This talk examines a major historical change in employers’ pay-setting practices. In the post-war decades, most U.S. employers used bureaucratic tools to measure the worth of each job. Starting in the 1980s, employers abandoned these practices and relied instead on external market data to assess the price of a candidate. In doing so, organizations tied employee pay more tightly to the external labor market. This presents a puzzle for prominent theories, which propose that organizations aim to buffer internal functions from the environment. To describe this shift, I use a new database of 1,059 publications from the Society of Human Resources Management and 83 interviews with compensation professionals. These data highlight the surprising role of law. When the U.S. courts rejected comparable worth lawsuits in the 1980s, their decisions created an opportunity for employers to reduce liability for discrimination by relying on external, market data. Those legal decisions encouraged employers to abandon bureaucratic methods. The analysis identifies market coupling—using the market to distance organizations from discriminatory outcomes—as a response to the law and highlights how the comparable worth movement backfired by facilitating a change in organizational practices that entrenched inequalities.
Laura Adler is a PhD candidate in sociology at Harvard University. She works on topics at the intersection of organizations, gender, and cultural sociology with a particular interest in valuation practices, the future of work, and diversity and inclusion. Her dissertation examines how the interaction between organizations and gender equity laws has shaped employers’ pay-setting practices. Other research explores the world of work from the perspectives of workers, employers, and regulatory authorities. She has a Masters in City Planning from UC Berkeley and a BA from Yale University.