Wednesday, February 14, 2007

Salary Negotiations and the Gender Gap

As you probably know, there is a serious gender gap in earnings in this country (and others). The average woman working full-time and year-round earns about 3/4 of what the average man does.

There are a lot of factors involved in the gap, of course-- an interlocking and reinforcing tangle of structural problems, sexism, and personal choice. It's near impossible to completely tease out the separate issues, but I hope to explore many of them in a series of posts, beginning with this one.

One part of the problem which I've been reading about lately is the difference in starting salaries between men and women-- and specifically, the impact of negotiating salary offers (or failing to do so). There are huge gender differences here. One study looked at a group of newly minted master's degree holders going out into the workforce, and found that 57 percent of men negotiated their starting salary while only 7 percent of women did. Those who negotiated increased their salaries by an average of 7.4 percent, or $4,053. Because future salary growth is so tightly linked to initial salaries, this single initial difference can have tremendous consequences to the tune of $500,000 or more over a lifetime.

Clearly there are personal factors involved in whether you negotiate your salary. But the problem is much broader than blaming each individual person for not having the "courage" to ask for more. This is society-wide; 2.5 times more women than men feel "a great deal of apprehension" about negotiating, and studies consistently show that women expect to be paid less than men for the same jobs.

Part of this is a matter of internalized gender expectations. But part of it may also be a rational response to sexism in society-- some studies have shown that women who attempt to negotiate salary are viewed more negatively and are less likely to be hired than men who do the same.

So how do we deal with such massive inequities? You could look at it on the individual level, and try to encourage and coach women to have higher salary expectations and be better and more confident negotiators. (And there's nothing wrong with that.) But regardless of what each individual woman does, women in general-- and many men, too-- will continue to be penalized financially if they don't happen to have the combination of personality, skills, and knowledge that equip a person to negotiate a higher salary well, a set of qualities which don't necessarily indicate the person will be any better at their job (in most cases). And women will continue to face the catch-22 of being viewed more negatively if/when they do try to negotiate.

In my opinion, employers need to have much more consistent salary scales. I am thankful every day that I'm represented by a union-- for a lot of reasons, but one of them is that I'm both afraid of and bad at negotiating over salary. Instead of having to individually haggle over the dollars and cents I should be paid, I just need to make sure I'm in the highest job classification I'm qualified for, based on a clearly spelled out list of requirements and duties, and then I know I'm being fairly paid, just the same as everyone else who is doing the same work. But even in non-union workplaces, there's no reason salary scales can't work similarly, so that everyone with the same qualifications in the same job title-- regardless of gender, regardless of personal skill at negotiating and willingness to do so-- gets paid essentially the same amount.

How do we get there? Besides organizing unions (which I'm always a big fan of) or trying other ways to collectively push management/HR to implement consistent salary scales, another way is simply to try to break down the taboo against talking about salary within the workplace. When unfair salary discrepancies start getting out into the open, that can build pressure to find ways to fairly reward all workers for their skills and performance, rather than rewarding (mostly) men who happen to be willing and able to negotiate well for themselves. (There are also bigger legal/political strategies that I think should be pursued in this same vein.)

What do you think? I would really love to hear people's comments on your salary negotiating experiences (ID yourself by gender, if you wouldn't mind!) and on how your workplaces have addressed salary scales. Do you think the status quo is problematic? Do you think my suggestions are problematic? Do you have other ideas?

And keep an eye out for further posts looking at other pieces of the gender gap in wages!


Wanda said...

One of the problems talking about salary is that in many companies, that is a clear violation of HR policy and can be cause for termination. This is one of the reason why I do not disclose my job title/function on my blog, I do not talk about salary, and I do not even plan on talking about monthly 401(k) contributions.

As for the negotiation aspect, I absolutely agree that it's intimidating to negotiate for higher pay/more benefits, especially for women. Some books that I am going to read (and come recommended by a couple of career consultants I've met) are Nice Girls Don't Get the Corner Office, Never Eat Alone, and Women for Hire.

I think the negotiation aspect is part of a wider issue - managing your career. Networking, cultivating mentorships, staying on top of what's going on in your industry are all essential components of a successful career. I'm not a "natural" at all of the above, but I'm trying, in recognition that if I don't do it, no one will do it for me. I am ultimately responsible for my career.

Whew! This is a long comment. I guess I feel so strongly about this topic because it's hard to get out of the "comfort zone," but you HAVE to. I have to.

Anonymous said...

I disagree that jobs should be tightly classified by grade and description (like the federal model). I understand and accept the chief executive at my workplace make ten time what I do because he has an outstanding combination of persuasion, drive, and business smarts. Somewhere along the way he was able to convince decision-makers that he is worth the money he gets paid, able to do it in a way which I can not. Should he have been held back because of what I lack?

ispf said...

Hey Penny Nickel, I think this is a great post ! Linked to it from my blog with my take on it.

[...] Next, on to some serious stuff. Penny Nickel at Money and Values has an excellent article about Salary Negotiations and the Gender Gap. Penny Nickel muses that since there are a lot of social and psychological barriers that make salary negotiations difficult for women, maybe it is better to implement consistent salary scales. Personally, I like the performance based pay increase to the unionized consistent pay structure that Penny Nickel proposes. The performance based pay structure values individual work and encourages and motivates creativity, effort and some level of competition. Yes, it could lead to unfair income gaps, and people who cannot negotiate for a good starting salary will be at a disadvantage. But seeking to level the playing ground is like admitting women are not capable of playing the game on the same terms as men. I refuse to admit that! I think we should still work on educating women (and men) and bringing in the mindset that we deserve the same treatment in terms of both respect and remuneration as the men that we work shoulder to shoulder with, every single day, to keep corporate America (and individual households!) running smoothly. [...]

Penny Nickel said...

Wanda: I know you're right about those HR policies being common, but they just seem terrible to me. What a blatant way for management to get away with paying everyone as little as they can get away with! And on the career management front, as I said, that's all well and good-- I just wish the penalty for those who aren't as good at it weren't so high!

Penny Nickel said...

Anonymous and ISPF: I guess my point is, does relying on individually-negotiated salaries really reward success and high performance? I would argue it doesn't. It rewards a particular mix of confidence/cockiness, self-promotion/entitlement, assertiveness/aggressiveness, etc that can sometimes be beneficial and sometimes be a drawback in the workplace. (Not to mention that studies show that women can be great at negotiating for others and still bad at negotiating for themselveves.) I think it's pretty fair to say that in many cases (I'd argue most) people are equal performers at their jobs but are paid unequally because they're unequal in the narrow category of "negotiating salary."

On top of that, it also rewards ability/willingness to negotiate salary-- already unevenly distributed by gender-- in a biased way, considering the aforementioned evidence that women who bargain on salary are viewed and treated more negatively than men who do the same. That's not to mention all the other inequities-- for example, being in a sufficiently comfortable economic position to take a "I need more or I'll walk" stance. (Of course, this whole discussion is only relevant to a relatively privileged segment of society in the first place.)

I guess what I'm asking, ISPF, is can't we still reward "individual work... creativity, effort and some level of competition" without requiring people to haggle over what they "deserve" and what they're "worth" in dollars and cents? Just because you have consistent and fair pay scales doesn't mean you can't still enter at the level you're most qualified for and climb up the ladder through your effort, creativity, etc.

In other words, I don't think the question is whether "women are... capable of playing the game on the same terms as men"-- my question is, why set the rules of the game in ways that favor men? Why should women have to succeed on men's terms when instead we can work to redefine "success" (and reward it) in more fair, egalitarian ways?

ispf said...

Penny Nickel: You raise a lot of good points.

"Just because you have consistent and fair pay scales doesn't mean you can't still enter at the level you're most qualified for and climb up the ladder through your effort, creativity, etc."
I work in the tech sector and I think it is very hard to implement this. Every person has a different skill level, even at an entry level. This is complicated by people switching jobs every few years. In addition, different companies require different skill sets and what is considered as an essential skill in one company may be considered completely irrelevant in another. So coming up with a consistent pay scale will be very difficult. You could create slabs and try to fit people into each slab, but then that has the problem that you could end up undervaluing the high performers and giving undeserved bump-up to the underperformers. So, while what you suggest will ideally be great, in real life, I doubt if it can be put into action.

"does relying on individually-negotiated salaries really reward success and high performance?"
It probably doesnt :( That said, I still prefer to take my chances with a performance based system where I have an opportunity to improve my salary through improving myself than to rely on a system where I might be "fit" into a category based on some rules for consitency that I have no control over. (To me that somehow sounds like socialism).

"why set the rules of the game in ways that favor men?"
The rules of the game have been set long back. You are right, they are probably heavily in favor of men. What you are asking is to change the rules to be fair to women. Yes, that is something we should fight for. But in parallel, we should also aim to teach women to play with the existing rules, just so we get to continue to play, because changing established rules usually takes a looong time.

Penny Nickel said...
This comment has been removed by the author.
Penny Nickel said...

ISPF: Thanks, you make good points too and I appreciate the discussion!

You're definitely right that having consistent pay scales can be difficult (especially in certain jobs) and that it necessarily involves tradeoffs... I didn't mean to imply that you don't lose some things to gain others. I think we'll just have to agree to disagree on whether the tradeoffs are worth it.

(Although I can't help pointing out that your fears of "a system where I might be "fit" into a category based on some rules for consistency that I have no control over" is exactly why I think the concept works better with a union! When you and your coworkers stand together on even footing with management to set the rules, I'd think the average worker has much more control than if he/she is going it alone against the whole management structure.)

"What you are asking is to change the rules to be fair to women. Yes, that is something we should fight for. But in parallel, we should also aim to teach women to play with the existing rules, just so we get to continue to play, because changing established rules usually takes a looong time." On this we agree 100%! I just don't want the deeper issues to be lost in the process.

ispf said...

I enjoyed the discussion a lot too, Penny Nickel. I hope you will continue to write thought provoking articles in the future too!

Jessica said...

Great post - I came to you from Bumble Bee Sweet Potato. My very recent experience with this is that although I get consistently excellent reviews for my work and my "good judgment", my boss told me that because I "use my hands" too much when I talk and because I am sometimes "too emotional" and "too agressive" (but right, most of the time), I am probably being paid about $50,000 less a year than I should be paid. (He doesn't have control over my salary). My company just hired a man who is ostensibly at my level but a year behind me in seniority and has far less institutional knowledge than I do. My boss claims he doesn't know what this man is getting paid but is pretty sure it's more than I'm being paid because "he came from the outside."

I'm trying to negotiate for a different job (I'm a lawyer) and I want my current company (my boss) to give me work at my possible new job. So I can't make a stink. And it wouldn't do much good anyway because that would just feed into their perception that I'm too emotional.

It sucks, but it is what it is. I used to question whether there really was a glass ceiling until I bumped my own head against it two weeks ago. I hate negotiating but my husband is an excellent negotiator and helps me A LOT. But there are times when you have to think on your feet and I get caught too easily. I imagine (hope) that our two girls will be much better negotiators than I am because they're learning from their father.

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