Why Banning Salary Negotiations Won't Close the Gender Pay Gap
The Washington Post recently posted an article by Laura J. Kray, professor of leadership at the University of California, Berkley, Haas School of Business, entitled: “The best way to eliminate the gender pay gap? Ban salary negotiations.”
The sub-title: “At the bargaining table, women are in a non-win situation.”
In her article, Kray discussed the announcement last month by Ellen Pao, interim chief executive of Reddit, to ban salary negotiations at the social media company. Her stated goal: to eliminate the persistent disadvantage that women have at the bargaining table.
As a lawyer who has worked for more than 20 years helping companies fight gender inequality, I respectfully and strongly disagree. Here’s why:
There is no debate that there is gender gap. The only question is how big a gap.
No doubt, a part of the gender gap is that men (as a group) are more likely than women (as a group) to negotiate for more. I believe it is equally clear that there are societal reasons why women may be reluctant to negotiate for more. Sheryl Sandberg correctly notes that ambition in a woman is not received as favorably as when demonstrated by a man. As she wrote in Lean In: Women, Work, and the Will to Lead. " "She is very ambitious’ is not a compliment in our culture.”
Even so, Pao’s reaction is paternalistic, or should I say “maternalistic?” We need to address the gap but cutting out negotiations is an overreaction that is problematic for multiple reasons.
First, it reinforces stereotypes about women.
Second, it deprives women (and men) who are good negotiators of the benefits of their skills.
Third, we can learn a lot about a candidate by how they negotiate in the interview process. If someone’s articulated expectations are absurdly high, that may be a legitimate reason to reject them.
But to ignore the issue is not a viable solution, either. Here are five suggestions:
First, establish salary ranges for positions. Do not allow managers to go outside of the range without prior permission from someone who can assess the legitimacy or need for the request.
Second, if you go outside the range for an applicant, consider also what you should do for existing employees. For example, if you are willing to pay an applicant an extra $10,000 to an applicant who is demanding more, do current employees get the same increase? In addition to concerns about the gender gap, you don’t want to send the message you get more if you are an outsider coming in than a loyal insider staying put.
Third, eliminate the question on prior salary from the application process. It may perpetuate gender bias. The bottom of your range may look great when compared with the applicant’s prior salary but may not be fair when you look at her (or his) experience, etc.
Fourth, be transparent when it comes to salary and negotiations. Make clear to all applicants if salary is negotiable. If you invite negotiations and someone does not, that is an issue. If someone asks for double, that is an issue, too.
Finally, although not the role of the hiring employer, we need to empower women to ask for what they believe they deserve (yes, lean in). If you are a woman (or man) and not sure what to do, seek out mentoring from a friend or professional peer.
Women, do not exclude male allies. We may have some insights on how to confront the issue, recognizing that there are differences in how requests for more money may be met if made by a woman than a man.