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Reddit CEO Ellen Pao Bans Salary Negotiations To Equalize Pay For Men, Women
sabri points out that Reddit CEO Ellen Pao plans to ban salary negotiations in an attempt to equalize pay for men and women. "After losing a sex-discrimination lawsuit in Silicon Valley last week, Ellen Pao continues on her crusade to bring gender equality to the tech world, but this time with a focus on her home turf. As Reddit’s interim CEO, Pao said she wants to eliminate salary negotiations from the company’s hiring process. In her first interview since the lawsuit, Pao told with the Wall Street Journal Monday that the plan would help level the playing field. 'Men negotiate harder than women do and sometimes women get penalized when they do negotiate,' she said. '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.'"
I think that in the end they might make it harder for themselves to recruit talent.
E.g. they find a really talented person who already has a job, but they REALLY want THIS person, so they make an offer. This person already makes at or near the amount offered, so he/she wants to negotiate for more before considering taking the position. End result is they don't acquire the talent they want and settle for something else.
I personally haven't tried to bargain for more, but I'm still rather fresh out of college so I've been rather satisfied with the offers I've received.
> I thought the mantra of the Democrat party was equality through mediocrity?
Some Democrats do this, yes. Some Republicans believe in ~~equality~~ fuck you, I got mine. I'm not sure which is worse.
You can't suddenly make mediocre people good at what they do, so the only way for the left to enforce equality is to make the good people mediocre.
I read an autobiography some years ago by a woman who was in the Chinese Army in the 70s or 80s, and one thing that particularly stood out was the part where she wrote about how she had to deliberately shoot badly on the shooting range, because anyone who could shoot well would be punished for making the others look bad.
That's 'equality' red in tooth and claw.
This reminds me of a policy that was caused the closure of Computer Science labs between 2AM and 6AM. The justification went something like this;
There are women who are afraid to be on campus late at night and therefore will not access the computer labs during that time. If men have access to the labs at that time they will have an unfair advantage in completing their work. Therefore to keep access equal the labs will be closed
It lasted about two months until they got security cameras in the labs. I think that was a face saving thing as many women on campus were upset about the closure too. This is the same faculty that shut off the phones in the labs because they could be used to make long distance calls (with some work). They forgot that those same phones could be used to call security if needed. This whole idea of making everyone equally bad is just stupid.
Apparently Reddit must suck already for women. Most places pay men and women the same, on average, for the same job with the same level of experience. It's in over $200K jobs where a disparity still exists, which is the CxO level, mostly (or if you ignore factors like type of job or years of experience and just compare headcount or age).
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
You're a funny guy. She tried to sleep her way to the top and then sued her employer when she failed. Her husband is in court over claims that he ran a Ponzi scheme. Who's spinning who here?
The gender wage gap is a myth. When you control for all the extraneous variables, men and women are paid the same. The reality is that men are paid more because they are willing to take uglier, riskier jobs, move longer distances for them, work longer hours, have more experience and qualifications in occupations with stronger demand, are willing to demand higher salaries, and are less likely to leave their career tracks for family obligations. Sorry to burst your politically correct bubble.
http://www.amazon.ca/Why-Earn-More-Warren-Farrell/dp/0814472109/
The wage-gap argument doesn't even make sense. Just imagine if a company could get the same productivity out of women and pay them 30% less. It would have an enormous competitive advantage over every other company in its industry and all the companies would quickly be forced to either hire all women themselves or go out of business, not because of any misguided government interference, but purely because of overwhelming free-market forces. The same argument applies for women in the boardroom. If they gave a company a distinct competitive advantage, every company would already be forced by the market to have lots of them.
if the ability to negotiate aggressively is not a talent required for the job,
Aggressively is how the person eliminating negotiations framed it. The negative light is not surprising seeing as she obviously wanted to get rid of the practice.
How does this work? Does Reddit give the same offer to all employees for a given job title? If so, and they make a single offer better than the market initial offer, they'll be paying non-negotiators more than they have to, and losing the best negotiators. This is likely to be costly.
If they make the same offers they made before this policy, they'll lose negotiators to other companies. If negotiation is correlated with skill this is a loss; otherwise, it could be a loss or a win.
If they make an individualized offer to each employee, negotiation will happen anyway; it'll just happen without explicit haggling. Candidates will try to signal that they'd require a lot to accept, in order to get a higher offer. I'd bet that candidates who would negotiate are probably better at that kind of signaling.
There was a Planet Money story about this.
A company decided to make everyone's salary open knowledge, posted on the wall for everyone to see.
This would better solve gender pay equity than Pao's no-negotiation strategy. It puts more pressure on management to limit pay decisions to something defensable, prevents employees from pitting against each other for pay and minimizes management's ability to overpay or underpay. Employees know where they stand relative to other employees (and what they may need to do to make more). It motivates better paid employees to show they're worth it and makes it harder for well-paid employees to goldbrick.
The problem with no-negotiation is that for any given hire there are a finite number of employees available to take the job and the best candidate is likely to either be a little better or a little worse than average. Without the ability to negotiate, the better candidates will be less inclined to take the job because it only offers average pay and the below average ones will be more likely to take the job because it pays above what they're worth. You'll end up trending towards below average talent for more than they're worth.
Transparency allows for positioned to be negotiated for and if a given hire has an above average skillset and experience, you can agree to pay them more and won't have to worry about justifying it. The same is true the other way around -- it's justifiable to pay below average, too when you have legitimate reasons of skill or experience.
Pao's strategy is right out of the socialist playbook -- arbitrary price controls, and it destroys the free market's ability to seek efficient pricing. This isn't a political complaint, but an economic one. Most current job markets with "secret" pay agreements now are also bad because they create an imbalance between seller and buyer by eliminating pricing information.
It's also pretty sexist because it attributes a behavioral attribute to gender. I'm pretty sure Carly Fiorina, Meg Whitman, and other Fortune 500 CEOs don't have a negotiating weakness.
"If the ability to negotiate aggressively is not a talent required for the job, there is no reason why someone who negotiates well should get a higher salary."
Maybe you are right.
But how funny that the "solution" this CEO proposes to avoid negotiation is "I'll make an offer and you'll take it" instead of, say, "you'll make an offer and I'll take it".
"What does a negotiation accomplish?"
Last I reviewed, a hiring contract is still a contract. You know, that stuff about "meeting of the minds", "consensus ad idem", "mutual assent"...
And this specific kind of contracts are basically about exchanging labour for *money*. It's difficult to reach that "meeting of the minds", "consensus ad idem", "mutual assent"... about the exchange of labour for money when one party is void to bring the issue about money onto the table. Oh! and how convenient for the hirer while, at the same time, inconvenient for the hiree.
I dunno. Sounds to me like a good way to weed out sociopaths.
The world's burning. Moped Jesus spotted on I50. Details at 11.
When is the last time you negotiated prices at the grocery store? Yes, there are places where you can do so, but the prices then get determined almost entirely by the relative skill of the hagglers, rather than the actual value of the merchandise. "Market pricing" is an almost completely unrelated phenomena determined by the intersection of supply and demand curves for commodity-scale trading.
Of course there are other options as well to try to get the best of both worlds - transparent salaries for one: put everybodies salary on their name plaque and you'll get a lot of disgruntled workers if you let Frank' superior haggling skills earn him a substantial pay raise, despite him being the office slacker.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
If I did negotiate and get a much larger salary than someone with the same skills as me, isn't that unfair and selfish?
No... what's unfair and selfish is that the employer is taking unfair advantage of the other person by accepting their work and not paying nearly as much as they are willing to pay for that kind of work.
In other words, the company is exploiting them for more than the company's fair share of the profit from their work.
And you with your negotiation stood up to them and avoided that level of injustice.
It's selfishness and unfairness; sure, but not on your part... on the employer's part.