Does whom you work with matter? Effects of referent group gender and age composition on managers' compensation

Much research has examined gender and age effects on compensation, concluding that a wage gap exists favoring men and negative stereotypes against older workers persist. Although the effect of an employee's gender or age has been widely studied, little work has examined the impact of the demographic characteristics of a focal employee's immediate referent groups (e.g., subordinates, peers, or supervisors) on pay. The effect of the gender and age composition of a focal manager's subordinates, peers, and supervisor on the manager's compensation levels was investigated in a sample of 2,178 managers across a wide range of organizations and functional areas. After controlling for a number of human capital variables, results indicated that not only does a wage gap favoring men exist, but also managerial pay is lower when managers' referent groups are largely female, when subordinates are outside the prime age group, and when peers and supervisors are younger.