A Brief History of Gender and Salary Negotiation

A Brief History of Gender and Salary Negotiation

Negotiation is a bilateral decision making process in which two parties with different intentions work together to find a mutually agreeable solution. This May when college seniors graduate, they will enter into one of the most important negotiation processes in their lives; salary negotiation. Starting salaries are extremely important, since "salary increases are commonly awarded as percentages," and "generally becomes the basis for other forms of compensation (e.g., pensions, profit sharing, stock options). Additionally, the impact of starting salary in one company can be carried over to others through the common practice of setting salaries for experienced workers in relation to their previous salaries of base pay."1 This places a large significance on the success of the graduates to negotiate the most beneficial salary for them or to risk remaining at an earnings disadvantage for the rest of their careers.

However female college graduates enter the negotiating table already at a disadvantage. Despite being able to negotiate larger salary increase percentages relative to men, female salaries are lower than men because, "these losses, which continued to accumulate throughout the women's careers, were largely attributable to a one-time starting salary disadvantage."1 This discrepancy has not gone unnoticed by society and governments around the world have worked to draft legislature to prevent this from occurring. The United States passed the Equal Pay Act in 1963 which made it illegal to pay men and women different rates for the same amount of work on jobs that require equal skills in the same conditions. Similar legislation has been passed in many European countries such as the United Kingdom, France, and Ireland. Most recently President Obama signed the Lilly Ledbetter Fair Pay Act of 2009 which reset the statue of limitations on filing a lawsuit for pay discrimination 180 days with each discriminatory paycheck.

Prevalence and Importance

The prevalence of the wage gap and the class ceiling phenomenon emphasizes the need to investigate the differences in the way men and women negotiate, especially when it comes to pay expectations. These differences that exist in negotiation could be because of the lack of awareness and consideration focused to the topic. There are a number of contributing factors that affect the outcomes of pay negotiation. "One gender difference likely to affect pay outcomes is men's consistently higher pay expectations."2 Explaining these differences to men and women inside and outside of the workplace would be a progressive step toward ending these outcomes.

A great deal of gender differences in pay negotiation comes from the expectations of outside sources and with personal potential, whether its confidence or lack of confidence. Pay inequality has been a continuing issue for dozens of years, regardless of the Equal Pay Act, which is a large reason as to why men assume they deserve a higher pay than women. Another stereotype men uphold in regards to higher pay is the assumption that women will not perform a job as efficiently as a man, which subsequently leaves women believing they themselves cannot perform as efficiently as men. Since these stereotypes have continued to play out through the years, it has almost become anticipation in pay negotiation.

When it comes to using a comparison in pay negotiation, both genders use same-sex assessments to explain pay expectations, which leaves no room for improvement. The importance of learning the difference gender has in pay negotiation is for both men and women. "If women and men differ in their negotiation skills, abilities, and styles, knowledge of these differences could provide practical recommendations for organizations seeking to train a more gender-diverse workforce, as well as provide individuals with knowledge necessary to facilitate communication and understanding between the sexes."3 Since the Equal Pay Act has been passed and altered and re-passed, we must look outside the law on changing these stereotypes tided to how gender plays such a large role in pay negotiation.

The importance exists because stereotypes shouldn't leave women thinking they, themselves, cannot perform as competently as men. The differences in what shape our decisions and actions are completely individual. However, knowledge and explanation of these topics remain a very imperial part of any negotiation situation. "As greater numbers of women advance into upper level positions in organizations it is increasingly important to have an understanding of how gender impacts the behaviors, processes, and outcomes of negotiation."4 The way to reach out to organizations is