Think negotiating for more money is petty? Hope you like your job
By Jory Des Jardins on February 19, 2007
BlogHer Original Post
A study was conducted by economics professor Linda Babcock at Carnegie Mellon Universtiy with recent graduates of the Tepper Business School. The study found that starting salaries of male graduates were 7.6 percent higher than the females'.
Scandal? Not really. Digging deeper, Babcock found that, of the graduates surveyed, 57 percent of the men negotiated for a higher salary, but only 7 percent of the women did. And of the graduates who did negotiate, they increased their salaries 7.4 percent--nearly an identical discrepany to the difference between men's and women's salaries.
Before we start storming the corporate tower screaming discriminiation against women in the workplace, we must take a good, hard look at ourselves and consider our individual behavior. This was the message I learned at Stanford Business School professor Margaret Neale's presentation at the Invent Your Future Conference earlier this month. The primary lesson I learned that day: To get more, women need to ask.
Last summer I wrote about a typical symptom of successful women, the underlying fear that we are selling out, asking for too much by attaching a price to our work. When we're offered to be paid for our thoughts, suggestions, or influence, we don't ask questions. Many women come from an inherent place of gratitude for getting any monetary "credit" at all.
Then there are those women who know their work is valuable and demand proper compensation, but they don't negotiate beyond immediate value. An example would be a rising film star who gets her first $5 million movie and, so excited and grateful for the huge nod by the film studio, doesn't negotiate any royalties. She thinks, it's already so much money, why nitpick over little things. Why nickel and dime people?
There's something almost noble about the way we don't try to quantify our impact, but, as Neale pointed out so powerfully, there's something quite stupid about it, too. We don't know it's stupid, though. As I like to say when I refuse to argue about money, "it all comes out in the wash." Neale showed that, over time, actually it doesn't.
She used a simple mathmatic example: A man and woman graduate from business school and take a job at the same company for the same salary, $100,000, only the man negotiates for a higher amount and starts at $107,600. The woman thinks, "Big whoop, seven grand. When I retire it won't make a difference." Both the man and the woman get five percent yearly raises, and both expect to retire at age 65.
"How much longer must the woman work to make up for the amount she didn't negotiate?" Neale asked the group. The answer: Nine years.
Suddenly my arguments about refusing to be petty about money began to dissipate.
Neale then threw out another scenario, in which the man negotiates an annual raise that is one percent higher than the woman's. How long do you think it would take the woman to recoup pay in this case? Forty seven years.
"Hope you like your job," Neale said.
Denise Brosseau, who co-founded the Invent Your Future organization, and who invited Neale to present, recently guest blogged about her own experience as a manager who realized she, herself, was paying women less:
In the mid-90s, when I was managing the product development department at a Fortune 500 company, I found that I was paying the men who worked for me more than I paid the equally qualified women. As a longtime feminist, this was a shocking moment for me, but it serves to underline an important truth. The men on my team regularly asked for more money, they expected to make more money, they came to me with all the reasons they should make more money and sometimes they threatened to leave if they didn't get it. In most cases, the women did none of those things. They were content with a title change, different work responsibilities or more time off. And, with a limited budget and a sincere desire to keep my team together and happy, I paid the men more to keep them. Not only was it clear that the women were settling for less, I was now part of paying them less. For the first time, that 77-cents statistic was no longer something I could blame on men.
Hearing this, you might feel like marching to your HR office and demanding to right the wrongs you've commited to your future financial outlook, but this is where discrimination actually does apply.
And data shows that hiring managers are likely to be more turned off by women who ask for more money than by men who do. But get this: FEMALE hiring managers are more turned off by it than men.
This could be because women may be imposing their own issues with asking for more money onto female candidates, Neale says. But with this reality in mind, how do women get what they need out of negotiations?
Like it or not, women must ask, but they must ask nicely. Yes, just when we are told not to be nice we need to do so with a smile. It angers me that women must be much more calculating in approach, but jugding by the data this is still the most effective way of getting more.
How, exactly, does "being nice" look?
Women are more collaborative in personal style than men, Neale explained. Rather than asking for more because, dammit, "I deserve it," we are better off asking for more because we seek more for our families, or for something important to us.
Neale used a great example of a colleague of hers who was offered a job at another university for much more money but who wanted to keep her current job. Neale advised her colleague not to storm into the dean's office demanding more money, but rather to appeal to the supervisor's sense of collaborative problem solving.
"I told her to walk into his office and say, 'I have a problem here. I've just been offered another position for considerably more money; however, I really love working here. I want to stay. Do you have any suggestions for how we can make this work?'"
Brosseau offers up an insight into the female psyche. After speaking to college students about negotiating, she noted that one of the most common responses was "If I don't need more money, because what I am making or what my husband and I are making is enough for what we need, is it really right to ask for more money?"
My answer to that was an unequivocal "YES!". Not just because your colleagues are going to measure your worth by what you are earning and might respect you less for not asking. Not just because of a knee-jerk feminist reaction to unfairness. I would argue that the most important reason to make more money than you "need" is that the world is full of terrible problems that you might be able to fix if you had the money to put where it is "needed."
Once again, by tying the need to something other than ourselves, we can adjust our attitudes toward asking for more.
Another thing that's counterintuitive to women when they negotiate is to offer up more information, thinking that by doing so we're opening the kimono too wide. We have all been in a situation like this one: a hiring manager asks what you are looking for, salary-wise, putting you in a rather uncomfortable position strategically. You say to yourself, "will I lose the opportunity if I go too high?" But if you lowball yourself and get the job you'll be in a place of resentment.
In cases like these we, and the hiring manager, keep our cards very close to the vest, hoping someone else will flinch, or until the subject becomes inevitable. In some cases it makes sense to hold out, Neale says, but typically it's best to offer up information, to give the other party other ways that they may make it worth your while.
We'll use this principle in the following sample discussion:
Here is a classic standoff. There's no movement unless either Sandy or the hiring manager break. But Neale recommends another tactic--keeping the conversation moving.
Sandy: Well, I can't afford to be paid less than I am now, but perhaps there are other ways that I can be compensated. I plan to get my licensing requirement in the next year. I know that the classes will be costly...
Taking this route, Sandy is giving the hiring manager other possibilities for helping her get to her desired value. Perhaps Sandy is also interested in a quicker promotion review, or child care, or flex time. These are other areas that fall into negotiations. And it puts the onus on the other party to be creative.
I apply the same priciple to business development discussions. Typically both parties have different pain points--areas they can concede without damaging their bottom line. In a successful negotiation, the two sides find these places of concession. I have no problem saying to the other party, "Here's where I can't go, but here's where I have some flexibility. If you can help me figure out how to do X, without doing Y, I'm game. In most cases the negotiating party figures out a plan. When I'm the negotiating party I enjoy the process of problem solving.
But I can't solve a problem if the other party won't open the vest. Nothing frustrates a salesperson or alliance manager more than a prospect/client/negotiating partner who says no, end of story. Despite common thinking, there is no power in this position, no room for innovation.
But understand a key distinction between avoiding pain points and creating new ones. I can feel a bad negotiation in my bones when a concession opens a new issue. Often negotiating partners come to me with "concessions" that would require resources from other areas of the business, or that don't align with the fundamental direction.
For women this can happen when we see that our negotiator is taking considerable time to think of scenarios to make something work, and we agree to terms more as a reward for their effort than because the negotiation was a win-win.
In life we don't typically go into any negotiation with the intention of saying no. We hope to get what we want, at a "cost" that is minimal, or at the very least emotionally/financially/energetically affordable. But if we don't get to this place in a negotiation that's OK--there's nothing wrong, unless you agree to something that, in essence, doesn't work.
In other words, sometimes the best way to yes is to say no.
Jory Des Jardins also blogs at Pause, and Fast Company Experts Blog.
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