Not just a formality: Pay system formalization and sex-related earnings effects

Marta M. Elvira, Mary E. Graham

Research output: Contribution to journalArticlepeer-review

134 Scopus citations


Drawing on neoclassical economic, internal labor market, and devaluation theories, we examine how the sex composition of jobs and the sex of individual workers affect earnings, depending upon the formalization of the pay type. Using personnel data for over 8,000 employees, we confirm the existence of a negative relationship between earnings and the proportion female in a job. We also find that for less-formalized pay types (cash incentive bonuses), sex-composition and individual-sex effects are larger than for more formalized pay (merit raises and base salary). Together, these findings support devaluation explanations, suggest that incentive bonuses may widen the earnings gap between women and men, and have implications for the design of pay structures in organizations.

Original languageEnglish (US)
Pages (from-to)601-617
Number of pages17
JournalOrganization Science
Issue number6
StatePublished - 2002
Externally publishedYes


  • Incentive Bonuses
  • Pay Formalization
  • Sex Composition

ASJC Scopus subject areas

  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation


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