Gender pay gap: call for transparency on university bonuses

Reporting regulations too ‘ambiguous’, allowing institutions to interpret them to their advantage, experts argue

April 17, 2018
man woman money

Universities must be more transparent in their bonus-awarding practices if higher education is to close its gender pay gap, campaigners say.

Along with salary data that revealed huge disparities between male and female earnings across the majority of universities, the UK government also required employers with more than 250 staff to disclose any gender gaps in bonus payouts, as well as the percentage of men and women who receive them.

A number of universities reveal a bonus gender pay gap of 100 per cent – but this may only account for one, or a very small number of individuals in senior positions being eligible for bonus awards.

Many of the institutions with a higher overall pay gap, in particular Russell Group members, show a bonus gap figure that suggests that a greater proportion of employees receive a cash bonus.

But campaigners have criticised the legal requirement on reporting bonuses as being too limited to draw conclusions from. In addition, there is little clarity as to how institutions have accounted for their bonus data: some may have included bonuses within salaries, or not at all, making the data incomparable at best.

Stefan Cross, legal patron of the Centre for Women, Equality and the Law at the University of Southampton, said that reporting bonus pay data separately from salaries could have the effect of reducing an institution’s overall pay gap on paper, “because bonuses are not usually included within average figures unless women are getting the same percentage bonus”.

“With many schemes it’s only higher-paid earners who are eligible for bonuses. The gender pay gap reporting methodology is actually minimising the problem,” he said.

A number of institutions award bonuses or rewards as a percentage of individual salary rather than a specific sum, meaning that senior men earning more than their female colleagues will automatically be awarded a larger sum of cash – a detail Mr Cross suggested widens the pay gap further.

At the University of Cambridge, for example, a higher proportion of women received bonuses over the past year compared with men, but payments made to female staff were lower on average. The university states in its pay gap report that “bonus payments are generally linked to salary and therefore affected by vertical segregation”, which it said “further highlight[s] the importance of tackling this”.

Further investigation into individual universities’ bonus-awarding policies suggests that, while many institutions claim not to have a formal scheme in place for bonuses, alternative “reward schemes” may be in place, if not always clearly outlined.

The University of Oxford – which has a mean bonus pay gap of 79 per cent in favour of men – says that it “does not operate a bonus scheme for staff”. However, its pay gap report states that it “operates a reward and recognition scheme for all staff in its main salary and grading structure, covering 11,844 employees”.

Keele University, meanwhile, has an “internal reward scheme” enabling one-off payments to be awarded to individuals “in recognition of exceptional performance” as nominated by managers. On this measure, the institution has a mean bonus pay gap of 3.5 per cent in favour of women but, once a second type of rewards awarded only to clinical academics by the NHS is included, the gap is 92.5 per cent in favour of men.

Francine Morris, lecturer in people management at the University of Salford, said the existence of bonus payments in the sector raises “wider questions about the marketisation of higher education and the appropriateness of HR-driven performance-related pay practices in institutions”.

“The second issue is about clarity,” she said. “Current bonus reporting regulations are ambiguous and appear to have been interpreted locally at the institutional level.”

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