The Psychology of
Salary Negotiation
FOR WOMEN

I'd like to celebrate the Day of Women's Empowerment with a discussion about what can be achieved today by women who are ready to advance their careers, who want to have their voice heard and have a positive influence on the people around them.

The beginning of the 21st century increased the awareness, in many parts of the world, of the importance of an equal society where women and men compete equally for top positions and are compensated for their work equally. Policymakers, boards of large and small corporations, media and academics support women's empowerment. However, the final step of breaking the gender pay gap should be taken by women themselves through active and consistent negotiation for higher pay.

Research suggests that women and men don't necessarily start from the same level of compensation. While men are consistently negotiating a pay raise, women accept what is offered. Employers, in return, anticipate that they need to pay men more than women and contribute towards the vicious circle of unequal pay.

Let's look at the example of Sara and Fred, who recently graduated from the same European business school. At the age of 22, Sara and Fred receive a job offer with an annual salary of €25k. Fred negotiates and gets his job offer raised to €30k. Sara accepts her 25k offer. Assume they start with the same company and simply receive an equal pay rise of 3% every year. By the age of 60, their pay gap will widen to more than €15k a year (Fred will be paid €92,243 and Sara €76,870). Just imagine how big the pay gap will be if Fred continues to routinely negotiate for a salary increase! Researchers note that even when differences in the performance evaluation awarded to men and women are minuscule (1%), it doesn't take long before the overwhelming majority of people at the highest levels with the highest compensation level are men. This is what sociologists call the "accumulation of disadvantage."

Why is it harder for women to ask for a pay rise? For a start, it is wrong to assume that men and women are in the same position when they raise the question of higher compensation. Social stereotypes are still strong among all groups of society and men's competitive behaviour in business is perceived as usual while women are still expected to be understanding, patient and less demanding. Multiple case studies show how women are penalised socially much more than men for asking for higher pay. Women who chose to negotiate are facing a social dilemma: they compare the potential gains from negotiating a better compensation against the social losses, adverse judgements and being labelled as "difficult" and "demanding".

So how can women overcome the social dilemma they face and successfully negotiate what they deserve without downside?

The winning strategy is to choose negotiation in the first place. Negotiation skills are like any other skills: they flourish and grow with practice. What doesn't help is avoiding negotiation and waiting for a better outcome. So the first step is deciding to go for negotiation, practicing and being prepared. It is proven that women become excellent negotiators through training. Role simulations at home or with friends, as well as live practice while shopping for food or buying a car or hiring a handyman for home improvement, can be a good playground in order to prepare for the first big negotiation and all the ensuing ones.

It is also known that setting higher aspirations tends to deliver higher payoffs. Someone said that "high aspirations are like motivation vitamin for individual achievement". The salary for a position is never written in stone. It is usually a range, and without aspiration, women will simply not get the compensation at the highest end of this range. So next time you ask yourself how satisfied you are with your current compensation, remember that, on average, women report salary expectations that are between 3 and 32 per cent lower than those reported by men for the same jobs (source).

But how to aim high while staying realistic? Preparation and research help, and we will discuss this later.

In salary negotiations, the winning strategy for women to avoid the social cost of being perceived as "demanding" is to emphasise the importance of relationships, promote communal benefits and concern for others.

Expressing a strong willingness to cooperate and do it within a perceived partnership can help women in salary raise negotiations. "I believe it is very important that we work together towards finding the right solution", "my main priority is to build a long-lasting partnership with you and the team", "I think first of all about our team", "I care most about my relationship with you and the team and always put people first" are the type of statements that will help you get to the result you are looking for.

It was also established by multiple researchers that professional women were significantly more likeable and therefore more influential when they used a friendly social style of influence and not a more direct style of communication. Interestingly, men's persuasiveness is not affected by the style of communication they choose for their negotiations (read here). This is just another reminder that gender biases are still very present.

So here is an example of an opening line putting forward the importance of teamwork:

"I hope it's ok to spend a few minutes discussing my salary. For me, the most important is to build a strong relationship with you and the team and I don't want to create any tension by bringing this up. I just thought this might be a good moment for me to openly discuss this topic."

The trap of being friendly is, however, that it can be perceived by men as a weak position and showing concern for the team's priorities might suggest your preparedness for concessions. Many experts and academics confirm that, stereotypically, female communication styles are often associated with low-status influence styles. Solid reasoning can help to avoid falling into this trap, making the request legitimate. Use appropriate reasoning, justified by context, and rely on facts, not emotions or feelings, to move forward with credibility and legitimacy.

Besides, to make sure that you set ambitious goals, you need to collect good information to minimise uncertainty. Are you fairly paid? Are you entitled to a pay rise? What is the average in your industry? What benefits can you ask for? If a man and a woman are in a situation of equal uncertainty about what is appropriate, it is proven that a man will adopt a more aggressive style in asking for more. To avoid this trap, get your data right to have more confidence in the legitimacy of your asks.

Research shows that women perform better when their role is to advocate for others as opposed to negotiating for themselves. In fact, in representation negotiations where women act on someone else's behalf, women outperform men by 23%. Men's behaviour and the ensuing social effects don't shift much depending on whether they are negotiating for themselves or others.

When negotiating for others, women develop more aspiration, which allows them to achieve better results. So when you need to negotiate for yourself, think about the groups you represent. By negotiating your pay raise, by asking for more responsibilities and a higher management position, you are negotiating not only for yourself but on behalf of the entire female community. It is extremely important for other women to see that it is possible and that many women are successfully negotiating their position. For example, there is evidence that when more women gain high-status managerial positions, the gender pay gap reduces for lower-level workers.