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The Positives and Negatives of Using Quotas

The Positives and Negatives of Using Quotas to Increase the Number of Female Employees in Executive Positions at Large Companies

Organizations are working towards attaining gender diversity; however, the progress is slow. According to the 2020 Fortune 500 list, out of 500 Chief Executive Officers, only 6 percent are women. Men have a higher probability of holding higher office positions are compared to women. The statistics have stagnated for over three decades despite increasing efforts to remedy this disparity. Most employers lean towards contracting and hiring men as opposed to women with similar qualifications and experiences. The gender wage gap also persists in various industries. Although many companies have developed gender blind practices, there are still challenges growing the gender diversity gap in various workplaces (BDA: Gender Quota, 2015). Employers should introduce systems and structures that focus on workers' and job candidates' objective merit to overcome discrimination based on implicit or explicit biases. Although there are strict gender equality policies that have been put in place, for example, two-thirds and a third policy to fill in underrepresented minorities without setting rigid quotas, the dogma has failed to disentangle the primary challenge of female representation. Many companies are taking sluggish steps towards gender equality. However, some organizations and decision-makers bear in mind the probability of implementing quotas, principally at the board directors' level, to achieve gender parity. Quotas can be a solution to achieve gender equality in organizational positions. However, the policing of quotas has been increasingly resisted by many companies as it is surrounded by numerous controversies about their expected outcomes besides their potential pitfall. The paper will discuss the possible positives and negatives of using quotas to increase female employees' number in executive positions at large companies.

There are various reasons why quotas could work. First, the fears of quotas have not yet been realized. A recent interview for 100 board members in the United States of America and China suggested hospitality towards quotas in nationalities that have adopted the policy. The survey also postulates enthusiasm for quotas in nationalities that have not yet adopted the guiding principle. In essence, only the companies that have not adopted the dogma have a bad attitude towards it. While these companies strongly opposed quotas, once the policy was gazette by authorities, the boards changed their minds. According to these companies, their fears were unfounded, and after the transition, they acknowledged the significance of increasing the representation of women on boards. They accredited that women are governors and decision-makers.

Secondly, quotas are not associated with any pipeline problem. The initial issue about implementing the quotas dogma is where to find qualified women to fit in the higher organization positions. A recent survey suggested that men endorsed the prevailing imbalance in the candidate pool (The Israeli Catalyst Report, 2014). On the other hand, women expounded the concern as a function of conventional closed men biases and networks. While there are some nationalities such as Norway, there is a golden skirt effect where women hold many high organizational positions, including boards of directors. The implementation of quotas in such countries has led boards to hire expansively and creatively, thus increasing the candidate pool.

Thirdly, quotas are associated with no stigma. Women beneficiaries of quotas in many organizations express stigmatization feelings. In some nationalities, women achieve a critical mass on signboards. For example, in Norway, women have a 40 percent representation; therefore, the group is no longer marginalized. Hiring many women on boards is a means for counteracting the notion of possible negative stigma. Adding few women to organizations' boards leads to de-legitimization and tokenization (Gender parity on boards around the world, Institutional Shareholder Services, 2018).

Quotas have a positive effect on organizational success. Asserting a significant mass of women on boards leads to numerous merits regarding board governance. It leads to more effective risk management, robust deliberation, enhances good thinking, enhances systematic working, and higher quality monitoring of management. Management scholars suggest that women on boards bring more diverse experience in various organizational functions than men (Gender diversity on boards improves, but more grounds need to be covered, 2018). Women more often add skills and expertise in human resources, marketing, and government relations that most men lack. Women often introduce new policies and standpoints that have not yet been hitherto considered.

Quotas are also attributed to some shortcomings in the organizational paradigm. Quotas are regarded as illegal, and they are alleged to be unjust. Organizational scholars suggest that quotas violate legislation in some jurisdictions—for instance, the United States of America's constitutional law insurmountable obstacles to implementing a quota-based regime. Most organizations view quotas as a violation of justice perceptions, even where they are legal. Although the quota-based policy is a tool that promotes gender equality at the societal level, it is perceived as unfair by many individuals and companies. From a psychological viewpoint, a gain of one group (in this scenario, women) is alleged to be a loss for the other group (in this setting, men), therefore, causing men to perceive the quota-based program as unfair (DW: Germany to close the pay gap with transparent wage structures, 2015).

Quotas reduce employee engagement. The discernments of injustice can initiate destructive costs. Organizations that advocate quotas might become less attractive to male job candidates. Moreover, the injustice perception might lead men to become less supportive of diversity policies than they were before adopting the quota-based systems (Other public companies having a paid-up share capital of INR 1 billion (100 crores) or more, or turnover of INR 3 billion (300 crores) or more, 2013). On the other hand, quotas may cause low engagement of male employees besides developing negative job attitudes.

In conclusion, the introduction of gender quotas in many states has increased women's representation (minority group) on boards. The introduction of women on boards has added more value in organizations as they are attributed to many positive economic performance variables. Many large proportions of women board members are independent and do not make biased decisions. Today, many organizations have adopted quotas since they value women's productivity as they make valuable contributions to companies and governments' critical decision-making. In essence, a quota-based framework is a tool that enhances gender diversity in various institutions.

References

"Gender diversity on boards improves, but more grounds need to be covered," in The Economic Times, 19 Feb. 2018, https://economictimes. indiatimes.com/news/company/corporate-trends/gender-diversity-on-boards-improves-but-more-ground-needs-to-be-covered-experts/ articles how/62988324.cms [accessed 7 Apr. 2021)

"Gender parity on boards around the world, Institutional Shareholder Services," in Harvard Law School Forum on Corporate Governance, 7 Jan. 2017, https://corpgov.law.harvard.edu/2017/01/05/gender-parity-on-boards-around-the-world/ [accessed 7 Apr. 2021].

BDA: Gender Quota: Right Goal, Wrong Way – Opinion on the Draft Government Bill on "Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector." 28 Jan. 2015, https://www.arbeitgeber.de/www/arbeitgeber.nsf/res/Stn-Frauenquote.pdf/$- file/Stn-Frauenquote.pdf [accessed 7 Apr. 2021].

DW: Germany to close the pay gap with transparent wage structures, 10 Dec. 2015. https://www.dw.com/en/germany-to-close-pay-gap-withtransparent-wage-structures/a-18910554 [accessed 7 Apr. 2021].

 Other public companies having a paid-up share capital of INR 1 billion (100 crores) or more, or turnover of INR 3 billion (300 crores) or more. Source: The Institute of Company Secretaries of India, 2013. 48 Deloitte: "Women in the boardroom: A global perspective," 2019, https://www2.deloitte.com/global/en/pages/risk/articles/women-in-the-boardroom-global-perspective.html [accessed 7 Apr. 2021].

The Israeli Catalyst Report: Women leading business, Mar. 2014. https://www.strauss-group.com/wp-content/blogs.dir/3/files/sites/3/Israel-Catalyst-Census-TLV-100-2013_Final.pdf [accessed 7 Apr. 2021].

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