Wednesday, October 24th, 2012

Salary Negotiation: Are There Differences Between Men and Women?

The mechanics of the negotiation are the same for men and women, but the strategies often vary between the two sexes. Personality, style, and gender are all contributing factors that influence the outcome of the conversation. Here are four differences I have observed between male and female negotiation styles (and what you can do to level the playing field):

1.) Relationships vs. Outcomes
Women tend to value relationships over outcomes and are willing to compromise in an effort to keep the relationship intact. They can be people pleasers who generally do not like conflict and confrontation, and many women associate salary negotiation with conflict. In a study by Babcock, Gelfund, Small, and Stayn, “Propensity to Initiate Negotiations,” men and women participated in an internet survey to identify if they believed it was appropriate to negotiate in various work-related fictitious situations. As a group, women were less likely than men to choose negotiation as an option, even though they recognized that negotiation was appropriate.

Men tend to leverage relationships to achieve their goals. They ask for a particular salary with less compromise and are concerned with outcomes. They worry less about how their negotiations affect the relationship. Their straight-forward approach can work well, especially for short-term financial gain.

Recommendation: Both men and women can be successful negotiators by positioning their needs as part of a collaborative process. By listening to a potential employer’s needs and recommending outcomes that
benefit both parties, women and men can get what they want for themselves and preserve the relationship at the same time.

2.) Needs vs. Wants
Many women may make decisions about salary based on what they feel they need rather than what the market will bear. They use past salary as their benchmark and may rationalize that a similar or slightly higher salary is what they should ask for. Since employers tend to reward people no more than they require, women are at risk for receiving less competitive packages than their male counterparts.

Men are more likely to ask for what they want. Cultural norms may be at play here, since historically it has been acceptable for men to be assertive in the business world, while women who are tend to be viewed as aggressive or difficult to work with. In a study by Small, Babcock, and Gelfund, “Why Don’t Women Ask,” participants were asked to play a game and offered $3 as compensation. If participants asked for more, they would receive $10. Almost nine times as many males asked for more money, suggesting that men ask for what they want more frequently than women.

Recommendation: Both men and women can improve their negotiation skills by knowing their market value. Sites such as www.salary.com, www.payscale.com, and www.glassdoor.com help job seekers define a potential range of salaries for a particular job. By doing your research and presenting the business case for your requested salary, you improve your bargaining power and diffuse potential cultural biases.

3.) External vs. Internal Centers of Influence
Women may be more likely to assume that hard work alone will be recognized and rewarded with a promotion and/or increased monetary compensation. They often wait for external factors and group consensus to determine their opportunities for advancement.

Men more frequently take matters into their own hands and believe they influence their opportunities and promotions. They are less inclined to stay in dead-end jobs and more likely to ask for a raise when they feel the situation warrants one. In the “Propensity to Initiate Negotiations” survey, researchers found that women were 45 percent less likely to see the importance of asking for what they want.

Recommendation: Men and women can increase their opportunities for promotion by taking a proactive approach to their career development that includes reporting accomplishments regularly, taking on high-profile assignments, and developing influential networking relationships within the organization.

4.) Low vs. High Goal Setting
Women may set more modest goals than men and they generally make concessions earlier in the negotiation process. As a result, women typically have lower salaries than men in similar positions.

A study by Riley, Babcock, and McGinn, “Gender as a Situational Phenomenon in Negotiation,” revealed that men typically set goals for negotiation conversations that are 15 percent higher than women. By going into the negotiation process with higher goals, men can often receive better initial offers and additional leverage in the negotiation process. In subsequent negotiations, employers often assume that applicants with better compensation records are more capable than those who have been paid less.

Recommendation: Men and women should adopt a negotiation style that meets their individual needs, but both should incorporate ambitious targets into their negotiation strategy. When you negotiate your compensation package you are not just negotiating your starting salary, but you are directly impacting every salary increase you receive from that point forward.

While most job-seekers are intensely interested in how to negotiate the best package, few realize the importance of creating their own style and developing a set of best practices for their negotiations.