GENDER IN JOB NEGOTIATIONS THREE THINGS TO REMEMBER HANNAH RILEY BOWLES INTERNATIONAL WOMEN’S DAY 2012 THE HELLER SCHOOL, BRANDEIS UNIVERSITY Collaborators:

GENDER IN JOB NEGOTIATIONS THREE THINGS TO REMEMBER HANNAH RILEY BOWLES INTERNATIONAL WOMEN’S DAY 2012 THE HELLER SCHOOL, BRANDEIS UNIVERSITY Collaborators: May Al Dabbagh, Linda Babcock, Julia Bear, Lei Lai, Kathleen McGinn, Bobbi Thomason

International Women’s Day “It is an occasion for looking back on past struggles and accomplishments, and more importantly, for looking ahead to the untapped potential and opportunities that await future generations of women.” United Nations Womenwatch

Why Negotiation?  Negotiating the Path to Leadership  Negotiation is an essential process for gaining resources and opportunities for the attainment of leadership positions.  Potential leaders negotiate to…  Seize opportunities to expand their authority  Gain recognition and rewards  Overcome barriers or challenges

3 Ideas on Gender & Negotiation #1 Women have less opportunity than men #2 Ambiguity heightens potential for gender effects #3 Gender in negotiation is a two-level game

Idea #1  Women have less opportunity than men to negotiate for career advancement Social Networks Influence access to information and career support Gender Stereotypes Inhibit women more than men from self-advocating in negotiations

Negotiating Pay F(1, 111) = 4.80, p =.03 Bowles, Babcock & Lei (2007, Study 1) * *** Idea #1 Unequal Opportunity

Negotiating Pay F(1, 111) = 4.80, p =.03 Bowles, Babcock & Lei (2007, Study 1) Social Cost for Men * *** Idea #1 Unequal Opportunity

Negotiating Pay F(1, 111) = 4.80, p =.03 Bowles, Babcock & Lei (2007, Study 1) Social Cost for Women Social Cost for Men * *** Idea #1 Unequal Opportunity

Global vs. Local Studies conducted in Arab Gulf— Saudi Arabia (KSA) and United Arab Emirates (UAE)  Rapidly globalizing region  Foreign workers >80% private-sector jobs (Arab Labor Organization, 2010)  Private-sector Lingua Franca is English  Mission of “reform universities” is to prepare local graduates for the global workplace (selected in KSA; nationwide in UAE)

Global/Local Work Cultures

Negotiating Pay F(1, 111) = 4.80, p =.03 Bowles, Babcock & Lei (2007, Study 1) Social Cost for Men * *** Idea #1 Unequal Opportunity

Negotiating Pay F(1, 111) = 4.80, p =.03 Bowles, Babcock & Lei (2007, Study 1) Social Cost for Women Social Cost for Men * *** Idea #1 Unequal Opportunity

Global/Local Work Cultures Social Cost for Men

Global/Local Work Cultures Social Cost for Women Social Cost for Men

#1: Practical Implications  Individuals: Use your knowledge about gender stereotypes  “Relational Accounts” Employ legitimate explanations that Demonstrate concern for organizational relationships  Organizations: Do men and women feel equally comfortable negotiating? Bowles & Babcock (2011)

#1: Practical Implications  Individuals: How can you use your knowledge about stereotypes?  “Relational Accounts” Employ legitimate explanations that Demonstrate concern for organizational relationships  Organizations: Do men and women feel equally comfortable negotiating? Bowles & Babcock (2011)

#1: Practical Implications  Individuals: How can you use your knowledge about stereotypes?  “Relational Accounts” Employ legitimate explanations that also Demonstrate concern for organizational relationships  Organizations: Do men and women feel equally comfortable negotiating? Bowles & Babcock (2011)

Relational Accounts Research Examples  Supervisor Excuse Account  “My team leader during the training program told me that I should talk with you about my compensation. It wasn’t clear to us whether this salary offer represents the top of the pay range. My team leader told me there’s a range in term of how much managers are paid in their first placement. He thought I should ask to be paid at the top of that range and to explain that I would also like to be eligible for an end of year bonus.”

Relational Accounts Research Examples  Skill Contribution Account  [Negotiation Request] “I don’t know how typical it is for people at my level to negotiate, but I’m hopeful you’ll see my skill at negotiating as something important that I bring to the job.”

Relational Accounts Executive Examples:  Sheryl Sandberg strategy:  “This is the last time you and I are going to be negotiating across the table from one another, and you want a head of sales who negotiates…” Facebook COO Sheryl Sandberg

Relational Accounts Executive Examples  Senior executive finds for second time that a male subordinate is paid more than she is.  “I am confident this is just a mistake. The company does not want subordinates paid higher than their managers.”  Woman is asked to lead a diversity initiative  “How will be measure this initiative’s contribution to the bottom line?”  “If you want this position to have the authority you describe, then I think the compensation should be set at [X] level.”

Relational Accounts Executive Examples  Senior executive finds for second time that a male subordinate is paid more than she is  “I am confident this is just a mistake. The company does not want subordinates paid higher than their managers.”  Woman is asked to lead a diversity initiative  “How will be measure this initiative’s contribution to the bottom line?”  “If you want this position to have the authority you describe, then I think the compensation should be set at [X] level.”

Relational Accounts Executive Examples  Senior executive finds for second time that a male subordinate is paid more than she is  “I am confident this is just a mistake. The company does not want subordinates paid higher than their managers.”  Senior woman is asked to lead a diversity initiative  “How will be measure this initiative’s contribution to the bottom line?”  “If you want this position to have the authority you describe, then I think the compensation should be set at [X] level.”

Relational Accounts Executive Examples  Senior executive finds for second time that a male subordinate is paid more than she is  “I am confident this is just a mistake. The company does not want subordinates paid higher than their managers.”  Senior woman is asked to lead a diversity initiative  “How will we measure this initiative’s contribution to the bottom line?”  “If you want this position to have the authority you describe, then I think the compensation should be set at [X] level.”

Idea #2  Ambiguity heightens the potential for differential negotiation outcomes Structural Ambiguity Degree of clarity about zone of possible agreement and appropriate standards for agreement (Bowles, Babcock, & McGinn, 2005) Norm Ambiguity Degree of clarity about norms for appropriate negotiating behavior (Kray & Gelfand, 2009; Babcock & Bowles, 2009)

MBA Salary Outcomes  Controls  work experience, job function, prev. salary, job offers, non-compensation preferences, etc. Overall gender gap ≈ $5,000  Conditions  “Low Ambiguity” (70%): No gender difference  “High Ambiguity” (30%): $11,000 gender gap Idea #2 Ambiguity Matters

MBA Salary Outcomes  Controls  work experience, job function, previous salary, job offers, non-compensation preferences, etc. Overall gender gap ≈ $5,000  Conditions  “Low Ambiguity” (70%): No gender difference  “High Ambiguity” (30%): $11,000 gender gap (Bowles et al., 2005) Idea #2 Ambiguity Matters

Executive Compensation  Studies suggest gender differences in executive compensation are greater in non-standardized forms of pay  Bonuses (Elvira & Graham, 2002)  Equity (Lyness & Thompson, 1997) Idea #2 Ambiguity Matters

Idea #2: Practical Implications  Organizations: How does one learn what is negotiable?  More transparency is likely to reduce gender differences in negotiated outcomes  Individuals: Women especially need to reach outside of convenience networks for comparison standards.

Idea #2: Practical Implications  Organizations: How does one learn what is negotiable?  More transparency is likely to reduce gender differences in negotiated outcomes  Individuals: Where can you get the best information?  Reach outside of convenience networks

Negotiations with employers are contingent on negotiations at home (Bowles & McGinn, 2008). Idea #3: The Two-Level Game

Lilly Ledbetter’s Story  1996  Ledbetter received “Top Performance” award from company  1997  Ledbetter earned $44,724 in salary.  Lowest paid man doing same work earned $51,432.

Lilly Ledbetter’s Story  1996  Ledbetter received “Top Performance” award from company  1997  Ledbetter earned $44,724 in salary.  Lowest paid man doing same work earned $51,432. $0.87/$1

Lilly Ledbetter’s Story  1996  Ledbetter received “Top Performance” award from company  1997  Ledbetter earned $44,724 in salary.  Lowest paid man doing same work earned $51,432. 1996 Median Annual Earnings (U.S. full time, year round) Female = $32,515 Male = $42,261 $0.87/$1

Lilly Ledbetter’s Story  1996  Ledbetter received “Top Performance” award from company  1997  Ledbetter earned $44,724 in salary.  Lowest paid man doing same work earned $51,432. 1996 Median Annual Earnings (U.S. full time, year round) Female = $32,515 Male = $42,261 $0.87/$1 $0.77/$1

“Ricardo Hausmann, director of the Centre for International Development at Harvard University, said that, among the 134 countries covered in the report, 'we have found that gaps are closing between women and men's health and education... And yet only 60 per cent of economic participation gaps have been closed. Progress will be achieved when countries seek to reap returns on the investment in health and education of girls and women by finding ways to make marriage and motherhood compatible with the economic participation of women.’” Harvesting full potential of women in labour force Business Times Singapore International Women’s Day, March 8, 2012 The Global Gender Gap Report 2011 Ricardo Hausmann, Harvard University Laura D. Tyson, University of California, Berkeley Saadia Zahidi, World Economic Forum

Idea #3: Practical Implications  Organizations: Are work-life dilemmas on the table?  Individuals: How do I manage work-life conflicts?  Negotiate for long-run success  Create value to make work and life partners better off  Facebook COO Sheryl Sandberg: “Don’t leave before you leave”

Leadership Opportunity Idea #3 Two-Level Game  Major corporation selects two candidates for overseas leadership opportunities:  Man accepts within 48 hours  Woman still has not accepted Is she less interested? Less ambitious?

Idea #3: Practical Implications  Organizations: Are work-life dilemmas on the table?  Individuals: How do I manage work-life conflicts?  Negotiate for long-run success  Create value to make work and life partners better off  Facebook COO Sheryl Sandberg: “Don’t leave before you leave”

3 Ideas: Problems & Solutions  Women have less opportunity to negotiate than men  Ambiguity facilitates gender effects  Gender effects in negotiation are a two- level game  Reach out and use your knowledge of gender stereotypes to  Reduce the ambiguity  Create value in the two- level game PROBLEMSSOLUTIONS FOR WOMEN

3 Ideas: Problems & Solutions  Women have less opportunity to negotiate than men  Ambiguity facilitates gender effects  Gender effects in negotiation are a two- level game  Reach out and use your knowledge of gender stereotypes  Reduce the ambiguity  Create value in the two- level game PROBLEMSSOLUTIONS FOR WOMEN

Feedback and ideas are warmly welcome. hannah_bowles@harvard.edu Thank you!

GENDER IN JOB NEGOTIATIONS THREE THINGS TO REMEMBER HANNAH RILEY BOWLES INTERNATIONAL WOMEN’S DAY 2012 THE HELLER SCHOOL, BRANDEIS UNIVERSITY Collaborators:

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GENDER IN JOB NEGOTIATIONS THREE THINGS TO REMEMBER HANNAH RILEY BOWLES INTERNATIONAL WOMEN’S DAY 2012 THE HELLER SCHOOL, BRANDEIS UNIVERSITY Collaborators:

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