Where is the Romance for Women in Leadership? Gender Effects on the Romance of Leadership and Performance-Based Pay

The gender-wage gap in leadership positions is even wider than in lower positions. Managerial wages are partly performance based and one possible reason for the pay gap could be that women are not successful managers. Indeed, research into the “romance of leadership” suggests that managers’ abilities are judged on the basis of their companies’ performance (Meindl, Ehrlich & Durkerich, 1985). But previous research has not controlled for gender, so little is known about the dynamics involved in the romance of leadership for female managers. This paper presents an experimental study (N = 210) investigating the perception of managers’ leadership and their performance-based remuneration as a function of increasing versus decreasing company performance before and after the appointment of Chief Executive Officer. Results suggest that the award of a bonus to a male manager is directly determined by company performance, whereas for a female manager this relationship is fully mediated by the perception of their leadership ability. We conclude that female managers are not automatically perceived as agents of company performance but have to prove their leadership abilities before a relation between the manager’s leadership agency and a company’s success is perceived. Psychological interpretations of our results are discussed.