Salary negotiations?
Reddit made an announcement that they would ban all salary negotiations because women do not negotiate as well as men.
There are so many issues with this. It is a pure knee jerk reaction to seeing women make less than their male peers. I understand that but isn’t educating people more to the point.
Here is what I would propose. After hiring someone I would hope that there would be a 3 month follow-up in regards to their performance, culture fit, etc. That would be the time to say, guess what, you are making this much less than all of your peers. We think you are terrific but you negotiated for less than what you are worth. Here is how we are going to help you become a better negotiator and more confident in your skills. We are going to let you meet with a few coaches and decide which one you think you want to work with. You will meet with that coach once a week for the next few months to learn how to become a better negotiator, leader, employee, etc.
The shift in the workplace would be significant. Educating people to hone their skills is a bonus. It isn’t a union. It is totalitarian. It isn’t benefitting women. It is demoralizing.
Those employees who no longer have to negotiate their salary aren’t learning anything. How can these people then move forward with their careers without having learned that part of the game. You can fix those salaries by giving the poor negotiators increases to the same level as their peers but do it with the caveat of having to learn a skill for the next time they have to negotiate something. That next time could be negotiating a deal for the company with outside clients.
It is a competitive world out there. Learn how to compete.
Comments (Archived):
Yes! It benefits men, too. Not everyone loves to negotiate, and yet with some basic frameworks (and solid data points) you can make it your own.SVA student Rachel Hsuing is working on this as a project:http://letstalkaboutpay.tum…I also think that the career centers at schools are ideally positioned to help students with this. They can provide anonymized salary data for grads, they can offer negotiations workshops.If I were paying the freight to attend college/grad school — for myself, or a family member — at today’s prices, I’d be insistent on the existence of these sorts of services.
That’s a great idea for college services.
The bschool I graduated from publishes starting salaries for new grads. I’ve asked them to break it down by demographic categories that they also collect and publish.(crickets)The school that starts to simply report data will leverage real results for its grads.I’m betting Harvard will beat everyone to the draw on this one — and it just takes one school before others pile on board.
Thanks for sharing Let’s Talk About Pay, Anne!And Gotham Gal: I completely agree that Reddit’s elimination of salary negotiations is really just a knee-jerk reaction that doesn’t get at the root of the issue of pay inequality. My reasoning differs slightly, but boils down to this:Simply telling employees that the first offer they got is the only offer they’ll get DOESN’T help if the offer is unfair to begin with. If you simply eliminate negotiations, all you’ve done is take away employees’ right to advocate for themselves, without empowering them to know when inequality is afoot.I wrote a little more extensively about this here: http://letstalkaboutpay.tum…Also: I’m going to see if SVA will do something like what you’ve mentioned Anne, re: publishing new grads starting salaries.
Be sure to ask for demographic breakdown. If we had known about disparities in 1995 when I graduated from bschool, I wonder if things would be different for young women coming out of school today.
Not everyone loves to negotiate, and yet with some basic frameworks (and solid data points) you can make it your own.I get paid by people to negotiate but yet I have never taken a course, and have never read a book on the subject. But I can always tell when I am dealing with someone who has. It tends to be so un-natural and sends off all sorts of tell tale signs of “having read some book or taken a course”. I learned back as a kid (and in college) by actually going out and dealing with people as I’m sure many others have.The only way to learn to negotiate (and be clear not everyone is cut out to do this no question about that) is to actually engage in negotiation over a period of time on a wide variety of deals. It has to be intuitive and second nature. Exceptions? Sure as with anything.Once you can do this you can do this in any situation. Of course I am not talking about peace talks with IRAN or large billion dollar insurance settlements but rather the type of things that people run into over the course of business or personal life. Although if you know the basics they are applicable in a wide range of situations.In the end, because women would tend to be more sensitive then men are I would actually have to believe that they should be better then men at negotiation given the right skills and practice in doing so.
Knee jerk reaction is right. At least they have the good intention of bringing in equality, hopefully they’ll find their way sooner rather than later. The issue is probably that companies feel pressure these days to be perceived favourably when it comes to equality and diversity issues, and that can lead to “funny” decisions at times. It seems to he the world is moving in the right direction though.
Agree. “It’s a competitive world out there. Learn how to compete.” That needs to go on a T shirt.
I love that
I’ll supply those tees
Lol
I second that. Or at least on a poster.
I always find these discussions fascinating. I am with you Joanne—learning how to negotiate is a critical skill. So I’d like to add my experience about what a “good negotiator” actually means when it comes to salary negotiations. Early in my career, I read an HBS study that said that the reason women don’t make as much as men is that they don’t ask for as high a salary as men. It wasn’t actual negotiation skills, it was simply the starting price that was the difference between men and women. That rattled me in a way few things did, so I vowed to always to ask for as high a salary as possible, in part as a way to for me to figure out how to solve the gender pay gap. (One book gave the tip “Figure out the salary that is almost impossible for you to say out loud. Then add $10k to it).That was the full extent of my “learning to negotiate”. But something very interesting happened. Every salary negotiation after that—which were all with men, especially as I raised in rank—I would say the salary I was looking for and whoever I was negotiating with got angry. I mean, really angry. Once I was at a lunch meeting, and after I said the salary I was looking for, the guy canceled coffee, asked for the check, and didn’t say another word to me. A second time, the interviewer started yelling, “We can’t possibly pay you that! That’s higher than almost everyone else in the department.” My response was “You are trying to recruit me. I am happy where I am now.” He, too, ended the meeting abruptly.The funny thing was—-I got the job offers, at the salary I asked for. In fact, in the second case, they gave me a signing bonus on top of that. And what happened was, after those two jobs at those salaries, it was really easy to say at the next jobs, “But I’m already making $X. I couldn’t possibly make less than $Y. And I would be happy to show you my pay stub.” It never even felt like “negotiating”.My learning from all this was:1) Do your research, which is 2 parts: a) know explicitly what value you would bring to that particular organization. Think about the actual results you have gotten and how you could bring similar results to the actual business challenges of the organization you are interviewing with b) figure out what is the highest possible salary you could ask for without sounding absurd. If you do a good job with (a), they will want you at almost any reasonable price (b).2) Don’t back down because of anger. I honestly think this might be a gender difference—women have been socialized to be afraid of men’s anger. That fear might be the *reason* they don’t ask for as much to begin with. But the correct way for someone to respond to your salary request which they think is too high is with a counter-offer. Wait for the counter-offer. Ignore the anger, unless it makes you think that you could never work with that person because of it.3) Try to get at least one high paying job as early in your career as possible. Switch jobs while you are happy and at the top of your game if needed. That one high paying job offer will be your leverage for all future job offers. 4) Never take a job where you don’t understand what it would take to do a good job. Then, when you get there, do a good job no matter what. You lose leverage by not doing a good job, even if it’s a job you hate.Hope that helps.
Yes, yes, yes. It’s not about leveling the playing field, it’s about making sure everyone has the same equipment with which to play the game.
THIS. * high five *
I always find these discussions fascinating. And I’m interested in discussing what a “good negotiator” actually means. Early in my career, I read an HBS study that said that the reason women don’t make as much as men is that they don’t ask for as high a salary as men. It wasn’t actual negotiation skills, it was simply the starting price that was the difference between men and women. That rattled me in a way few things did, so I vowed to always to ask for as high a salary as possible, in part as a way to for me to figure out how to solve the gender pay gap. (One book gave the tip “Figure out the salary that is almost impossible for you to say out loud. Then add $10k to it).That was the full extent of my “learning to negotiate”. But something very interesting happened. Every salary negotiation after that—which were all with men, especially as I raised in rank—I would say the salary I was looking for and whoever I was negotiating with got angry. I mean, really angry. Once I was at a lunch meeting, and after I said the salary I was looking for, the guy canceled coffee, asked for the check, and didn’t say another word to me. A second time, the man started yelling “we can’t possibly pay you that! That’s higher than almost everyone else in the department.” My response was “you are trying to recruit me. I am happy where I am now.” He, too, ended the meeting abruptly.The funny thing was—-I got the job offers, at the salary I asked for. In fact, in the second case, they gave me a signing bonus on top of that. And what happened was, after those two jobs at those salaries, it was really easy to say at the next jobs “But I’m already making $X. I couldn’t possibly make less than $Y. And I would be happy to show you my pay stub.” It never even felt like “negotiating”.My learning from all this was:1) Do your research, which is 2 parts: a) know explicitly what value you would bring to that particular organization. Think about the actual results you have gotten and how you could bring similar results to the actual business challenges of the organization you are interviewing with b) figure out what is the highest possible salary you could ask for without sounding absurd. If you do a good job with (a), they will want you at almost any reasonable price (b).2) Don’t back down because of anger. I honestly think this might be a gender difference—women have been socialized to be afraid of men’s anger. The correct way for someone to respond to your salary request which they think is too high is with a counter-offer. Wait for the counter-offer. Ignore the anger, unless it makes you think that you could never work with that person because of it.3) Try to get at least one high paying job as early in your career as possible. Switch jobs while you are happy and at the top of your game if needed. That one high paying job offer will be your leverage for all future job offers. 4) Never take a job where you don’t understand what it would take to do a good job. Then, when you get there, do a good job no matter what. You lose leverage by not doing a good job, even if it’s a job you hate.
Great info. Diligence first.
I agree, it all comes down to educating women about their options and how to be as aggressive as men professionally when it come to their worth. thanks for the insight, I had no idea it was a negotiating issue rather than ignorance.
I know so many women entrepreneurs that my experience is slanted as most are just really sharp business people.Maybe skewed by recent experience in the wellness market where women leaders are the norm from the finance to the product side.B
From what I have read it seems like the goal was not only to eliminate differences between aggressive/non-agressive negotiators but to rule out any unconscious bias from the recruiters. But I think you have a good point that with this solution no one is learning anything about how to advance themselves. I would still be sitting around wondering if the “fair salary” they chose for me was higher or lower than the “fair salary” they chose for my male counterparts. As a woman I love the freedom and power that comes with negotiating my salary.
What you just described is what every woman (or man) does when they want to learn to negotiate, minus the expectation that it’s somehow the companies’ job to teach them to do this. It’s already in every employees best interest to do this… and it always has been as long as capitalism has existed. Whether a given person actually desires the implications of negotiating is the bigger issue I think. I work in an industry (trading) that is probably 98% male dominated. If you survey women why they don’t go for these jobs, it’s because they want security in their role. Negotiating everything might increase your take home, but it does increase the possibility you’re going to leave a company. For these people it’s easier just to skip the negotiating and complain that you get paid less. Oldest story in the world, been happening long before women joined the workforce. So I agree that reddit probably is not going to close the income gap, but I also know they are a for profit company and presume pao and her comp committee are smart enough to know how to attract and retain the types of employees they need to succeed.
Pao said:“Men negotiate harder than women do and sometimes women get penalized when they do negotiate,” Pao said. “So as part of our recruiting process we don’t negotiate with candidates. We come up with an offer that we think is fair.”She didn’t say she wouldn’t negotiate, just not when doing initial hiring. So we can assume people will negotiate later on?Anyway, this is really no different then in negotiating stating that your price is non-negotiable. If you do so, you are completely removing the ability of someone to stall and think “hmm how do I know they won’t pay me a bit more”. So it draws a line in the sand and in the ends ends up saving money for the company. Which is why they are probably doing it. [1] The problem with that is that there is no such thing as the idea that a fair offer for one person is a fair offer for another person. Plus you are clearly disadvantaging yourself in terms of getting the best “widgets” that you might need.To be clear they will play all sorts of games with this. If someone needs to relocate they will kick them extra money. If someone needs more money they will give them a different title. And so on. There are ways around this.Lastly, this disadvantages women who do know how to negotiate. Seems unfortunate to paint everyone with the same skill set and ironic because of gender.[1] Being cloaked as “good for women and that’s why”.
I keep getting puzzled at the startup world ignoring tried and true practices and wanting to re-invent management and managing people.Newsflash- you don’t need to negotiate salaries if you have well defined salary bands, regular performance appraisals and a process for rating and ranking people based on their performance.I worked 14 years at HP- as a manager for 10 of those years, and the salary process was well defined and well done. There was NEVER EVER any discrepancy between women / men salary levels (and we’re talking 80’s 90’s).It starts like this: (fictitious numbers)Engineering Level I – Salary 50-70K, 4 bands: Average, Good, VG, Excellent. Engineering Level II – Salary 65-90K, 4 bands, same. Management – Salary range 70-100K, 4 bands, same.Then, during performance appraisals, you rate each employee as Average, Good, VG, Excellent and you provide salary increases based on that rating. There is no negotiation, but there could be a discussion pertaining to results achieved between the employee and manager, prior to the final rating.(there is more to it, but that’s the gist of it)
this is bigco implementation.non of this exists in a startup pre 50 people.the idea that you don’t negotiate your salary at any level above manager is not true for any company I’ve worked for or with or heard of.
As you get your first offer, there is room for negotiation, yes. But a bit of discipline and consistency in setting standards would help remove some of the uncertainties & deviations. True, startups wing it based on what they can afford & other factors, but as the company matures, salaries levels should be normalized. I have instances of small startups where an (experienced) founder set standard levels & stuck to them.When we recruited co-ops from the U of Waterloo, each level has its salary bands, and we stuck to them when making offers.
I think being smart about it makes sense and bringing learnings from the past is just what experienced people do.But I think to bring bigco processes to the true emotional and financial insanity that typifies a startup pre sustaining revenue is not that helpful.I have as much experience as you do and in my own projects i certainly bring a poise to the process of hiring and managing. But the realities of cash flow and the crazy swings of the businesses are their own dynamic, not at all alike to the company structure that is not subject to the concern s about making payroll.
We agree it’s not as easily done, but easier for well funded startups where part of payroll uncertainty is taken care of.
I am really late to this party, but isn’t this a great way publicly say you aren’t going to negotiate salaries?In today’s really hot market I could see how this gets out of control.We’ve all been here: You have a really key opening which you really have been struggling to fill, you find a person you love, you make a offer within your structure, they come back with a really high counter-offer, it might even be backed up with the facts of their current compensation.Its really tempting to give in and close the deal. I’ve done it. I’ve regretted it.You now have management debt, because you know that number is going to come out. So either give huge raises or politely walk away.BTW: This happens at big companies at the higher levels.
I think we agree largely. Yes, I’ve also made that mistake once of paying more than I wanted, because I needed the person (and we ended-up terminating him before his initial 3 months were up).What I was trying to say is the initial entry point gets tricky sometimes if the founder doesn’t set a range and sticks to it.
I totally agree. Somethings just work.
“The shift in the workplace would be significant. Educating people to hone their skills is a bonus. It isn’t a union. It is totalitarian. It isn’t benefitting women. It is demoralizing.”My impression is that some “isn’t” are missing or placed wrong.Or do you like totalitarian workplaces, which are demoralizing and not benefitting women?
We’re just going to let the premise “because women do not negotiate as well as men” slide? That statement on its face is outrageous. I know some really crappy male negotiators and some outstanding female negotiators. Men and women may have different styles of negotiation (although one of the most aggressive negotiators I know is a woman) but different methods do not necessarily imply different results.To play devil’s advocate if someone suggested that women never get hired into positions that require negotiation because they do not negotiate as well as men, they would be pilloried.
Very very true.
.Life isn’t fair but you can make it better than it is right now.In life, we don’t get what we deserve, we get what we negotiate.Only you are responsible for managing your career.In those three sentences is the reality of the workplace whether you work for a startup or GE.Once you embrace those simple aphorisms, you are called to act. Act.I have helped several young folks–mostly employed by startups–negotiate raises. This apparently frightens the crap out of them.I had so many inquiries, I wrote one of them a whitepaper to guide her process. Here is a link to the whitepaper.http://themusingsofthebigre…If you want a copy, ping me at [email protected]. I will send Joanne a copy via email.The people who have used this approach are batting a thousand. Not a single failure thus far.JLMwww.themusingsofthebigredca…
My wife pulled off one of the best salary negotiations I’ve ever witness or known about. It’s true: she’s a woman.
nice!!