Gender pay gap is a concerning issue in the corporate world. This refers to the average wage gap between working men and women [8]. The female employees are often paid less than the male counterparts while working in the same job profile. The pay gaps can be attributed to two factors, adjusted and unadjusted wage gap. In the adjusted pay gap, the employers tend to include aspects like number of working house, time taken off, occupations chosen in the past, education and work experience and based on these, a lower remuneration is considered for the female employees [11]. Gender pay gap is the major reason behind the lower annual income of the women. Although this tendency has reduced, but it still exists to some extent in the corporate houses, despite their size and reputation. BBC was convicted for promoting gender pay gap. Along with that, it was also convicted for not maintaining transparency in its reports and false claiming that it advocates equal pay among the workers. This burning issue was revealed in 2017 publication of BBC containing the list of highest earning presenters, among which all were male. This report will highlight the critical evaluation of the gender pay gap issue and reward management practices in BBC and based on that, it will also provide recommendations to solve the salary debacle in the organization.
BBC, the British Broadcasting Corporation, is a public service broadcasting house in the UK. It holds the position of the oldest national broadcasting house in the world, established in 1922 [12]. It has expanded its network globally and has more than 20000 employees across all the news centers around the world. It is one of the most prestigious media houses in the world. The controversy of gender pay gap in BBC was started in July 2017, when it published the list of employees with annual income of more than £150,000 on the demand by the UK government. 96 employees crossed this threshold and the significant finding was that only 34 female employees earned this income, while 62 male employees were on the list. This publication sparked the fire, and BBC was criticized for their false claim of maintaining equality while they were practicing gender pay gap secretly [3]. To handle the issue, BBC announced that the male workers could face a pay cut to bring in parity in the pay. In October 2017, the company published a gender pay gap report, which revealed there is 9.3% median gender pay gap in the company [5]. In January 2018, Carrie Gracie resigned from her post of China editor citing gender pay gap as the reason. She stated that two other international male editors were earning at least 50% more than two other female counterparts and she refused to collude with unfair pay for the women.
According to the BBC Gender Pay Gap Report 2018, the company has illustrated the difference between the equal pay and gender pay gap. As per the Equal Pay Act of 1970, paying different salaries to men and women workers for doing the same work is illegal, unless there are some genuine material factors contributing in the difference [5]. On the other hand, gender pay gap represents the difference between the gross hourly pay of the men and women workers, expressed on a mean and median basis. Thus, fair pay principle and the legislation regarding equal pay are violated by the gender pay gap practice [7].
After the list of employees with more than £150,000 annual pay was published, the issue of gender pay gap was highlighted and with the resignation of Carrie Gracie, BBC was all the more critiqued for its pay policies and lack of transparency. BBC pledged to achieve equality in payment for the men and women on air workers by 2020 and in that attempt, it said that some of its male employees could face a pay cut [1]. However, the female employees signed an open letter to correct the disparity immediately. It was stated that BBC misused the faith of the employees and other stakeholders by not only establishing a gender discrimination regarding the salary structure, but also by lying to the female employees that they are paid equal to their male counterpart and thereby belittling them.
On the contrary, PwC published a report in 2018 that stated that in BBC, there was no gender bias in terms of pay decisions below the senior management level [2]. This report highlighted that the pay gap in the corporation was 6.8%, lower than the 9.3% mentioned in the BBC report. They collected the data from 824 employees working in different departments and found that although the gender pay gap is much lower, BBC pay arrangements lack continuous evaluation and governance framework. Due to this, the pay arrangements lacked rigor historically and resulted in the anomaly for both the men and women. Hence, according to that report, gender bias was not the reason for unequal pay, rather the fault in the approach for setting the payments was the reason behind this issue [4].
To handle the issue, BBC published another gender gap report in 2018 that highlighted that there was 9.3% gender gap in 2017, while that was reduced to 7.6% in 2018 [5]. It also highlighted the national gender pay gap was 18.4%. According to BBC, they had taken various initiatives that addressed particular pay issues, introduced simpler job framework, and repositioning of the people within the specific pay ranges. Another problem was highlighted that, there were too few women in the senior management, leadership and top positions in the company and more female workers in the lower quartile of the total workforce, and these structural reasons caused 7.1% of the median gender pay gap, while the other residual pay gap was only 0.5% [5].
Pay structure in any company is dependent of the performance and reward management systems. Reward management consists the aspects of employee engagement, type of reward systems, strategic alignment, related trade offs, remuneration and compensation system and policies, minimum wage and other reward related practices [10]. The company needs to evaluate the employee engagement, other related trade offs, and achievement of the strategic goals through performance management systems and decide on the rewards accordingly. BBC and all other organisations has the reward strategies to develop and implementing reward practices, policies and the procedures enabling it to achieve its goals further.
Reward policies of BBC aimed to address the following issues:
The organization has failed to implement the equal and fair pay for the employees and also did not follow transparency policies in giving the information to the employees. Rather, it followed gender discrimination in their payment structure.
Performance management and appraisal policies are crucial part of the reward management system. In the performance management, the managers and the employees plan, monitor and review the employee’s performance, that is, overall contribution in the organization over the monitoring period [9]. Specific KRAs (Key Responsibility Areas) are developed to measure the contribution of the employees. Based on the performance review report, appraisals are done and the bases for the rewards are the profits sharing, bonuses, and incentives. Thus, achievement of the KRAs influences the performance and reward management in a significant way [13]. BBC follows these rules but it also maintained the gender discrimination in its policies secretly. Rather than implementing fair and equal pay, BBC kept on paying more to their male employees compared to their female counterpart. Carrie Gracie also accused that BBC lied to her about the pay structure while sending her to China as editor [1]. Thus, BBC also did not maintain transparency in communication and policies.
From the Gender Pay Gap Report 2018 by BBC, it is found that after it announced its commitment to achieve equal pay by 2020, the company implemented few reforms [5]. Those reforms are:
Apart from these, BBC also planned to make the career progress path quicker for women employees and 50:50 ratio of male to female employees should be achieved in all positions by 2020.
With these reformed policies, BBC was able to reduce the gender pay gap by 2% in one year, from 9.3% to 7.6%. In 2018, the gender split is 45.2% female and 54.8% male, which the company wants to make 50:50 by 2020. Along with the gender pay gap, BBC also focused on reducing the pay gap for the BAME (Black, Asian, and Minority Ethnic), disabled employees and full-time versus part time employees, all of which was significantly reduced after implementation of the reformed policies [5].
Effectiveness of reward management can be evaluated by applying the following methods. By doing external market survey, staff attitude survey, benchmarking of the reward in comparison to the industry, internal data analysis and reviews on equal pay, the effectiveness of reward management can be assessed [14]. These methods involve various stakeholders, who can give an opinion about the improvement in situation originated from reward management measures implemented by the company. Sweins, Kalmi and Hulkko-Nyman described five criteria that indicate the reward management effectiveness. Those are, financial impact, external benchmarking of the reward system, stakeholder views, HR outcomes, that is, labor turnover, and business outcome and customer service [15]. Thus, it can be said that after the implementation of the reformed policies in BBC, there has been increase in the number of female employees, which is one step closer to achieve the goal of making the gender ratio 50:50 by 2020. It also brought improvements in the gender pay gap within the industry that had a gap of 18.4%. This had a positive impact on the stakeholder views of BBC leading to better business outcome. BBC had improved the gender bonus pay gap, in which the company ensured that the bonus in the form of cash and voucher payments are given to both the men and women employees fairly and equally. In 2018, the median gender bonus gap was 0%, while the mean was 2.5% and 10.4% men and 10.8% women received a bonus [5].
In addition to conventional reward management system, BBC also released an assurance statement regarding the salary disclosure issue. This is a support measure to gain back the trust of the employees and other stakeholders. This is also aimed at increasing the effectiveness of reward management at the BBC. This statement was based on the study of reward system in BBC, conducted by Ernst & Young LLP, London. The firm concluded that BBC has truthfully revealed the payment and reward information of the employees and there was no element that could hide any significant information regarding the pay gap.
Review of the gender pay gap report of BBC and other theories on reward and performance management has led to some issues and recommendations are provided below to address those issues.
Conclusion
BBC is one of the most reputed media house in the world. It claimed to have the highest quality employee payment and welfare schemes. However, in 2017, it was revealed that the media house has been practicing gender discrimination regarding payments and rewards since long and thereby cheating the female employees with false claims of equity and much lower pay than their male counterparts. After this scam, the company was forced to revise their reward management policies to eliminate the gender pay gap by 2020. The evaluation of the reward management systems revealed that it did not follow the proper ethics and methods to establish a fair payment system. After the scam, the policies were reformed to eliminate the gender discrimination. BBC should implement structural changes, that is, promote more women in the top positions. It should also provide childcare facilities for improving productivity of the working mothers; transparency, honesty and ethics should be maintained in policies, publications, and actions; and freelancers’ payments should be tracked systematically to create an overall positive impact on the gender pay gap and salary disclosure debacle.
References
1 Ruddick G. Trust is broken at BBC over equal pay, Carrie Gracie tells MPs. the Guardian. 2018. https://www.theguardian.com/media/2018/jan/31/bbc-in-real-trouble-over-equal-pay-carrie-gracie-tells-mps (accessed 29 Sep 2018).
2 BBC News. ‘No gender bias’ says BBC pay review. BBC News. January 2018. https://www.bbc.com/news/entertainment-arts-42872363 (accessed 29 Sep 2018).
3 BBC News. How the BBC gender pay story has unfolded. BBC News. June 2018. https://www.bbc.com/news/entertainment-arts-42833551 (accessed 29 Sep 2018).
4 www.pwc.co.uk. On-air review | British Broadcasting Corporation. PwC 2018.
5 BBC. Statutory Gender Pay Gap Report 2018. BBC News 2018.
6 Belogolovsky E, Bamberger P. Signaling in Secret: Pay for Performance and the Incentive and Sorting Effects of Pay Secrecy. Academy of Management Journal 2014; 57:1706-1733. doi:10.5465/amj.2012.0937
7 Smith M, Gribling M. I can see clearly now: ‘pay secrecy’ fades as more transparency becomes the norm. The Conversation. 2018. https://theconversation.com/i-can-see-clearly-now-pay-secrecy-fades-as-more-transparency-becomes-the-norm-95962 (accessed 29 Sep 2018).
8 Fulmer IS, Chen Y. How communication affects employee knowledge of and reactions to compensation systems. InMeeting the challenge of human resource management: A communication perspective 2014 Jul 11 (pp. 167-178). New York: Routledge/Taylor & Francis.
9 Bustamam FL, Teng SS, Abdullah FZ. Reward management and job satisfaction among frontline employees in hotel industry in Malaysia. Procedia-Social and Behavioral Sciences. 2014 Aug 20;144:392-402.
10 Speiser ML, Speiser L, inventors; Yahoo! Inc, assignee. Automated reward management for network-based contests. United States patent US 8,224,696. 2012 Jul 17.
11 Jones L. What is the gender pay gap? BBC News. February 2018. https://www.bbc.com/news/business-42918951 (accessed 29 Sep 2018).
12 Hajkowski T. The BBC and national identity in Britain, 1922–53. 2013.
13 Scott KD, Sperling RS, McMullen T, Bowbin B. A study on reward communications: Methods for improvement of employee understanding. WorldatWork Journal. 2007;17(3).
14 Shields J, Scott D, Sperling R, Higgins T. Rewards communication in Australia and the United States: A survey of policies and programs. Compensation & Benefits Review. 2009 Nov;41(6):14-26.
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