New Reddit interim CEO Ellen Pao—fresh off losing a high-profile sex discrimination lawsuit against her former employer—has announced that on her watch, the user-generated Web news organization will no longer negotiate starting salaries with new hires.
The reason: To make the workplace fairer for women.
Pao believes the practice of negotiating starting salaries contributes to pay inequality.
“Men negotiate harder than women do and sometimes women get penalized when they do negotiate,” she told The Wall Street Journal. “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.”
A joint study by researchers at Harvard and Carnegie Mellon Universities found that men respect men who ask for higher salaries, but react negatively to women who engage in the same behavior.
In Pao’s view, this deep-seated, emotionally driven double standard for workplace behavior traps women at the lower end of the pay scale. Men are rewarded for being aggressive while women are penalized for it.
Taking negotiation out of the hiring process and basing pay on experience and job duties alone may create a more level playing field by eliminating emotional and often subjective components from the process.
Advice: It may be worth considering nonnegotiable pay rates for your new hires. If you go that route, you will need to be especially careful about your price point. Set it too low, and you could lose great candidates to employers that give themselves more salary flexibility.