1. In what ways does equity theory and expectancy theory help to explain the reaction of Stylen’s employees to the results of the company’s gender pay report? In 2017, Germany’s Federal Council passed the Entgelttransparenzgesetz, or Wage Transparency Act, as a means to address gender equality in pay. The Act provides a legal definition of ‘equal work’, along with pay transparency measures. The legislation was derived from recommendations made by the European Commission in 2014.

While forms of pay transparency have been in place in some Scandinavian countries for the past 20 years, the European Commission intended to promote pay equity throughout its 11 Member States by recommending:

yy the individual right to request pay information;

yy compulsory company-level gender pay reports for companies with more than 50 employees;

yy more analytical gender pay audits for larger companies; and yy to encourage social partners to take the matter into account in their collective bargaining.

In Germany, the new law provides a number of employees of companies with more than 200 staff the right to know what their co-workers in similar positions earn, and requires companies with more than 500 staff to publish information on actions they take in regards to pay equity. Published pay reports are not obligated to contain any pay statistics.

Despite Germany putting pay transparency into law, it has not been widely implemented. Only a small number of German companies have actually started reviewing their pay structures and surveys have shown that few German employees are asking about how their pay compares to others doing similar work. It also continues to be a controversial idea. Industry bodies, such as the German Confederation of Skilled Crafts

(ZDH), have opposed the legislation, claiming that it is unnecessary and will result in a ‘climate of mistrust’

in the workplace. In one survey, senior HR managers expressed scepticism about the law’s effectiveness and the need to address a gender inequality in pay they felt did not exist