Ellen Pao lost her legal battle against her former employer, venture capital firm Kleiner Perkins Caufield & Byers — but she's still hard at work as the interim CEO of reddit. And in that role, Pao's trying to tackle the gender discrimination she says exists in the tech industry.
"Men negotiate harder than women do and sometimes women get penalized when they do negotiate. So as part of our recruiting process we don’t negotiate with candidates," Pao explained in an interview to the Wall Street Journal. "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."
That approach runs counter to the advice of prominent women like Facebook COO Sheryl Sandberg — after all, how can you "lean in" to a brick wall? But when women negotiate or self-promote, it can backfire.
"When women self-promote, which is a behavior absolutely necessary for workplace success, they are viewed as more competent, but are strongly disliked for failing to adhere to gender expectations," said Corinne Moss-Racusin, an assistant professor of psychology at Skidmore College. "It's a really difficult Catch-22."
One study published in 2007 found that women who attempted to initiate salary negotiations faced a more significant social backlash than men — with people being less likely to want to work with them.
"The problem isn't with the women — they are actually reading the social environment accurately, which leads them to be more nervous about asserting themselves when it comes to salaries," said Hannah Riley Bowles of the Harvard Kennedy School, one of the authors of the study.
Women's awareness of this potential backlash could make them worse at self-promotion if they worry about how their overtures will be received, said Moss-Racusin. But that doesn't stop women from trying — in fact, they negotiate throughout their careers about things like their workloads and leadership positions, according to Riley Bowles. However, gender-based expectations about men as breadwinners appear to make it especially hard for women to negotiate salaries. "We just associate higher pay with men and that's one of the reasons research suggests money is a harder thing for women to negotiate," she said.
The reddit model that excludes negotiations is an interesting approach, said Riley Bowles. It makes a lot of sense if you're looking for ways to reduce bias for an entry-level job where you have a good idea of the candidate pool and everyone that receives a standard offer, she said.
But that model could become problematic for people looking for jobs later in their careers — where comparing candidates can be like comparing apples and oranges.
And then there's the question of who determines what is a fair offer. "The company may perceive itself as really fair, but perceptions of fairness are often self-serving — or can be perceived as self-serving by candidates wanting to negotiate," Riley Bowles said.
Instead of killing negotiations, Riley Bowles said salary transparency may be more effective. "The more ambiguity there is there, the more likely you are to see gendered outcomes," she explained. If everyone knows roughly what other people doing the same kinds of jobs are making, it's easier for employees to judge if they are being treated fairly. While this might sound radical — some companies already do it.
Transparency might also prevent women from being deceived in salary negotiations. A study led by Berkeley Haas School of Business professor Laura Kray found that women were perceived to be easier to mislead than their male counterparts — which resulted in women being lied to more in negotiations.
Pao only offered a vague description of how reddit's system actually works. But without some level of transparency, it requires a lot of trust in the organization. "If there's no way to negotiate and there's no transparency, we just have to hope that the offers being made are equal," Moss-Rascucin noted.