To Negotiate or Not to Negotiate?

Ellen Pao, CEO of Reddit, has been at the top of the headlines recently for fight gender discrimination. In the latest news, she announced that she would eliminate salary negotiations when an employee is hired because she claims that “Men negotiate harder than women do and sometimes women get penalized when they do negotiate,” she 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. If you want more equity, we’ll let you swap a little bit of your cash salary for equity, but we aren’t going to reward people who are better negotiators with more compensation.” According to the Institute for Women’s Policy Research, in 2013, female full-time workers made only 78 cents for every dollar earned by men. That is a 22% difference for the same work! So what is the cause of this gap? Do salary negotiations play a large part in this gap? Ellen Pao’s approach is opposite that of Sheryl Sandberg, Facebook’s COO. She encourages women to negotiate and speak up for what they think they deserve. She uses her own experience as an example:

“It never even occurred to me to negotiate my first salary,” Sandberg writes in her book. “I waited for someone to tell me how much money I’d be earning so I could figure out where to live. I ended up supplementing my income by teaching aerobics classes on the weekend.” When she was interviewing for her current job at Facebook, Sandberg refused to make the same mistake and negotiated in a way that brought her the compensation she wanted while maintaining her likability. “I negotiated hard, followed by a nervous night wondering if I had blown it,” she writes. “But Mark [Zuckerberg] called me the next day. He resolved the gap by improving my offer, extending the terms of my contract from four to five years and allowing me to buy into the company as well. His creative solution not only closed the deal, but also set us up for a longer-term alignment of interests.”

What do you think about Ellen Pao’s approach? What else do we need to do as a society to decrease this gap? Sources:

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