Subjective Performance Evaluations

After this very general view on structural inequalities between men and women in society I will focus on a very narrow topic. The focus is necessary to address one mechanism in labor market

4In this context it should be mentioned that other potentially structuring categories of analyses exist as well even if they do not have the same dispersion as gender and race. Among them are for example disability, sexual orientation and trans-gender or religion.

rewards determination that should not be seen as gender neutral for my thesis. The subject of inquiry is how employers as one main actor in the process of labor market rewards setting -evaluate their employees and attribute rewards to their accomplishments. Standard human capital theory assumes they have perfect unbiased information on productivity. In this section we will see that this assumption is hardly feasible and should be modified for the purpose of explaining gender differences in health effects.

In my theory I assume that workers receive their labor market rewards according to the perceived effort, not the actual effort. In the following part I explain why.

Employers want to maximize their profit and therefore want to pick the most qualified candidate for a job or promotion. If criteria which can be directly compared⁵ are at hand, employers will be able to assess productivity rather objectively. The (subjective) evaluation of effort in contrast is much more subject to subconscious prejudices, feelings, and errors in judgment. As it happens, rewards are most often awarded according to subjective evaluation, not objective measures of performance (Prendergast & Topel 1996, MacLeod 2003). Surprisingly, one study by Alexander & Wilkins (1982) does not even find a statistical significant association between subjective and objective measures of performance among vocational and rehabilitation counselors. Seemingly irrational judgments about performance can also be found among colleagues at the same level. In one study, considering someone for cooperation at work is only dependent on actual competence of those persons if interpersonal feelings are positive. If they are negative competence does not play a role (Casciaro & Lobo 2008). Therefore, in the following I will go into detail on gender specific problems of subjective evaluations.

This rather intuitive claim about subjective evaluations becomes especially important if we have reason to believe that there are systematic biases in evaluation towards certain social groups. There is substantial research from the fields of (organizational) psychology which backs the claim about the subjectivity of performance evaluation and a related gender bias. The argument below holds in case we are talking about an employer as an actual individual, but also for the employer seen as a firm or as another type of organization. In classical organizational theory the subject of investigation is often conceptualized as gender neutral. The rationale behind this approach is that the defining elements of an organization in the classical view is the rationalization of all social processes (Wilz 2002, chapter 1).

Analog to the critique of neoclassical theories of the labor market we can reasonably doubt the adequacy of a gender neutral approach here. Recent empirical studies and the development of theories of gendered organizations also cast serious doubt on the classical view (Wilz 2002, 44-46). For the purpose at hand, this means that performance evaluation can be seen as subjective regardless whether the employer is an individual or an organization.

5Such as work hours, tenure, piece-rates, or credentials.

A review of the literature allows the statement that subjective evaluation often shows considerable gender (or race) biases. This is important because of the finding that women are assigned to jobs where effort is easier to monitor while men’s jobs encourage effort by efficiency wages (Bielby & Bielby 2002, 197). Kanter (1977, 216) writes that such differences in surveillance are integral part of male company culture:

“The Token⁶ does not have to work hard to have her presence noticed, but she does have to work hard to have her achievements noticed.”

Kanter (1977, 219) states also that persons in Token positions are under much stronger scrutiny, have to perform higher, and need to make bigger efforts at fitting in, not standing out too much, keeping themselves constantly under control which is very taxing.

In the following I will give some examples of studies which warrant a claim of subjective evaluation that might result in a gender bias.

If performance pay based on objective measures like piece rate or commissions is considered the gender pay gap is reduced (Madden 2012). This finding indicates that other pay schemes based on subjective evaluation contribute to the gender bias. Cohen & Huffman (2007) can show that having female members in high status management positions lowers the gender wage gap among general employees. Elvira & Saporta (2001) can show that given same productivity blacks receive less favorable ratings from their supervisors than whites in a large US company. Racial wage differentials disappear when job allocation and subjective performance evaluation are controlled for (Elvira & Saporta 2001, 587). Among managers, it was found that supervisors were less likely to attribute performance to ability in case of female managers than in case of male managers (Greenhaus, Parasuraman & Wormley 1990). In a study by Igbaria

& Baroudi (1995) a gender bias in performance evaluation could not be found. On the other hand, there was a gender bias in the supervisors’ perception of chances for promotion, favoring men. This result is replicated by a meta-analysis in the study of Roth, Purvis & Bobko (2012).

An experiment conducted by Maas & Torres-Gonz´alez (2011) shows that women expect to be rated lower if the proportion of raters is predominantly male which corresponds to the finding from field research that women are less favorably evaluated the smaller the proportion of women is among the raters (Sackett, DuBois & Noe 1991). Bohnet, Bazerman & Geen (2012) suggest that joint evaluation of workers or applicants could overcome gender bias in subjective evaluations as it makes comparison, contrasting and calibration of evaluation easier.

These new findings corresponds to older views in the economic literature on internal labor markets. Doeringer & Piore (1985, 137-140) argue in the context of internal labor markets, that discriminatory practices at entry level are closely related to

1. the informality of the screening and recruitment process.

2. variations in the process due to changes in job nature.

6Token refers to persons in very clear minority position (less than 15 % of the whole population).

3. statistical nature of the screening process.

4. reliance on limited channels of recruitment.

All of these factors might impair women’s chances in comparison to men’s.

However, it has to be conceded, that some studies do not find clear gender effects in the evaluation of jobs (Grams & Schwab 1985, Graves & Powell 1995, Bowen, Swim & Jacobs 2000).

Also, in the context of more standardized ways of evaluation (and possibly affirmative action), race or gender effects of evaluation might be reduced (Powell & Butterfield 1997, 125).

Overall, the theoretical argument and the empirical research allow the conclusion that - given the same actual effort - a disadvantaged group will receive less favorable evaluations. They are considered as if they had spent less actual effort. Combined with the classical human capital theory approach of wage and labor market rewards determination this leads to the conclusion that a discriminated group will receive less labor market rewards for the same actual effort than the reference group.