Speaking to InvestorDaily, FSU national assistant secretary Geoff Derrick said while performance-based pay is commonplace within the industry, it can actually serve to widen the gender pay gap rather than increase performance.
“The gender pay gap is wide and growing in Australia and it is widest and growing fastest in the finance sector,” Mr Derrick said.
“When performance pay systems are developed they usually bring with them a number of inherent biases.”
Mr Derrick said performance-based pay systems have a particular 'affinity' with managers rather than with non-managers, which can disproportionately affect women.
“Managers have a higher performance pay outcome than non-managers even on a percentage basis...and yet managers are disproportionately men not women, so that [adds] to the gender pay imbalance,” Mr Derrick said.
“Then there is the other inherent imbalance in that we regularly see a bias towards sales roles compared to service roles.”
“And yet the gender segmentation of work in this industry sees more men in sales and more women in service.”
Mr Derrick said while there is a place for performance-based bonuses, the FSU does not agree that salary should be determined using the same system.
“In this industry, almost everyone has proportionate performance-based pay,” Mr Derrick said.
“If someone doesn’t have the capacity to influence the final outcome, linking their pay to that final outcome is just silly.
“Even for people who do have the capacity to influence final outcome, there is plenty of evidence that relying heavily on performance-based pay models as an incentive for better performance doesn’t work.”
