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Study Shows How Salary Negotiations Hurt Women More Than Men

Businesswoman

July 24, 2012

A sluggish economy has forced many companies to tighten their purse strings, particularly when it comes to employee salaries. While one might believe that one's performance determines earning potential, a new study published in the journal of Organizational Science suggests that a person's sex may be an even larger consideration, placing women on the losing side of the earnings scale.

According to LearnVest, a new study of 184 managers revealed that when participants are put in a position where they must distribute raises to employees and then justify them through a period of negotiation, they awarded men two-and-a-half times more on average then they offered women. When told there would be no negotiations, the funds were distributed equally.

The Globe and Mail notes that these findings throw a wrench into a commonly-cited belief among some experts that women earn less than men because they are unwilling to negotiate.

"Whenever research reveals disparities between men's and women's pay, there is a common retort: The gap 'must' be due to unobserved differences in men's and women's willingness or skill in negotiating for pay," said Maura Belliveau, who conducted the research at Emory University. "Although some gender differences in negotiation exist, this study reveals women incur a major disadvantage that precedes any negotiation."

The deck is stacked against women, it seems, even before they have a chance to plead their case. The problem, according to CBS MoneyWatch, is that managers typically receive budgets for raises and then divide those funds among their workers. Men, however, tend to have larger raises allotted to them because managers do not expect women to try to negotiate. They do, however, expect men to ask for more pay. So when it comes time to sit at the negotiation table, women who do try to negotiate have little wiggle room because all the funds have already been accounted for and most managers are unwilling to downgrade one person's raise to boost that of another.

"That's an extremely challenging task, even for a skilled negotiator," Belliveau told The Globe and Mail. "Managers and HR professionals need to closely monitor pay data in their organizations to ensure that the burden of low raises is not disproportionately placed on women."

According to LearnVest, women tend to earn about 70 cents for every dollar a man with a comparable resume makes in a similar position. Women only out-earn men in a few select fields, usually within the personal care industry. The Globe and Mail reports that if Belliveau's findings hold true, this trend is not likely to reverse course any time soon, especially in this economy when tight corporate budgets offer workers less bargaining power.

Still, LearnVest suggests that women still prepare to negotiate, first by researching how much they are really worth through websites that track salary data, and then brushing up on their negotiating skills.


Compiled by Aimee Hosler

Sources:

"Engaging Inequity? How Social Accounts Create vs. Merely Explain Unfavorable Pay Outcomes for Women," orgsci.journal.informs.org, July/August 2012, Maura A. Belliveau

"Looking for a Raise? The Cards May Be Stacked Against Women," learnvest.com, July 23, 2012, Alexa Gellman

"Why men get bigger pay hikes than women do," cbsnews.com, July 20, 2012, Suzanne Lucas

"Women may have deck stacked against them when it's pay raise time," theglobeandmail.com, July 19, 2012, Wallace Immen

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