Negotiation, Pay, and Discrimination …

So, Stephanie Zvan is posting old posts because she’s too busy at the moment to write new ones, and she’s reposted one about it seems, someone who is finding another way to blame women for being paid less. The post basically highlights the post of a (male) manager who’s pointing out that he’s noticing that in negotiating salary and raises women constantly low-ball their offers, while men ask for higher salaries and raises. He suggests that women stop low-balling their offers and that that will help reduce the pay gap.

Zvan, of course, is pretty much livid over the suggestion:

Dear manager who is paying his or her female employees less than the males: You’re discriminating against women. Worse than that, you know you’re discriminating, and you’re blaming the people you’re discriminating against.

It doesn’t matter that this is policy. In fact, that makes it both worse and a point of legal weakness in the HR policy at your company. A policy that creates gender disparities in pay that isn’t based on job performance is a big flag that says, “Sue me, ladies!” And nothing about negotiating one’s pay is job-related. Nothing about needing to ask for a raise instead of receiving them as part of regularly conducted job reviews is job-related.

Now, someone in the comments pointed out the big, gaping flaw in this “You’re discriminating” charge aimed at the manager:

So what exactly should the negotiator DO to fix it? I notice you’re just blandly directing him to do something without suggesting anything of substance he can do.

Should he make a starting offer to women that’s 50% higher than the one he makes to men? That would probably alleviate the disparity, but I do not know if that would be legal, let alone ethical, and almost assuredly would not be approved by the company.

Should he go against company policy and bump his second offer far beyond what he is allowed, to a level a man would usually ask for? This would certainly not be approved by the company and would likely have him reprimanded or removed from the position.

You do mention one concrete action that can be taken: “adopting a no-haggle policy can mark you as the place for smart women to be”. However, this policy is not up to the hiring manager, and even if he, specifically, practiced it (and somehow didn’t get sacked), other hiring managers wouldn’t, and there’s little he can do beyond suggesting to HR that they adopt it.

So, again, would exactly would you have the “concerned hiring manager” do? What, that is WITHIN HIS POWER, is he able to do…aside from give advice to women that they shouldn’t accept the shit offers?

What can HE DO to stop discriminating?

The problem here is that while the policy might be discriminatory — and that’s not actually a slam dunk, which I’ll get into later — the manager is not discriminating. The manager is applying the policy equally, regardless of whether the person is male or female. If a man asks for less, the manager isn’t going to bump up his salary because he’s a man and all. He’ll give him less. And if a woman asks for the higher rate, he’ll follow the policy and that to her. The policy as written, in fact, is precisely and completely non-discriminatory. Given the upper limit on salaries, you give the person what they ask for or are willing to settle for. The suggestions that rpjohnston listed are all actual cases of discriminating, treating women differently than men because they’re women and because of an impression of what their tendencies are. So, in those cases, the solution to a policy that does not discriminate is … to implement one that does. Since equality of opportunity does not equal equality of outcome, the fact that a completely gender-blind policy runs into issues because as a rule women don’t do certain things may not really be a concern.

Now, Zvan points out a potential problem, which is that there may be more of a potential penalty involved in women negotiating more aggressively than there is for men, meaning that if women do negotiate more aggressively they’re more at risk for not getting or losing their jobs than men are. I’m not sure that the study she cites has been replicated or that it has identified why that is the case. For me, it seems reasonable that this extra social cost is generated because it’s unusual or unexpected, and that’s always a bit off-putting. Which means that if women don’t negotiate aggressively because they expect it will cost them, all that does it make it even more unusual that they will negotiate aggressively and thus make it so that it will be seen as even more unusual, and so wash/rinse/repeat. Despite this being pretty much the only real argument Zvan makes for this policy being discriminatory, her solutions don’t do anything to address that perception. Instead, her solution is simple: introduce no-haggling policies and remove negotiation entirely. Which she basically defines as paying based on the job description and on your performance. I think, anyway. Here’s a quote from the comments that might outline this:

A woman should get paid the same wages for the same work as a man. Negotiation, as already addressed in the updates at the bottom of the post, doesn’t accomplish that. That’s not a “right”. That’s discrimination.

So, the issue — as has been seen in pay equity disputes — has been to define “same work”. Let me use the example of the software design field to demonstrate how this is a problem. Technically, any two software designers do mostly the same work, as their job descriptions usually tend to be close once you filter out specific areas. The problem is that that’s just valuing what they do, and in general software designers aren’t valued for what they do. They’re valued, instead, for what they know. You can take two software designers at the exact same level, with the exact same performance, even in the same group and discover that one of them is, in fact actually worth more to the company if they know something that no one else does. COBOL programmers, for example, are worth their weight in gold because, well, there aren’t that many of them around and there are a number of very critical software systems that are written in COBOL. If you are hiring in general, you are more likely to value a Java programmer over a COBOL programmer because they already know the technology you are likely to be using and are more “in-date” than the COBOL programmer, but if you really, really need a COBOL programmer you will be willing to pay out the wazoo for them to get one. This is partially market driven and partially internally driven, but may result in COBOL programmers with lower performance ratings and less experience and skill getting far higher salaries than those who are Java programmers. And this, due to circumstances, is totally fair.

And while you can massage Zvan’s message to include those sorts of market considerations, you can’t do that to cover cases where someone is more valuable because they happen to know things about your own product that others don’t. If you have a critical piece of your software and you have one main expert on it who knows exactly how to fix anything in it and add new features to it, that person is more valuable to the company than someone who might have higher performance reviews or have more experience elsewhere. As such, you’re willing to pay more to keep them, and so they might have a higher salary than others.

The main criteria in these cases is “replaceability”. Can you live — or how easy is it for you to live — without them? If you really need to hire someone with a specific and rare skill set, you’ll be willing to pay more to hire them than in other areas where the skill set required is not as specific and is not as rare. If you need to keep someone because, again, they have a specific and rare skill set that you need, you’ll be willing to pay more to keep them than someone whose skill set is not as specific and is not as rare. However, any intelligent company doesn’t just want to break open the bank and pay the most they’d be willing to pay (especially when it introduces discrepancies). What they want is to walk the fine line between paying so little that the person they need to keep leaves them and yet not paying more than that person needs in order to stay.

And that’s where negotiation comes in. The company pays its employees based on how replaceable they are combined with how much that employee wants in order to work for that company instead of going somewhere else. The more replaceable you are, the less likely you are to be able to negotiate aggressively can gain big gains on your salary, but the less replaceable you are the more aggressive negotiation will pay off for you. If someone who is irreplaceable points out that they have an offer from another company that’s twice what they’re making now, companies are likely to scramble to match it. If someone who is replaceable does the same thing, they’re likely to get a “We’ll miss you” in reply. And given a free market, people who are irreplaceable are always going to have this option, and only stupid companies would allow these people to get away because of an enforced “no haggling” policy.

So, for your top performers and your irreplaceable workers, this no haggling policy won’t be enforced anyway. They will always be able to open a negotiation to get more of what they want if they want to. So having everyone paid based totally on performance and responsibilities just isn’t going to happen. And remember, it is not a sign of a successful company that it pays all of its workers “fairly”, meaning exactly the same. Doing that doesn’t increase stock price, because it doesn’t do anything to help your bottom line. What is a sign of a successful company is keeping salaries under control and under a reasonable percentage of your revenue, and not overpaying with respect to the market. What this means is that if you can pay an employee less and keep them happy, business-wise that’s what you do. Now, in general, large companies have standardized pay scales for a couple of reasons. The first is that it’s just easier on everyone; you can do the math mechanically without having to even get into major details of performance and job. The second is that people tend to get upset if they find out that you are paying other people more than them, and people do find out even if you tell them not to tell. But no matter what, those pay scales are going to have discretionary workarounds built right in for all of the exceptional cases we’ve listed, and that means that it will always be the case that the people who ask for higher salaries are going to have higher salaries than those that don’t. If you are in a field where you are needed and can reasonably negotiate for a higher salary, you will be able to negotiate for that salary by threatening to leave if you don’t get it. Period. And any business that doesn’t have this sort of policy will quickly find that either they lose all of their irreplaceable people or, alternatively, that the only people who stay are those who aren’t interested in aggressively negotiating their salary, which good be either good or bad. Either way, they’ll lose a number of really good people if they stick to this sort of policy, or else they’ll overpay most of their employees.

So, when Zvan says this based on her HR consultancy experience:

What do you think “fixing” salaries entails? I work for an HR consultancy. Our business is understanding this stuff. We don’t do negotiation because it’s a lousy way of paying for performance, which should be how labor is differentially valued if we’re going to value it differentially. Negotiation is differentiating pay based on something completely irrelevant to the work involved, as has already been pointed out.

I wonder if she is really aware of how the world works, and how she’s defining “negotiation”. It is incredibly unlikely that there is no negotiation involved in their offers, even if it’s just for, say, relocation expenses. Has it never been the case that she’s had an offer sent to someone who was ideally suited for the job who came back with a “This company offered me this; I’ll work for you if you beat it”? Has it never been the case that the person they offered the job to looked at the offering salary and said “This isn’t enough to get me to leave my current job/move out there/change my responsibilites, but for more I would”? I find that highly unlikely, which suggests that either her consultancy does negotiate in these cases, they only work in fields where the prospective hirees have absolultely no real power, she works only with unions (where these things are set by union-level contracts and negotiations) or they vastly overpay. Or alternatively, she only works with the formal “pay scale” approaches and remains blissfully ignorant of all the exceptions that sneak into her nice little orderly world.

The really sad thing about this is that Zvan is essentially being sexist to make her case that negotiation should be removed. It’s based basically on the idea that requiring negotiation is discrimination because those poor women just can’t negotiate, and so we have to help them out by eliminating it completely. The immediate intelligent response to that sort of argument is to ask why Zvan thinks that women can’t learn to negotiate; surely they can learn to do anything else required, so why should this be sacrosanct? And then it starts to look like Zvan is more interested in eliminating negotiation than in helping women, and is using this as an excuse to do it, and so as such it really appears like she doesn’t actually want to solve the problems — women asking for less, and having more social punishment if they ask for more — but instead wants to push her own agenda, possibly of legally mandated completely identical pay across the board, without any consideration for business realities. This should make one suspicious.