University of Wisconsin–Milwaukee


Angela McManaman
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Jun 10, 2009 
2009 in review: Wage gap & customer bias
Finding unconscious biases Race-based perceptions of otherwise identical scenarios reveal non-conscious biases in customers that businesses may feel compelled to cater to.

Researchers have helped solve the mystery of why white men continue to earn 25 percent more than equally well-performing women and minorities. Managers and business owners must pay a premium for white male employees because customers prefer them, says David Hekman, assistant professor in the Sheldon B. Lubar School of Business at the University of Wisconsin–Milwaukee.

Hekman, the study’s lead author, recently completed a three-year research project to examine the degree to which consumers rely on personal biases when evaluating the quality of customer service they receive.

David Hekman David Hekman

The result (despite a sample size of more than 12,000 individuals from diverse backgrounds): one type of employee always comes out on top in anonymous customer surveys – the white male.

“Customers, from students buying textbooks to patients in an examining room, are consistently biased in favor of white men,” says Hekman, the study’s lead author. “Because customer satisfaction is critical for organizational survival, business owners and managers will hire white men when possible and will pay lower salaries to the women and minorities they do hire.”

In one of the study’s experiments, researchers showed 100 college students a video featuring either a black male, a white female or a white male actor playing the role of an employee in a bookstore who is assisting a customer. Those viewing the white male not only reported being 19 percent more satisfied with the employee's performance, but they also were more satisfied with the store’s cleanliness and appearance. This despite the fact that the three employees demonstrated the same scripted behaviors and the store background, camera angles and lighting were identical. The sample was diverse, as well: 46 percent of the students were women and 41 percent were minorities.

“It appears that most everybody feels like they are getting a better deal when they are served by a white man,” says Hekman.

These findings were also borne out through more than 10,000 medical patients’ ratings of their doctors. Patients who received an e-mail from their doctor were more satisfied with their doctor’s competence and approachability, but only if the doctor was a white man. Physicians in the study who were women and/or minorities fared worse in customer evaluations.

“The more questions physicians in these groups asked their patients, the more follow-up they provided after the appointment via e-mail, the worse their evaluations were,” says Hekman. “It almost seemed that the harder these physicians tried to provide high-quality care, the more incompetent patients felt the female and minority physicians were.”

Non-conscious biases

In both cases, Hekman stresses, the booksellers and physicians provided near-identical levels of customer service. That white men consistently received more favorable ratings, he says, can best be explained by non-conscious biases among the research participants who completed the evaluation.

“It can be tempting to think that racism and sexism do not exist, or that they are not as powerful forces, especially in light of the election of an African-American president,” says Hekman. “This study further confirms that these forces are out there – and that for the more than 60 percent of employees who have at least some of their pay directly linked to customer satisfaction survey results, they remain a huge problem.”

The findings also reveal some potentially devastating, unintended consequences of the Paycheck Fairness Act (H.R. 12 and S. 182), introduced in 2009 to narrow the wage gap and now awaiting action by the U.S. Senate.

“Because customers prefer white men employees, even when women and minorities perform equally well, there is a real danger that increasing women’s wages so that they are equal to those of white men may cause managers to hire fewer women,” Hekman explains.

“We’re not saying that it’s rational for businesses to only hire one type of employee because that’s what customers prefer, or to pay them more than women or minorities,” adds Hekman. “What we’re saying is that it’s irrational to continue tying employee pay to anonymous evaluations that reflect consumers’ preferences for white men, thereby perpetuating the wage gap.”

The researchers say the Paycheck Fairness Act could be more effective if it also addressed ways to reduce the link between biased customer opinions and employee pay. They also offered straightforward policy suggestions in an upcoming article about the study in the Academy of Management Journal. Among them: Make sure customer satisfaction surveys target specific employee behaviors. For example, don’t ask customers if they would recommend a physician; ask them how many times the doctor asked a patient if she had additional questions or understood key medical terms. 

No more anonymous surveys

No more anonymous customer feedback surveys, either, says the team.

“Make sure customers are identifiable and therefore at least somewhat accountable when they provide ratings,” says Hekman. “People may do all sorts of bad things when they are anonymous – just check out the reader postings on any blog.”

The study has been presented internationally at academic conferences and has been profiled in the science blogs of leading periodicals like The Washington Post, The New Republic and The Chicago Tribune.

Hekman says research data and media interest won’t be enough to combat the problem, and he’s hoping for more grass-roots interest.

“It’s a problem that needs to be talked about – non-conscious biases need to be revealed and acknowledged,” he says. “They affect societal health and represent a major organizational disease for many businesses. Any disease needs to be diagnosed – that’s the first step to getting rid of it.”

Other members of the research team were: Karl Aquino of the Sauder School of Business, University of British Columbia; Bradley P. Owens of theCenter for Positive Organizational Scholarship, Ross School of Business at the University of Michigan; Terence R. Mitchell of the Foster School of Business at the University of Washington; and Pauline Schilpzand and Keith Leavitt of the Army Center of Excellence for the Professional Military Ethic, U.S. Military Academy at West Point.

To read the full study, visit http://www.sba.uwm.edu/Hekman_D/racefinal.pdf

 
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