rectifying these than in preserving the
male-dominated status quo.
Conservatives, on the other hand, are found to value aspects of those systems and norms that
incentivize and reward individual contributions, and they tend to be more accepting of
differences in outcomes, including between women and men, as reflecting varied motivations
and capabilities. So in our study context, where performance is more ambiguous and evaluation
requires more subjectivity, ideology may influence decisions such that liberals may respond more
favorably to female subordinates as a way to reject male-typed norms, and conservatives may
respond more favorably to male subordinates as a way to maintain the status quo in a professional
context that favors men.

This may help explain why we see a larger gap in bonuses as employees gain seniority. As they
shift to more challenging and higher-level assignments, the ambiguity around their performance
increases, driving managers to rely even more on their own discretion.

Of course, there may be other explanations were unable to rule out were only beginning to
measure how political leanings affect the workplace. Our findings are based on the study of one firm
and may not generalize elsewhere though they appear consistent with other recent research on the
effects of political ideology on gender parity in law firms and large corporations.

But they could apply to many professional settings, where supervisors tend to lack objective
performance indicators and rely more on subjective discretion in evaluating performance and
allocating rewards. Wed expect that the impact of supervisor political values would decrease in
settings involving routine work that can be largely captured through objective performance
indicators.

Overall, our work suggests that professional firms may start to address gender pay inequality by
increasing transparency on reward and promotion decisions for men and women.
Forrest Briscoe is an associate professor of Management and Organization, and a Frank & Mary Jean Smeal
Research Fellow, in the Penn State Smeal College of Business.

Aparna Joshi is the Arnold Family Professor of Management at Penn States Smeal College of Business.