Ellen Pao Eliminates Salary Negotiations at Reddit

reddit alien flickrEllen Pao, fresh off a court case that addressed gender discrimination in the tech industry (she lost, but the trial helped push gender discrimination issues into the spotlight), has a new method of ensuring equality among team members hired at Reddit, where she is interim CEO: eliminating salary negotiations.

Why does Pao think eliminating negotiations will level the playing field? As she told the Wall Street Journal:

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.

This is not a particularly original idea. Many employers, especially hourly employers, don’t give people the opportunity to negotiate; the employers “come up with an offer that we think is fair,” and employees have to accept what is offered. Will new Reddit employees agree that Pao’s salary offer is fair?

More than that, will Reddit salaries become standardized across the board? Will everyone with the same job title receive the same salary? Will certain types of promotions become standardized, and will everyone who is promoted receive the same salary increase? Knowing Reddit, it probably won’t take long for people to start anonymously comparing their salaries and reminding each other that workers have the right to share salary information.

I first heard about this story at Mashable, which brings in a trio of experts to speak to the pros and cons of Pao’s plan. Wharton professor Adam Grant states that “eliminating salary negotiations may be a promising step toward greater fairness in the workplace,” but business author Alexandra Levit says “this won’t solve the age-old problem of unconscious bias.” I agree with Levit; giving everyone the same starting salary isn’t the same as giving everyone identical opportunities and promotions, and there are plenty of ways that women could still fall behind.

Another Wharton professor, Matthew Bidwell, suggests that this ban might drive potential new hires away from Reddit. I feel less concerned on that point; there are plenty of talented people who need jobs, and plenty of talented people who will be happy to take a job at Reddit despite any concerns about not being able to negotiate their salary.

In fact, there may be people who apply to become part of Reddit’s team specifically because they do not want to deal with the stress of negotiating their salary. If I knew that Reddit offered a fair and competitive salary (and knew what I would be likely to earn before I applied for the job), and heard that Other Tech Company offered a wider salary range but I’d be required to negotiate for my salary, I’d probably pick Reddit. A Snoo in the hand is worth two in the bush, after all.

What do you think? Is Pao’s idea a good one, or is it likely to cause as many problems as it solves?

Photo credit: Jeff Keacher

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