On the surface, performance-related pay seems inherently fair and equitable, but accusations have long suggested that such approaches can exacerbate gender pay differences in the workplace due to men supposedly responding better to such schemes than women.

A recent study from Carnegie Mellon suggests that things might not be so straightforward.  The researchers evaluated a number of studies from around the world and found that there weren’t really any gender differences in response to performance-related incentives.

“Performance pay is at the core of management practices in many industries, and the effectiveness of performance incentives has therefore been tested in many experiments,” the researchers say. “We draw from this wealth of data to answer a new question—whether men and women respond differently to performance pay—by using a model that allows us to aggregate this data and estimate the average gender difference as well as how much this difference varies across studies.”

Performance pay

The researchers assessed 17 experiments in total split between the lab and the field, with around 8,800 participants involved.  The experiments covered a wide range of different incentive schemes and workplace tasks, with participants spread across a diverse range of countries.

In the past, the researchers say that men and women have been believed to differ in terms of their confidence, tolerance for risk, and altruism.  These factors tend to make performance-related pay more beneficial to men than to women.  It’s a finding that the literature review confounds as men and women appeared to respond similarly across each of the variants in circumstance.

The authors argue that this shows that the psychological disparities between genders are not sufficient to result in a meaningful difference in response to performance incentives.  What’s more, the research found no detrimental effect of performance pay on productivity for either men or women, with pay incentives actually corresponding with a boost in performance on average.

“Our results suggest that performance pay is highly effective at increasing productivity on average,” the researchers conclude. “What’s more, because we did not find that women respond less strongly to performance incentives, the ubiquity of performance pay is unlikely contributing directly to the gender earnings gap.”