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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.'"
Penalising better negotiators is hardly a good thing regardless if it's trying to promote equality. Really all they're doing is saving money.
"Men negotiate harder than women do"
Let's punish people who are good at something! Diversity!
We come up with an offer that we think is fair.
That's a pretty poor negotiating strategy if you're trying to hire the talent you want rather than the gender you want.
Why wouldn't I spend the time to fly out and interview if there was a significant chance I wouldn't like whatever number it was that they considered 'fair' and I couldn't negotiate from there?
I should use this sig to advertise my book ISBN-13 : 978-1501515132.
Wouldn't the ability to negotiate be a useful skill for a Reddit salesperson?
Hulk SMASH Celiac Disease
"Men negotiate harder than women do"
So, she makes a sexist statement to defend not negotiating in order to eliminate sexism? Fail. Would she use the same claim to defend hiring men over women for positions which involve negotiating contracts?
"National Security is the chief cause of national insecurity." - Celine's First Law
I thought she was a little off, because of her battle with her previous employer. But this is ridiculous. According to the WSJ, she is personally vetting potential candidates for their attitudes on diversity, and if a candidate says "I am not concerned about diversity" or "I don't consider diversity important" then they don't get hired. And now this salary non-negotiation thing. No one of any value is going to interview there.
I suppose the ones who are already there are safe because if she starts firing, say, white men, she's going to eventually have a nasty lawsuit to deal with. But I know her type. She probably won't fire anyone; she'll just harass and hound them into quitting.
I can't believe Reddit wants this person as their CEO; she's going to destroy the company.
it's = "it is"; its = possessive. E.g., it's flapping its wings.
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.
"...I told her..."
See, there's the problem. If it was a male cashier, he would have negotiated. I hear they're better at it.
"National Security is the chief cause of national insecurity." - Celine's First Law
It means that in order for Reddit to be competitive in hiring, they will need to make a first offer (the fixed salary+benefits) that is at or above the market average. As a jobseeker, I can just look at what they have to offer and take it or leave it. No haggling. No drama. That sounds good to me! I'm decent at negotiating, but I don't enjoy it.
For jobs where negotiating skill is NOT part of the job, the negotiation ban should make hiring decisions better correlate with merit. And generally, I want to be surrounded with people hired for relevant merits, and not just good self-promoters.
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. The same skills that make for aggressive negotiation (affinity for conflict situations for example) may make a prospective employee perform less well in team situations.
An interview should give the employer a chance to describe the job and the prospective employee a chance to describe their relevant talents. Each side should then know the market value of the applicants skills with respect to the job. If the company's offer does not match the applicants pay requirement, them should part ways. What does a negotiation accomplish?
"He took a duck in the face at 250 knots." -- William Gibson, Pattern Recognition
Is this because woman are unable to negotiate as hard? Because they are unwilling to? Because they are too stupid to? What is her explanation? Is it hormonal? Does it have to do with having different body mass distribution? Inquiring minds want to know.
If it's to their advantage to negotiate hard and men and women are indistinguishable professionally, women obviously are just as able to negotiate hard (and, given negotiations I've been in, I have no reason to doubt they are not just as capable at this art).
Pao is really insulting women by saying this.
This really opens a Pandora's box. If she thinks women, by virtue of being female, are not as good at this important aspect of professional life, one wonders what other parts of their professional lives women are not as good at. She should give us a complete list - who knows what might be on it.
I wonder what would happen if she ran a purchasing organization or a sales organization. Usually the willingness and capability to negotiate effectively (and, therefore, hard) are basic job requirements for these positions. Would she refuse to hire women because, as she has stated, they are not as good at negotiating hard (ouch, there's a sexual discrimination lawsuit waiting to happen)? Would she refuse to negotiate salary and lose the very people who would negotiate effectively on behalf of her company? In reality, negotiation is always a part of almost any senior job -- you have to negotiate for headcount, resources, approval for projects, even convincing a customer that they don't need something is "negotiating".
Perhaps she has realized that she (the individual, not the gender) is not good at negotiating and this is a convenient way to avoid acknowledging this reality.
Perhaps she doesn't realize that no party to a successful negotiation goes away unhappy - does she lack confidence in herself and her own staff being able to negotiate successfully?
If Reddit has a candidate they really want and offers them $180K and they get an offer from another company for $200K (assuming similar fringe benefits and option valuations), how is it good for the company to walk away from the candidate instead of negotiate? Both $180K and $200K may be "fair" offers. Just because her company didn't happen to guess precisely what the FMV was for the person will she really stubbornly refuse to negotiate and start over from ground zero in trying to fill the position (which will likely cost tens of thousands of dollars in staff time and more tens of thousands of dollars in delay in filling the opening)?
I also assume that if the board offers, unwisely, to keep her on as permanent CEO and she wants a better offer than they gave her, she will understand when she when the board says "sorry, we don't negotiate and since you don't appear happy with our offer and we want a CEO who is happy with their situation, we retract the offer -- don't let the door hit your ass on the way out".
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
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.
One of the big problems with salary negotiations is that inevitably everyone knows everyone else's paycheque. So if you find out that the guy sitting beside you doing the same job is earning way more then you just look at your paycheque as a biweekly insult.
I worked for one company that paid its programmers a perfectly round number and everyone went up at the same time. But bonuses were far more complicated with a huge factor being voting among the employees. The company literally had a rule that if anyone discussed who they were voting for then it was an instant firing. This way the outstanding employees got massive bonuses.
What was interesting was that when some people came to the end of their interviews they would begin negotiating their salary after being repeatedly told that it was not negotiable. The ones who pushed this harder and harder tended to be douchebags and this pretty much always resulted in no job offer or a withdrawn offer. They genuinely seemed pissed.
One douche summed it up as "When I heard that everyone was earning X, I just had to earn X+1 so that I could prove I was better." This was even after he was told how the bonuses worked.
The cool benefit of bonuses was that it really weeded out the crappy programmers. Bonus time would come along. The results would be published and a few guys had literally zero votes and usually they were gone in a month or less. The only programmer ever fired for talking about bonuses went around with a sob story how he needed the bonus. Literally the next day he no longer worked for the company. This is the same company that didn't fire people after one threw a laptop through a window with the intent of hitting another worker. (they worked out their issues).
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.