Despite existing legal protections against discrimination, a large gender pay disparity still exists.
In the United States (US), both the Equal Pay Act of 1963 and the Civil Rights Act of 1964 protect women against employment and pay discrimination. However, for comparable work, women are paid $0.75 for every $1 that men are paid.
Across industrialised countries, men’s median, full-time earnings are 17.6 per cent higher than women’s. Initial differences in starting pay are only compounded throughout women’s lives.
Gender pay disparity
Current population reports show that women have consistently earned less and continue to earn less than men at statistically significant levels. Moreover, previous research has found that women not only get paid less than men for comparable work, but that women also tend to view this as fair — a tendency known as “depressed entitlement”.
Historically, one explanation for the pay disparity is the lower levels of ability and experience that women bring to the workplace. However, this is no longer the case in much of the industrialised world.
According to 2010 data from the Equal Employment Opportunity Commission (EEOC) in the US, women make up 48 per cent of the private workforce; and yet, only 28 per cent of women sit at the executive senior-level management table.
A key contributor to the gender pay disparity is the frequency and the effectiveness with which women negotiate across their careers, beginning with salary negotiations.
Males are eight times more likely to negotiate initial job offers than females.
For example, in a study on starting salaries of Carnegie Mellon’s Master of Business Administration graduates, recent male graduates’ salaries were 7.6 per cent higher, or almost $4,000 higher, on average than those of female MBA graduates.
Reluctance to negotiate
This disparity was primarily due to the women’s reluctance to negotiate initial salary offers: Only 7 per cent of women attempted to negotiate the initial offer, as opposed to 57 per cent of men.
Research suggests that women have a hard time asking for what they want, which often leads to women engaging in negotiation less, devaluing their self-worth, and asking for less than what they are worth.
Prior research also suggests that women place too much power in the hands of others when it comes to determining what they get paid, and what they are worth.
However, research has found that women ask for a significantly higher pay for a simple task when positive characteristics about themselves, including their education or the potential benefits of their gender, were enhanced.
In other words, when women perceived they were more competent, their self-worth increased and they were more likely to negotiate better outcomes.
Taken together, women’s reluctance to successfully negotiate for what they want due to low perceptions of self-worth and feeling that others (such as bosses, the organisation and human resources) are “looking out for them” can have deleterious financial consequences, such as lower salary, bonuses, pension benefits, severance packages and stock options.
Little is known about the boundary conditions that facilitate competition versus collaboration in women’s negotiations.
How do perceptions that women hold about themselves and their competence influence their decision to negotiate and whether to negotiate?
Our current research examines how the perceptions that women hold about themselves and their competence influence their negotiation strategies and whether they choose to compete or collaborate during a negotiation.
Furthermore, our research will provide insights into how women can use strategies such as collaboration and negotiation more effectively.
Ultimately, it is important to understand why women do not negotiate.
In addition, women need effective strategies to increase the frequency and quality of their negotiations so that they have equal opportunities, commensurate pay and the confidence to ask for what they are worth.