Sexual Discrimination in the Work Force

Sex Discrimination in the Workplace

Salomon Smith Barney is one of the world's largest financial brokerage groups, with headquarters in New York City and 500 offices serving more than 100 countries around the world. Recent studies indicate that the financial industry as a whole continues many practices that are discriminatory to women, such as unequal pay as well and discriminatory hiring and promotion practices. This paper examines whether a gender gap in pay and promotion does exist within Salomon Smith Barney and the issues these practices raise from a human resources standpoint. It looks at the deleterious effects these practices could have, both in terms of lawsuits, negative publicity and market/employment competitiveness. Finally, the paper makes recommendations on how the human resources department could help Salomon Smith Barney avoid clams based on sex discrimination in the future.

Studies comparing the salaries of men and women show a dramatic disparity in the salaries of men and women. Despite pay equity laws and a growing awareness of gender discrimination and women's rights, this "gender wage gap" continue to exist between men and women across a broad range of occupations. Data from the Bureau of Labor Statistics shows that on average, women earn only 78 cents for every dollar earned by a male employee (BLS 2000).

This figure, however, is even lower in the financial services industry, where in 2000, women earn only 68 cents compared to their male counterparts. No company in the financial industry - Salomon Smith Barney included - pays their female employees on the same scale as men. In fact, the 2000 figure represents a step back from 1995 levels, when women in the finance industry were paid 78 cents for every dollar paid to male employees (cited in Mollison 2002).

Furthermore, studies have also found that companies in the financial industry Salomon Smith Barney also has several unspoken practices that could be legally construed as discriminatory to female employees. For example, female brokers complained that they were not being given their fair share of new accounts and referrals. They were excluded from important meetings, which were held in social setting such as male-only business lunches and golf outings. Other meetings have been held with female strippers being hired as "entertainment" (Antilla 2002).

From a human resources standpoint, these practices touch on several issues that concern sex and gender-based discrimination. Such discriminatory practices negatively affect Salomon Smith Barney in a number of ways.

First, such practices make it difficult to attract and retain quality female employees who could contribute greatly to Salomon Smith Barney's fiscal profits. After all, an increasing number of employees who attend business school and enter the financial world are women.

Second, the perceptions of being a discriminatory company have hurt Salomon Smith Barney and other companies like Wal-Mart in the past. The negative publicity resulted in picketing and boycotts of several Wal-Marts around the country and made these companies the targets of campaigns by groups such as the National Organization for Women.

Finally, such discriminatory practices have also resulted in lawsuits from the United States Equal Employment Opportunity Commission (EEOC). The sex-discrimination lawsuit against Rent-a-Center, for example, resulted in a landmark $47 million settlement for 5,000 female employees whose jobs were unfairly terminated (EEOC 2002).

In 1997, Salomon Smith Barney itself settled a sex-discrimination lawsuit, paying an undisclosed amount to female employees who filed a class action suit before the EEOC (Knox 2000).

The human resources department could help prevent the problems of negative publicity and expensive litigation and settlements through a three-fold strategy. This involves, ensuring that the company complies with state and federal anti-discrimination statutes, reviewing the company's wage-setting practices and through training and education campaigns aimed at increasing diversity and gender sensitivity.

In 1998, Salomon Smith Barney agreed to set aside $15 million to enact policy changes aimed at making the company a more hospitable environment for women. This money could go a long way towards ensuring that the company complies with anti-discrimination statutes. For example, rival firm Merrill Lynch, formerly a target of sex-discrimination lawsuits, has instituted on-site childcare centers and generous maternity leave programs, aimed at attracting and retaining women employees. As a result, Merrill Lynch is now rated as one of the top companies for working mothers (Knox 2000).

These programs have also helped to ensure that Merrill Lynch complies with anti-discrimination laws like Title VII of the Civil Rights Act of 1964 and the Pregnancy Discrimination Act of 1978.

In the same way, Salomon Smith Barney should devote a portion of the agreed settlement toward similar facilities for working mothers. The money could also be used to hire temporary workers, allowing more employees - male and female -- to take advantage of newer laws like the 1996 Family and Medical Leave Act.

Many job evaluation systems implicitly favor men. This is partly because men are less likely to take time off for reasons such as maternity or childcare. Also, Wall Street and the financial industry have also traditionally been male enclaves. As a result, one analyst observed, the current male bosses tend to promote "people they are more comfortable with" (Knox 2000).