A person’s gender can affect negotiation outcomes and career prospects. How can we
ensure equitable pay for everyone?
We may hope and work for gender equality in the workspace, but the data show we’re not there yet: women in the United States earn 82 cents for every dollar that a man earns.
We can partly understand this disparity by looking at the multiple sources of bias that lead to it, including the deeply ingrained cultural biases that lead women to play a part in lowering their own future income. For instance, women are more likely than men to take time off from their careers to have and raise children or choose the more flexible but less lucrative job to make time for family.
But the gender pay gap can also emerge during the hiring process: research shows that women may be less likely than men to initiate salary negotiations. Even when they do negotiate, women are less likely to achieve their desired results.
Gender in negotiations
Here’s an example. In 2005, researcher Hannah Riley Bowles and her colleagues asked almost 900 MBA students to complete a survey about their post-graduation plans. Bowles included a question about starting salaries to indirectly measure negotiation strategies. If men and women were negotiating equally, their starting salaries should be the same. But Bowles found something interesting: the average starting salary for male MBAs was $5,941 higher than that of female MBAs. And this wasn’t due to things like previous work experience or job preferences. Even when Bowles controlled for those variables, female starting salaries were 5% lower than male salaries.
This gender difference in negotiation isn’t an isolated result. Studies across different occupations show similar findings:
- Female librarians in academic libraries are less likely to negotiate salaries, and when they do negotiate, they receive less than their male librarian counterparts.
- Male lawyers earn 5% more than female lawyers; as lawyer salaries often require significant negotiation, gender differences in negotiation likely play a role here.
- In healthcare, female doctors consistently earn less than men and often see themselves as less capable of successfully negotiating.
- Male nonprofit executives earn, on average, almost 9% more than female nonprofit executives; this pay gap shrinks when negotiation opportunities are limited or when women are specifically encouraged to negotiate.
What’s causing this gender difference?
One potential culprit leading to this gender difference in negotiation is stereotypes.
For employers, gender stereotypes influence what is expected from male and female candidates and what they should do in response. Think about the traditional stereotypes of men and women. Even today, there exist stereotypes of women as more agreeable and communal than men, and men are perceived to be more assertive, competitive, and individualistic than women. Data show that because of these stereotypes, assertiveness is often more expected and accepted in men. But for women, going against the agreeable and communal stereotype in a negotiation setting (and being competitive to boot!) can result in negative evaluations from the hiring manager.
The beliefs women hold within themselves can also shape how successfully they negotiate.
For instance, women may do worse at negotiating than their male counterparts because they underestimate what they believe they deserve. One survey of 427 general surgery residents across 19 residency programs found that women put their ideal starting salary as $334,709 on average, while men had an average ideal starting salary of $364,663. Women were asking for $29,954 less than men!
This raises the question: why are women asking for less? One potential reason is confidence. Research shows that women tend to be less confident and more nervous about initiating negotiations. This leads to them setting lower targets and ultimately accepting a lower salary. Why shoot for a high target at all if you don’t feel like you’ll be able to achieve it?
The lack of confidence in negotiating may be another place where stereotypical thinking comes into play — negotiating is often more associated with the self-promoting and aggressive male stereotype, and women may lack confidence in activities closely associated with men.
Women may also lower what they ask for depending on who is reviewing their request. A study of MBA students found that single women, but not married women, asked for a salary that was $18,000 lower when they knew men would see their requests as opposed to having their requests reviewed by women only. According to the authors, the single women in this study may be trying to seem more “feminine” to make themselves more attractive on the marriage market – men may be less likely to date women with stereotypical male characteristics like ambition and assertiveness. Overall, stereotypical (and often implicit) thinking about whether they should negotiate at all may lead women to negotiate less.
Towards more equitable pay
So, what can we do to reduce gender bias in negotiations and make sure everyone receives the compensation they deserve?
Organizations can start by communicating clear standards before negotiation even begins. For example, they can enforce clear role expectations and set policies on when negotiation is possible based on professional developmental opportunities. Organizations can also take measures to communicate changed ways of thinking and implement new policies built to reduce gender bias in negotiation.
On the individual level, women can perform better in negotiations by clearly framing their goals as a mutual gain for them and their employer. And the research backs up this strategy: women can reduce gender bias in a negotiation by clearly communicating the skills they bring to the table.
There’s no reason gender should play a role in negotiations. By setting clear standards and establishing good communication, we increase the chances that people of all genders are compensated for their contributions fairly.
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Outsmarting Implicit Bias is a project founded by Mahzarin Banaji, devoted to improving decision-making using insights from psychological science.
This article was written by Caitlyn Finton, Nini Sikharulidze, and Mahzarin Banaji.
Artwork generated by DALL-E artificial intelligence and edited by Evan Younger.
Support for Outsmarting Implicit Bias comes from Harvard University, PwC, P&G, and Johnson & Johnson.