Author: Jill Young Miller

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About Jill Young Miller

As research translator for WashU Olin Business School, my job is to highlight professors’ research by “translating” their work into stories. Before coming to Olin, I was a communications specialist at WashU’s Brown School. My background is mostly in newspapers including as a journalist for Missouri Lawyers Media, the Atlanta Journal-Constitution, The Washington Post and the Sun-Sentinel in South Florida.


As companies trim their hierarchies and form teams of employees to manage themselves, WashU Olin researchers are sounding warning bells. 

Inequity “is likely to be a significant problem”—especially for women, who made one-fourth less than their male counterparts in a new study of self-managed teams.

Lamar Pierce

Women “consistently receive bargaining outcomes below their productivity level, while men are consistently overcompensated,” Olin’s Lamar Pierce and Dennis J. Zhang, with Laura Wang of the University of Illinois, write in “Peer Bargaining and Productivity in Teams: Gender and the Inequitable Division of Pay.” The paper is forthcoming at Manufacturing & Service Operations Management. 

Zappos, Google, Facebook and others have adopted them. The teams are meant to boost productivity, offer flexibility, attract young people and foster creativity. Ideally, they allocate tasks based on employees’ strengths and then assign rewards—equitably—based on their contributions.

But how well do the teams actually work?

Dennis Zhang
Dennis J. Zhang

“Inherently, they aren’t as awesome as people think,” said Pierce, professor of organization and strategy and associate dean of the Olin-Brookings Partnership. (Zhang, professor of operations and manufacturing management, was in Beijing and unavailable for an interview.)

Finding: Women were paid 24% less than men

For 50 months, Pierce, Zhang and Wang studied productivity and bargaining traits in a service operation setting: a chain of 32 large beauty salons with 932 workers in China. About half (54%) of the workers were men. 

They found that the men consistently extracted “advantageous bargaining values from their female coworkers, despite having no observable productivity advantage.”

In fact, women in the sample earned at least 24% less than their equally productive male counterparts. 

That gender pay gap is larger than the pay gaps found in places with hierarchical management structures. A 2005 study found a gap of 10% in Asia and larger inequities in the United States and Europe.

The new evidence on self-managed teams has implications for US organizations.

“You see these dynamics playing out in Silicon Valley all the time. You see them playing out in academia,” Pierce said. 

“Social interactions between men and women have consistencies across culture, across economic class, across age,” he said. “Show me the culture where women don’t tend to get worse negotiation or bargaining outcomes.”

‘Stuck with a bunch of overpaid men’

A combination of higher “prosociality” and lower bargaining power in women most likely explains the 24% wage disparity, the researchers report. Prosocial behavior includes feeling concern for others and acting to benefit them. 

When the workers divided their own team-based compensation, women were severely underpaid for their productivity. Consider this: Women were the top salespeople in the beauty salons, and those women took home only the median wage.

“This is really bad because they’re going to leave, and when they leave then (the company is) going to be stuck with a bunch of overpaid men,” Pierce said.

The researchers compiled data from three sources between April 2009 and May 2013: Point-of-sale from each salon, which included every service and card-for-service transaction; the internal human resource system that included the commission paid to each worker for each transaction; and detailed demographic information of each worker in those transactions.

They found that gender “strongly predicts” under- or overcompensation relative to productivity. Men made up a disproportionate number of highly paid yet unproductive workers. Women overrepresented “star employees” with poor bargaining outcomes.

The researchers used a previously proven algorithm to confirm gender as the strongest predictor of bargaining outcomes.

Out of sight, out of mind

Pierce emphasized that self-managed teams can work well—with clear guidelines in place. The study highlights how important it is to monitor and enforce pay equity in self-managed teams. After all, those teams assign tasks, responsibilities and rewards for teammates.

“Because this design decision effectively puts inequity ‘out of sight for the manager,’ it may also put this inequity ‘out of mind,’” the researchers write. But that doesn’t abdicate a manager’s responsibility to stem bias and discrimination. One solution is to set up formal rules for the assignments of tasks and rewards, the findings suggest. 

“Do you have safeguards in place to ensure that the person who gets all the credit, who gets the rewards, who gets the best task is not simply the one who bargains the best or bargains the most aggressively?” Pierce asked. 

The research findings also imply that firms could cut costs by replacing overpaid workers. And the findings show that good workers who are underpaid lose motivation—and often leave.

“Managers must anticipate and mitigate this gender-based inequity,” the researchers write. That’s because it is an operational performance issue. And “because of the myriad of productivity, retention and ethical implications that can result from peer-based bargaining.”




As President Trump plans to slap steep tariffs on $300 billion in Chinese imports, a uniquely American tradition could come under fire: Fourth of July fireworks.

John Horn

John Horn, a WashU Olin international trade expert, predicts fireworks will light the skies next month because cities and towns placed their orders months ago. But the next Fourth?

“The skies could be empty,” Horn said. That is, if the proposed tariffs are imposed and continue into 2020. China’s likely strategy will be to use fireworks as a “political toy” heading into the election season, Horn says.

How? By completely banning sales of fireworks to the United States, he says.

Horn is a professor of practice in economics who helps companies develop competitive strategies and who leads war game workshops.

The United States hasn’t yet imposed tariffs on fireworks, but fireworks are on a long list of products facing a 25 percent penalty if China doesn’t make a broader trade agreement with the White House soon.

An uproar before the election

To retaliate over US-imposed tariffs, Chinese President Xi Jinping could ban shipments of fireworks to the United States next year to create an uproar before the presidential election, Horn says.

“I wouldn’t be surprised. ‘Oh, you know what? We’re having a shortage of the necessary chemicals, and we need it for other purposes, and we just can’t export it to the United States this year,’” Horn said. “It’s sort of like [Xi] has threatened with rare-earth metals.” 

Manufacturers use those metals as components in smartphones, cameras, flat-screen TVs and a lot of other things, including defense technologies. China dominates the world as the metals’ supplier.

China is the dominant maker of fireworks, too. Last year, the United States imported 277 million pounds of fireworks from China, representing 99 percent of backyard fireworks and 75 percent of professional display fireworks, according to the American Pyrotechnics Association.

Julie Heckman, APA executive director, plans to testify today before US Trade Representative Robert Lighthizer and to request an exclusion for fireworks from the tariffs.

Trying to ‘make people feel threatened’

If the United States excludes fireworks from tariffs, China might mess with the fireworks supply anyway to mess with the US, Horn says.

“I think what China’s trying to do is to make people feel threatened,” he said.

The number of US products on which China could slap tariffs is relatively low compared with the harm US tariffs on Chinese goods can do to China, Horn says. So Chinese officials are targeting what could upset tech companies, farmers and all Americans.

“If you can’t have your iPhone and you can’t sell your crops, that’s going to be significant.”

And if you can’t have your Fourth of July fireworks …

“I can see fireworks being a really big one,” Horn said. “It’s Americana.”




Investors hear a lot of pitches, but they only fund some startups. What criteria do they use?

First impressions, apparently.

Good looks matter, but not as much an entrepreneur’s perceived competence and confidence, a recent study indicates. In fact, if you’re only attractive and likeable, you’re likely to get a lower offer than someone who exudes confidence.

WashU Olin’s Xing Huang, assistant professor of finance, summed it up this way: “Nice people finish last.”

She teamed up with three researchers from Michigan State University to examine investors’ decision-making, and they came up with a novel idea for a laboratory: ABC’s reality TV show “Shark Tank.” The show features a panel of “shark” investors who hear business pitches from entrepreneur contestants. Then the sharks comment, ask questions and say if they’re interested in making a deal.

The researchers set out to explore the relation between two things: first impressions of “Shark Tank” contestants and the investors’ decisions. Toward that end, they manually collected data on 322 pitches during the first five seasons of the show, and they measured first impressions of contestants by asking a nationally representative 680 respondents about them.

Using the crowdsourcing marketplace Amazon Mechanical Turk, the respondents viewed photos of contestants and rated them along six dimensions considered important to entrepreneurs’ success: capability, confidence, trustworthiness, the ability to work under pressure, physical attractiveness and likeability.

The research team then swept those ratings into two principal components: competence/confidence and appearance/likability.

“The likelihood of receiving a shark’s offer is associated positively with both components,” Huang said. But it’s a different story when it comes to sharks’ putting their money where their mouths are. While sharks offered more cash and valuation to entrepreneurs who rated highly in competence and confidence, they actually offered less to entrepreneurs who rated more attractive and likable, according to the working paper “Swimming with the sharks: Entrepreneurial investing decisions and first impression.”

Maybe the investors think people who are likable will not be tough negotiators going forward, Huang said, so they make a lower offer.

“Business decisions are driven by both hard and soft information,” she said. Videos of the five seasons of “Shark Tank” offered the researchers an abundant set of variables including the likelihood of an investor making an offer, investors’ valuation of projects, and the funding structure. Unlike documents about entrepreneurs and ventures, the videos offered a spectrum of information on verbal and nonverbal cues, such as appearance and body language.

“Such rich information enables an investigation of the role of soft information in shaping investors’ decisions,” Huang said.

Increasingly startups are an engine of employment and the economy; young companies have created an average of 1.5 million jobs yearly over the past three years. Huang, whose research interests include behavioral finance and investor behavior, said she hopes the research will be helpful for entrepreneurs. “Understanding the decision-making process of the venture capitalist can help entrepreneurs better think about how they can get better funded,” she said.

Huang conducted the study with Michigan State University’s Zoran Ivković, MSU Federal Credit Union Endowed Chair in Financial Institutions/Investments and finance professor, and John (Xuefeng) Jiang and Isabel Yanyan Wang, both associate professors in accounting.