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Reddit CEO Ellen Pao: Fair Pay by Nixing Salary Negotiations

Topics: Negotiation

After a jury recently dismissed her discrimination suit against venture capital firm Kleiner Perkins, Ellen Pao said, “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it.” In her current job as interim CEO of Reddit, she’s fighting to narrow the gender wage gap by ending salary negotiations during the hiring process.

on a dime 

(Photo Credit: JD Hancock/Flickr)

“Men negotiate harder than women do and sometimes women get penalized when they do negotiate. So as part of our recruiting process we don’t negotiate with candidates,” Pao tells The Wall Street Journal. “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.”

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It’s an unusual move. Generally, conversations around women and salary negotiations tend to focus on the fact that women are less likely to negotiate salary, and more likely to describe themselves as being uncomfortable discussing money in the first place. The message, usually, is that if women speak up, they’ll be rewarded – and if they don’t speak up, well, it’s their own fault that they don’t make the same salaries as men. The problem is that the evidence supports a different conclusion.

“The research evidence is overwhelming that men tend to negotiate more aggressively than women,” says Adam Grant in an interview with Mashable. Grant is a professor at Wharton who works with Sheryl Sandberg on her Lean In project. “The data are also clear that when women negotiate assertively, they are often penalized for violating communal gender stereotypes.”

Women are forced to walk a fine line. Be too aggressive, and they’ll be perceived as unlikeable, and punished accordingly with a smaller salary, less job security, and less support from colleagues; be insufficiently aggressive, and wind up stuck with the salary companies feel like offering, which may well be less than what they offer men.

Only time will tell if Pao’s system levels the playing field at Reddit while securing the talent they want to hire. Even if banning negotiation proves to be other than a shining success, thinking a little bit differently about how to end the gender wage gap can only be a good thing. One thing is for sure: what companies have been doing so far isn’t working – or at least, isn’t working fast enough.

Tell Us What You Think

Do you think ending salary negotiations would improve pay equity? We want to hear from you! Leave a comment or join the discussion on Twitter.

Jen Hubley Luckwaldt
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Re: Women are “more likely to describe themselves as being uncomfortable discussing money in the first place.” Some of the dynamics that help set the stage for a wage gap to be created: -Men and women generally have a different psychology regarding money-making. The main difference is that far more women than men can detach earning an income from their self-worth. In marriage, men are expected far more often than women to be either the sole or primary provider. Hence… Read more »

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