1. INTRODUCTION
Every day we do negotiation. Think back through yesterday’s event. Maybe you had to work out with your spouse about whose going to send the children to school or in the Budget Meeting, you had to negotiate with the Top Management who decided to review your proposal to purchase a heavy duty Photostat machine or you had to negotiate the best price with the seller on the Baju Kurung you wanted to buy at the Pasar Ramadhan. Each of these daily events created potential conflict and they were resolved through negotiation.
What is negotiation?. Negotiation is defined as ‘a process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them. The negotiation process involves few steps beginning with the preparation and planning, definition of ground rules, clarification and justification, bargaining and problem solving and the final step is closure and implementation’ (Robbins & Judge,2009,p.529). Do men and women negotiate differently? Is the bargaining table a male domain? Do men and women have different bargaining styles? Do their abilities differ from each other that they create and claim their value? Does gender pay gap exist? These are timeless questions but will be answered after you have finished reading this project paper.
2. LITERATURE REVIEW
My review on gender and negotiation literature was based on a search of journals in the Internet. I found a number of journal through the Ebscohost and Proquest website, using search terms related to gender and negotiation (i.e.,[gender OR male OR female] AND [‘negotiate’ OR ‘negotiation’ OR ‘negotiator’]). From this initial search, I have removed articles on politics, health (HIV, sexual behavior), peace negotiation and other articles which are not relevant to gender or negotiation. I supplemented this literature with additional information abstracted from Organizational Behavior books.
The literature I reviewed about gender and negotiations will discuss on the male and female behavior, the pattern of negotiation of each gender and their difference. To make it clear, I have arranged the review based on each individual articles point of view for better understanding.
2.1 Gender bias in automotive negotiations by Stewart L. Tubbs, Erin Ottenbreit and Sean Falk
Tubbs, Ottenbreit et al. (2008) make an interesting link between negotiation and gender bias in their article “Gender Bias in Automotive Negotiations”. The article relates the history of negotiation skills back to the early years being a child. During childhood play is where most of our conversation style is learned. As a child individual tend to associate with peers of the same gender and create a rapport and negotiation status within that group. This supports the notion that men and women have developed broadly different styles of communication at a very young age.
The article quoted that the major distinction between the way boys and girls communicate is that girls typically use the language to negotiate closeness in order to gain a sense of intimacy as a foundation of friendship. Alternately, boys generally use language to negotiate their status within the group. The premise that males use power to negotiate status verse a woman’s desire to establish rapport through cooperation has carried out through adulthood at home, work, meetings, social occasions and in personal contacts. This means men and women tend to have different ways of saying what they mean.
In negotiation, males are typically characterized as being assertive, independent and rational and in contrast, women are generally regarded as emotional, passive and hole a high regard for others. Because many stereotypical traits are valued at the bargaining table, women are placed at a disadvantage during negotiations. A study done by Walter, Stuhlmacher and Meyer (1998) (as cited in Tubbs, Ottenbreit et al.,2008), found that men tend to negotiate better outcomes than women. Whether the negotiating parties endorse these stereotypes or not, simply being aware that this connection exists can have an influence on bargaining behavior.
The article also shared a theory developed by Riley (2001) where it stated that the effects of gender on negotiation depend systematically on two situational factors: structural ambiguity and gender triggers. Riley refers to structural ambiguity as the clarity of information about the bargaining range and appropriate standards for agreement. As ambiguity increase, parties have to rely more on subjective assessments of the negotiating situation, which in turn creates a greater potential for gender to influence bargaining expectations and performances. Gender triggers can be defined as the situational factors that make gender salient and relevant to negotiator’s behaviors and performance expectations. Gender triggers act as cues for men and women to interpret and to enact negotiation distinct gender-consistent ways. Riley’s research found that when structural ambiguity was high, male negotiators had more optimistic expectations and negotiated higher payoffs than females in mixed-gender pairs. However, she discovered that when ambiguity was low, gender differences were not apparent.
2.2 Gender differences in virtual negotiation by Alice F. Stuhlmacher, Maryalice Citera and Toni Willis
Stuhlmacher et al (2007) “Gender Differences in Virtual Negotiation:Theory and Research” offers and insightful information on virtual communication and negotiation by focusing on gender effects. Stuhlmacher et al (2007) stated virtual communication uses communication modes other than face-to-face (FTF) such as telephone, email or written notes. The process of virtual negotiation becomes more complex when it involved gender roles. In most societies, men and women have different social roles and are expected to have the skills to fulfill these roles. Relevant to negotiation are societal expectations for women to communicate in a friendly, warm, supportive and selfless manner (Eagly and Carli, as cited in Stuhlmacher et al. 2007). Women are expected to have and exhibit more communal characteristics than men. In contrast, men are expected to interact with more assertiveness, confidence, self-promotion, dominance and one-up-manship than women.
The article sum up with a conclusion that in most virtual negotiations, the negotiation task remains a masculine social role with its focus on competition, winning and limited personal contact. Virtual negotiation, however, makes the gender of the negotiator less salient (compared to FTF negotiation) because there are fewer status and social cues.
Stuhlmacher et al (2007) explained that gender role salience has different implications for men than women negotiators. Instead of focusing on the status of the other individual, women in virtual negotiation may be more likely to concentrate on the content of the interaction (Nowak; Ridgeway, as cited in Stuhlmacher,2007). Recall also that psychological distance theory predicts that virtual negotiations lessen the social influence of the other communicator (Latane; Wellens, as cited in Stuhlmacher,2007). The reduced social cues in virtual negotiation may equalize social interaction, making women’s behavior less consistent with a female gender role and more consistent with a negotiation role.
The article predicted that in virtual negotiations, women negotiators will be less guided by female gender roles and there will be less stereotypical afilliative behaviors than in a FTF negotiation which resulted to 3 findings as follows:
Finding 1 Female negotiators displays more hostile behaviors in virtual negotiation compared to FTF negotiations
Finding 2 No difference existed in displays of hostile behavior for male negotiators between virtual and FTF negotiations because being a negotiator is congruent with a masculine role.
Finding 3 Female negotiators have better objective outcomes, or profit, in virtual compared to FTF negotiations.
2.3 Gender Distinctions and Empathy in Negotiation by Linda L. Barkacs and Stephen Standifird
The article stated that there is little doubt that males have an advantage as the “dominant cultural stereotype” in our society (Kolb & Coolidge; Kolb & Williams, as cited in Barkacs, et al.,2008). One prominent theory on the differences between male and female negotiators is that females are more aware of the relationship between negotiators, whereas males are more task-specific (Lewicki & Sander, as cited in Barkacs et al.,2008).
The article explained that in studies on nonverbal communication, women are seen as more approachable and more focused on the other person during interactions. Men are viewed as more composed, therefore less expressive. A partial explanation of the behavior of women is that they fear fewer rewards and greater costs if they fail to expressive positive emotion. In addition, non verbal expressiveness is linked with social power. Those with lower social status and power are expected to engage in great expressivity.
Women traditionally held lower social status than men and these expectations may affect how men and women deal with issues during negotiation (Thompson & Kleiner, as cited in Barkacs et al., 2008).
The article reported, in 2003, Deborah M. Kolb and Judith Williams (as cited in Barkacs et al., 2008) published their theories on the hidden context within every negotiation (Kolb & Williams, 2003). This hidden context was dubbed the “shadow negotiation”. The theory posits that while people negotiate over issues, they also negotiate how they will relate to one another. During the process of trying to persuade the other party, each negotiator makes assumptions about the other negotiator’s wants, weakness and likely behavior. Kolb and Williams (as cited in Barkacs et al., 2008) conclude that the shadow negotiation is where bargainers decide how cooperative they will be in reaching a mutual solution.
Relationships play a larger role in women’s lives than in men’s, therefore it makes sense that women’s attitudes toward negotiation are more focused on relationships. When engaged in integrative (i.e., “win-win”) negotiations, women may actually have an advantage over men, as more cooperative behavior is required. Distributive (i.e. “win-lose”) negotiations requires competitive behavior, which is typically associated with a masculine negotiation style (Carrell & Heavrin, as cited in Barkacs et al., 2008).
2.4 Negotiator style and influence in multi-party negotiations: exploring the role of gender by Leonard Karakowsky and Diane L. Miller
The article mentioned that the past research has attempted to investigate the potential sources of the gender differences in negotiation styles and has identified a number of factors, including: gender differences in self-confidence (Ragins and Sundstrom, as cited in Karakowsky and Miller, 2006); interpersonal-orientation (Rubin and Brown, as cited in Karakowsky and Miller, 2006); preference for harmony (Kolb and Coolidge, as cited in Karakowsky and Miller, 2006); self perceptions of assertiveness (Watson and Kasten, as cited in Karakowsky and Miller, 2006); and risk aversion (Powell and Ansic, as cited in Karakowsky and Miller, 2006).
Masculine Tendencies Feminine Tendencies
Visualize one-shot deal Visualize long-term relationship
Seek a sports-type victory Seek mutual gain
Emphasize rules-of-the-game and power positions Emphasize fairness
Explain logic of their position Inquire about others’ needs
Speak in a dominating manner Use powerless speech
Be intransigent about their position Be willing to compromise
Interrupt and deceive the other party Avoid tactics that might harm long-term relationship
Figure 1 : Male and female negotiation styles: some proposed differences
Source : Based on Lewicki et al. (1993)
The article later explained that the social role theory asserts that men and women are socialized in different ways which consequently encourage different types of behavior in groups –women tend toward a higher level of socio-emotional behavior (collectivist), while men are more task-oriented (agentic). This is in line with Kolb’s (as cited in Karakowsky and Miller, 2006) view of women as possessing a greater preference for maintaining harmony in a negotiation which can dominate other interests. Moreover, Watson and Kasten (as cited in Karakowsky and Miller, 2006) found that female negotiating pairs avoided discussing the main point of the conflict, yet they indicated that the negotiation was effective in that harmony was preserved.
The article summarized the report with 2 findings, such as follows:
Finding 1 In a mixed-gender multi-party negotiation, males will exert greater influence compared to females when the negotiation clearly involves the potential for a distributive (win-lose) outcome (a stereotypical male- oriented negotiation task).
Finding 2 In a mixed-gender multi-party negotiation, females will exert greater influence compared to males when the negotiation clearly involves the potential for an integrative (win-win) outcome (a stereotypical female- oriented negotiation task).
3. CONCEPTUAL FRAMEWORK
I am trying to relate the gender negotiation with the compensation set by an organization. What is compensation? Something, such as money, given or received as payment for a service or job done. There is a relationship between how the organization perceived the gender effects when it comes to salary setting and found solutions to ensure fairness in giving pay to employees.
Figure 2 shows the elements of total compensation in the HRM system.
Figure 2 The elements of Total Compensation within integrated HRM System
The words written in red in Figure 2 shows where the negotiation exist and what are the actions taken by HR practitioner to reduce the impact of gender bias. Jackson, S.E., et all (2009) quoted, pay fairness refers to what people believe they deserve to be paid in relation to what others deserve to be paid. People tend to determine the fairness of their pay by comparing what they give to and get out of the organization compared to others. If they regard this comparison as fair or equitable, they’re likely to be satisfied. If they see it as unfair, they’re likely to be dissatisfied. Thus, pay fairness is strongly related to pay satisfaction, which is the amount of positive or negative feelings employees have toward their pay. Fairness is the key element in reducing the gap between pay negotiation made by male and female employee.
Equal Pay Act also has been imposed where Title VII of the Civil Rights Act, with which the following are identified as the protected groups :women, African Americans, Hispanics, Native Americans, Asian Americans and Pacific Islander American, prohibits pay discrimination in any form. Prior to the passage of the Civil Rights Act in 1964, gender-based discrimination was addressed by the Equal Pay Act of 1963, which amended the Fair Labor Standards Act.
The Equal Pay Act prohibits an employer from discriminating ‘between employees on the basis of sex by paying wages to employees…at a rate less than the rate at which he pays wages to employees of the opposite sex…for equal work on jobs the performance of which requires equal skill, effort and responsibility, and which are performed under similar working conditions.”. For monitoring purposes, employers submit compensation data when they file EEO-I reports. An EEO-I (Equal Employment Opportunity) report gives an accounting of the composition of the workforce using 4 factors: job family (9 categories), sex (2 categories), race/ethnicity (8 categories) and employment status (5 categories).Besides filing the pay information with the EEOC (Equal Employment Opportunity Commission), employers should conduct comprehensive audits of all aspects of their compensation practices to identify and correct any pay inequity problems. Such audits typically scrutinize each pay element for possible evidence of pay inequities that are based on gender and etc. When a pay equity audit uncovers apparently discriminatory pay practices, a plan should be developed to correct the problems. The cost of pay equity adjustments usually has been between 2 and 5% of payroll. Many private sector businesses incorporate pay equity analysis in their annual budget proposal.
As you can see in Figure 2, the process is continuous where the total compensation is set based on internal and external contributing factors. It will always be analyzed again and again when there are changes in the internal and external environment, thus making it the best formula for total compensation within the HR system.
In the next chapter in Findings, I shall relate the negotiation issue of pay gap between the male and female employee and look at present scenario, whether there is still pay gap based on articles I have read.
4. FINDINGS
DeCenzo and Robbins (2007, p.78) quoted in past decades, many jobs were formally viewed as being male- or female-oriented. For example, positions such as librarians, nurse and elementary schoolteacher were considered typical jobs for women; by contrast, police officers, truck drivers and top management positions were regarded as the domain of men. Historically, this attitude resulted in the traditional female-oriented jobs paying significantly less than the male-oriented positions. This differentiation led to concerns over gender-based pay systems, commonly referred to as the comparable worth issue. For instance, a nurse may be judged to have a comparable job to that of a police officer. Both must be trained, both are licensed to practice, both work under stressful conditions and both must exhibit high levels of effort. But they are not typically paid the same; male-dominated jobs have traditionally been paid more than female-oriented jobs. Under comparable worth, estimates of the importance of each job are used in determining and equating pay structures.
The gender pay gap refers to the notion that men on average earn more than women. Blau and Kahn (2000) noted that the weekly earnings ratio of full- time female workers to male workers was constant at about 60 percent from the late 1950's to 1980. This gender pay ratio began to rise in the early 1980's and by 1995 it had climbed to about 75 percent. However, the ratio's upward progression appears to have stalled around 1995, and significant gains have not occurred since that time (Blau and Kahn, 2000). The gender pay gap and gender pay ratio typically relate to the overall population of female and male workers and not to workers in specific occupations.
It is clear that research on gender in job negotiation speaks directly to the unexplained gender gap in earnings by illuminating psychological effects of gender on compensation negotiations. It does offer some potential explanation for the asymmetric distribution of other types of potentially negotiable organizational resources and career opportunities such as trainings, budgets, developmental work experience and etc, which contributes to the gender gap in management and leadership positions.
Barkacs and Standifird (2008) reported that the research done over the years indicated that gender differences in negotiation outcomes is not necessarily based on differences in behavior, but rather how the same behavior of male and female negotiators is perceived differently. In the context of salary negotiations, some research indicates that males may receive a more positive outcome by reminding supervisors of previous favors and offering to make sacrifices. This same tactic, when used by female employees, has a negative effect (Lewicki & Sanders, as cited in Barkacs and Standifird, 2008).
In the article ‘Untapped Potential in the Study of Negotiation and Gender Inequality in Organizations’ by Hannah Riley Bowles and Kathleen L. McGinn, it stated that men outperformed women in terms of the economic payoffs from negotiation, but a number of studies revealed conditions under which women’s negotiation payoffs matched or exceeded men’s. These included situations in which negotiators were advocating for others as opposed to themselves (Bowles et al, as cited in Bowles and McGinn, 2008) or in which women were reacting against explicitly stated stereotypes favoring men in negotiation (Kray et al., as cited in Bowles and McGinn, 2008). Kray and Thompson (as cited in Bowles and McGinn, 2008) concluded that the negotiating table is male dominated- both in terms of the economic claims that men make relative to women and in terms of the stereotypically masculine social conception of the attributes of effective negotiators – but that negotiation outcomes are driven by situational factors rather than predetermined by stable, innate differences between the sexes.
Results in the article pertaining the gender differences in salaries secured at organizational entry showed mixed results but tend to suggest that male managers and professionals negotiate higher starting pay than their female peers. Bowles and McGinn (2008) found researchers attribute these gender differences to unequal rates in the propensity to negotiate initial offers as well as to differing effectiveness in bargaining for higher pay.
Babcock and Laschever, (as cited in Bowles and McGinn, 2008) found significant gender differences among graduating professional students in the propensity to negotiate but no gender difference in negotiation performance. Seven percent of women as compared with 57% of men negotiated for higher salaries and those who negotiated gained an average 7.4% over their starting offer. These findings of gender differences in the propensity to negotiate were replicated in another field study of MBA students’ job market experiences and in multiple laboratory experiments (Small et al., as cited in Bowles and McGinn, 2008).
The article later explained that there are numerous studies providing indirect support for the proposition that male managers and professional negotiate higher salaries at organizational entry than their female peers. Gerhart (1990) analyzed the current and starting salaries of 4,617 managers and professionals in a major industrial and consumer products company. Controllin for year of hire, work experience, education, tenure, performance and job title, he found that women’s relative salary disadvantage as compared to men at time of hire accounted for most of the gender difference in current salary. Based on a two-year longitudinal study of 610 managers and professionals working in Fortune 500 companies, Brett and Stroh (1997) demonstrated that men substantial compensation gains by transferring organizations, whereas an external labor market strategy had no significant benefits for women’s compensation.
Another evidence is shown by Barkacs and Standifird (2008),where a 1991 study of MBA graduates found that, while men and women were equally likely to negotiate, men received higher salaries for negotiating their salary than did females. The study was controlled for the effects of industry, college major, GPA and business experience. The differences in salary may have emerged from how negotiators define the bargaining zone (Lewicki & Sanders, as cited in Barkacs and Standifird, 2008). As discussed earlier, women may suffer from the ‘entitlement effect’ (the belief that they deserve to earn less). Moreover, a woman’s reference point is typically other women- women who traditionally earn less than men. The combination of lower expectations and misinformation about their worth may contribute greatly to women receiving less when negotiating salary. Men are expexted to be assertive, forceful and in charge in a negotiation whereas women are expected to behave in a more differential, agreeable manner.
It looks like the review are providing with conflicting results concerning the current status of the gender pay gap. Brewer (1998) noted that a survey of 4,585 numbers of the American Management Association revealed that the number of women in policy-making positions increased at more than twice the rate of men since 1990. However,the female managers’ salaries stilled lagged far behind their male counterparts, and the gap was even wider at senior levels of management.
Philpott (2002) noted that the gender pay gap for workers overall widened from 18.4 percent in 2001 to 18.8 percent in 2002. He noted that the gap widened in 2002 largely because male workers were given generous bonuses than were their female counterparts. Lips (2003) reported on a 2001 General Accounting Office (GAO) study focusing on managers’ salaries within a group of ten industries between 1995 and 2000. The GAO study, which controlled for education, age, marital status and race, found that women earned less than men in both 1995 and 2000. In seven of the ten industries studied, the gender pay gap actually increased between 1995 and 2000.Daily and Dalton (1999) reported on a Catalyst study of male and female executive officers of Fortune 500 companies and noted that the female officers earned only 68 percent of their male counterpart’s salaries. This pay differential existed even after controlling for size of company and years of service.
Despite the above studies reporting the existence of a signifianct gender pay gap at virtually all levels of employment, other studies suggest that the gap has narrowed substantially in recent years. For example, Weidenbaum (1999) states that the gap has almost disappeared, especially for males and females with equal education and levels of experience. As a case in point, he stated that women aged 27 to 33 with no children earn 98 percent of the wages of childless men in the same age category.
The article later explained that the more recent research where the situation is unambiguous, there is little or no pay gap between men and women (Legace, as cited in Barkacs and Standifird, 2008). This is true in industries where salaries are normative such as the banking, consulting and high technology. Even in such industries, however, women and men negotiate different packages. In a high ambiguity industries, such as telecommunications, real estate, health services and media male MBAs negotiated salaries that were on average $10,000 higher than salaries negotiated by female MBAs. Assuming that the lower paid MBAs continue working in high-ambiguity industries for the next 35 years and receive a three percentage increase each year, the wage gap is more than $600,000. Invested at 5% annual interest, the gap grows to $1.5 million (Pradel, Bowles and McGinn, as cited in Barkacs and Standifird, 2008).
The current study examines the gender pay gap issue, in relation to one very important subset of the U.S. workforce (i.e., executive officers for Fortune 100 companies). Being a top executive in a Fortune 100 company represents the zenith in terms of workplace accomplishments. If women have penetrated this elite group of corporate management in significant numbers, then a strong argument could be made that the glass ceiling has been shattered. Similarly, the size of the gender pay gap within this group would send an important message to the rest of Corporate America. A significant gender pay gap would suggest that women, even though they hold key positions within an organization, are not valued by the organization as highly as their male counterparts. A relatively small or nonexistent gender pay gap within this group would suggest that women executives are viewed on an equal footing with their male counterparts in terms of their value to the company.
Looking at the current situation regarding the gender pay gap, latest study have shown that it is nonexistent in the top levels of management at large corporation but it does not really imply that gender bias in the workplace has been eliminated. It may be lessening, at least, in the executive suites of large companies as men and women in these top positions appear to be rewarded equally. This indirectly suggest that a mindset by top management and outside boards that equal work deserves equal recognition and pay, regardless of gender.
Bowles and McGinn (2008) suggested two general mechanisms for how organizational leaders might minimize the potential for negotiation dynamics to contribute to gender inequities within their organizations. First, enhancing the transparency with regard to what can be negotiated is likely to reduce gender differences. Gender differences in negotiation performance tend to be greater the more ambiguity there is about the appropriate standards for agreement. Second, organizational leaders can make themselves more aware of how traditional norms and practices trigger gendered expectations and behavior in the negotiation of organizational resources and opportunities. Ambigutiy and gender triggers work in interaction with one another, with the highest likelihood of the effect occurring when the standards for agreement are ambiguous and the environment is rife with gendered cues that negotiators use- consciously or unconsciously- to inform their negotiation expectations. Hopefully, this mindset will trickle down and eventually eliminate all vestiges of gender bias in the workplace.
5. CONCLUSION
Whether you are a male of a female, a good strategy is to determine you and your other side’s BATNA which stands for Best Alternative to a Negotiated Agreement. Your BATNA determines the lowest value that is acceptable to you in a negotiated agreement. But in the case of compensation, in relation to gender negotiation, pay gap should not exist.
Literature on gender in negotiation have started with a premise of a stable personality-based gender differences in negotiation behavior. The later research have rejected the hypotheses of stable sex-based differences in negotiation behavior by providing trace of evidence that gender effects in negotiation are systematically contingent on situational factors. The broader theoretical development of the study of gender in negotiation suggests that these situational moderators of gender effects in negotiation are routed in the larger structure of gender relations in organizations and society. To begin correcting this invisible barrier, there are laws imposed and fairness is taken seriously.
In summary quoted by Bowles and McGinn (2008), the effects of gender on job negotiations are reflective of men’s and women’s relative social and economic status. Employers and candidates alike associate men with higher pay than women. This is evident from the gender differences in aspirations that male and female candidates set for themselves, as well as in the offer behavior of those who disperse compensation. The influence of the social structure of gender relations is also evident in the responses that evaluators have to men’s and women’s attempts to negotiate for higher pay- with men’s attempts generally perceived as acceptable, particularly by men, and women’s perceived as inappropriate.
Women are more likely to be punished for self-promoting behavior than men. The world will not change overnight, therefore, women need to discover ways to overcome this disadvantage. Experts in the area suggest when women negotiate in these types of situations, emphasis should be placed on the dependency of both parties to the relationship (Kray & Thompson, 2005). It is suggested that when women enter a salary negotiation, they should focus on the benefit to others, such as spouses and children. By redirecting the focus to benefits to others, women may be able to achieve better outcomes.
6. REFERENCES
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DeCenzo, D.A. & Robbins, S.P. (2007). Fundamentals of Human Resource Management. John Wiley & Sons, Inc.
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Lips, H.M. (2003). The gender pay gap : Concrete indicator of women’s progress toward inequality. Analysis of Social Issues & Public Policy, 3(1), 87-109.
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