Salary negotiation just got outlawed at Reddit. Could this bold HR move help equal the playing — and paying — field between men and women?
The interim CEO of Reddit, Ellen Pao, shocked the Internet last week with big news: no more salary negotiations.
This wasn’t a spur-of-the-moment decision to make job offers easier. The announcement closely followed the close of the sex discrimination suit that Pao had opened against her former employer, Kleiner Perkins Caufield & Byers. Pao claimed that the Silicon Valley investment firm had prevented her from being promoted, stuck her with junior-level tasks, and retaliated when she voiced her concerns.
But the jury wasn’t convinced, and decided Pao’s claims were unfounded.
A bold HR move: no salary negotiations for new hires
After the trial, Pao sat down with the Wall Street Journal to discuss her trial, sexism in Silicon Valley, and what ended up to be a huge HR reveal for Reddit.
From the interview:
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. 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. We ask people what they think about diversity, and we did weed people out because of that.
Generally, Pao’s right. To find out how well women and men negotiate, a 2014 American Psychological Association report looked at data from 51 studies that had already been performed on the topic. Women were better negotiators on behalf of others, the report noted, but not as successful when negotiating for themselves. But women with experience negotiating were better at it than men.
Could Reddit’s move fix the wage gap?
There’s already talk that Pao’s move at Reddit could be the beginning of the end of the wage gap. “”By taking [negotiation] out of the process, this is a good step toward establishing a level playing field,” Joelle Emerson, CEO of diversity strategy firm Paradigm, told Fast Company.
Sheryl Marshall, a Boston-based venture capital leader, recalled to Fast Company’s Vivian Giang the shame she experienced in a previous role when she learned that a male contemporary at the same company was making $50,000 more than she was.
“My inclination is that there’s a whole generation of women, younger women probably in the tech community, who don’t have a clue about what they should be paid and unfortunately the playing field has not been leveled yet so I say, good for [Pao],” she said.
While noble, many say that Reddit’s move comes with more challenges than promises for fixing the wage gap. Vaibhav Mallya, founder of placement and negotiation-assistance site OfferLetter.io, said it’s hard to prove what makes a job offer fair, as there are too many variables — like previous salary — that could come into play.
“There’s a lot that needs to be done before general inequity in the landscape can be resolved,” he said.
Lisa Rowan is a writer, shop owner, and podcaster living in Washington, D.C.