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http://www.hreonline.com/HRE/images/PeterCappelli106x106.jpgKnowing When to Ask

 

Monday, November 5, 2012
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When it comes to figuring out why women as a group earn less than men, the evidence has always been messy. But a new study has uncovered differences in how men and women respond to wage information.

 

One of the most widely discussed issues in the workplace is the fact that women earn less than men. The figure of 60 percent pops up a lot, suggesting that women make only 60 percent of what men make.  Once we compare women and men in similar jobs with similar education, experience and so forth, the gap shrinks a lot, with women earning about 90 percent of equivalent men's pay. Still, given the legal requirements to pay equally, the social pressures to do so and that this affects half the population, the fact that there is a gap at all matters.

Perhaps the most popular explanation as to why women earn less -- especially in the management and executive ranks -- is the idea that men demand and negotiate for higher wages while women are reluctant to do so. "Women don't ask," as the well-known book by Linda Babcock says. Anecdotes seem to support this, and it is assumed to be true in the popular press. There is also research-based evidence to support it, including surveys asking what men and women do with respect to salaries. It certainly would seem to matter for managerial and executive jobs, which are often the focus of media attention.

The problem is that evidence is always messy, and drawing conclusions therefore becomes complicated. For example, when we ask men and women how they handle salary issues, they are not always in the same jobs, and the women in a given job may not be identical in terms of qualifications to the men in that same job. Do we know whether women are disproportionately in jobs where salary negotiations are less accepted? There is some evidence that this has been the case historically. (We may be inclined to think salaries are always negotiable, but the evidence suggests otherwise: You can always try, but employers can also say no.)

So researchers Andreas Leibbrandt and John A. List ran an experiment in a field setting in which they posted 18 job advertisements across cities in the United States for administrative assistants and received about 130 applications for each. After receiving initial inquiries, the researchers offered more information about the job, including the wage for the position. For one subgroup, they added that wages were negotiable while for the other group they did not say whether they were. They very carefully controlled for various attributes among the applicants in order to see whether there were differences in how men and women responded to the wage information.

One result of the study that may be a bit surprising to people in human resources is that, even when wages were said to be negotiable, not that many people actually tried to negotiate: less than one in four.  One caveat to this finding is that the negotiations in this case were only in the first stage of interaction, where the applicant was replying in writing to the information about salaries. It is possible that those who did not ask for higher wages might try to do so later.

The big finding is that, in the context where wages were negotiable, women were actually more likely to ask for higher wages, although the difference with men was small. Where it was not clear that wages were negotiable, men were much more likely to ask for a higher wage.    

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OK, what do we learn from this? I suppose it depends in part what you were expecting. It is evidence against the general idea that women are less likely to ask for higher wages. The conclusion here is that context matters a lot. Women are less likely to negotiate when it is not clear that negotiations are appropriate but they are more likely to do so when it is expected. 

Is this a bad thing for women? Again, the answer is more complicated than we might think. It is not always a good thing to press for higher wages. It is something of a gamble. We know that in the world of applicant-tracking software, asking for a wage above what the employer is offering will get you kicked out of the applicant pool. So when we survey men and women about negotiations for pay in their current job, we never see those who did not get a job because they were pushing too hard on the wage front.   

Nor is it always an unambiguous "win" when you negotiate a higher wage and get the job if the boss concludes as a result that you are greedy or that your increase caused a problem elsewhere in the workplace.

Maybe knowing when to negotiate is pretty important. 

Peter Cappelli is the George W. Taylor Professor of Management and director of the Center for Human Resources at The Wharton School. His new book is Why Good People Can't Get Jobs: The Skills Gap and What Companies Can Do About It.

 

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