In her best-selling book, Lean In, Sheryl Sandberg, chief operating officer at Facebook, suggests that in order to be as successful as men in the work-place, women need to be more aggressive; they need to "lean in" and "take a seat at the table".
This issue finds resonance in the context of the so-called gender gap; that women often get paid less than men for the same job and there are fewer women higher up in the hierarchy of organisations.
According to Sandberg, out of 195 independent countries in the world, only 17 are led by women. Women hold only 20 per cent of seats in parliament globally. A meagre 21 of Fortune 500 CEOs are women. In the US, women hold about 17 per cent of executive positions, 14 per cent of board seats and constitute only 18 per cent of elected congressional officials.
Some researchers have attributed this relative lack of success to the fact that women often shy away from confrontations. Researchers at Carnegie Mellon University asked graduating MBAs whether they had negotiated starting salaries. They found that only 7 per cent of women asked for a higher amount while 57 per cent of the men did so. This in turn meant starting salaries for men were about US$4,000 ($4,780) higher than for women.
Similar evidence of confrontation avoidance comes from evidence gathered by other social scientists. Two US researchers had university students solve math problems and initially paid them on the basis of each correct answer. At this point men and women performed equally well.
Then they were given a choice: they could choose a non-competitive payment scheme which pays a small amount for every correct answer; or they could choose to compete with someone else and be paid a larger amount if they did better than the other person. Given men and women are equally adept at the task, we would expect them to choose the two options in roughly equal proportions.
But a majority of men chose the competitive payment scheme; most women the non-competitive one. Furthermore, when people are arbitrarily assigned to a payment scheme and forced to compete, male performance remains unchanged, while female performance deteriorates.
How about male and female bosses? Do women adopt a more laid-back negotiating style compared to men? And is that more or less effective than confrontational ones?
With colleagues at the University of Auckland, I have concluded a lengthy study using student participants to study employer behaviour in economic decision-making games that simulate aspects of the workplace. All decisions are made using computers but in order to get people to treat this seriously we pay them non-trivial amounts of money on the basis of their decisions.
We implement two conditions. In one, the employer offers a wage to the worker and asks for a particular effort level. The worker is not bound to provide that effort. He can accept the wage and then shirk, if he chooses to. This shirking is costly for the employer in the sense that the employer loses money if the worker does not provide the effort asked for. Here then the provision of effort relies entirely on mutual trust and reciprocity between employers and workers.
In a second condition, however, the employer has the choice of investing in technology to monitor workers. If the employer chooses to intensively monitor the workers and the employer detects shirking then the employer can penalise the shirking worker.
If we assume workers are self-interested, they should do very little work when the employer has no recourse to a penalty. But in our set-up, when the opportunity to penalise workers exists, the employer can make sure the worker puts in the desired effort. Therefore, our second condition should generate higher earnings for the employer.
What do we find? We find that when it comes to mutual trust and reciprocity, there are no systematic differences between male and female employers and their earnings. But women are more reluctant to utilise the penalty option. But this in turn results in increased shirking on the part of the workers. The end-result is that female employers end up with lower earnings when they choose not to penalise workers.
Do most labour relations resemble ones based on mutual trust and reciprocity or do punishments for non-compliance play a significant role? Our evidence suggests that when it comes to jobs where performance and productivity may be harder to quantify thereby making mutual trust and reciprocity important in the relationship, female performance and earnings as employers will not be any worse than men.
However, in jobs where compliance may have to be induced via penalties, women's reluctance to "lean in" may potentially have an adverse impact on their earnings.
Does the behaviour of students tell us much about what might happen in the actual workplace?
Given they are poised to enter the workplace, I believe their behaviour provides reasonable clues to what they will do later. It also suggests there is a need for thinking and teaching about these differences and their implications, in our classrooms and in our homes, as educators and as parents.
• Ananish Chaudhuri is Professor of Experimental Economics at University of Auckland Business School.