Yale Women Faculty Forum, 11 June 2014

Kathleen L. McGinnCahners-Rabb Professor of Business Administration

Harvard Business School

* Negotiation: Closing the Gender

Gap in Salary Negotiations

*Why are you here?

*Write down your most recent negotiation success.*Write down your most recent negotiation failure.*Describe your next important negotiation.

Differences in behavior and payoffs are small and contingent on context • Men are somewhat more consistently

competitive than women.• Women are somewhat more consistently

cooperative than men,and Women are more responsive to situational cues, e.g., expected payoffs, behavior of other, relational cues, social role expectations, etc.

*Gender in negotiations

* When gender matters in negotiation…

Ambiguity

Salience andRelevance of Gender

Gender effects likely here

…and not here

*Impact of ambiguity

Gender differences in salary negotiations vary with ambiguity

MBA salaries in first job:

* Industries with clear compensation standards

60% of sample: No significant gender effects

* Industries with ambiguous compensation standards

40% of sample: $11,000 gap in starting salary

Bowles, Babcock & McGinn, 2005

*Impact of Gender Triggers

Negotiating for Self

Negotiating for Protégé

$125,000.00$130,000.00$135,000.00$140,000.00$145,000.00$150,000.00$155,000.00$160,000.00$165,000.00$170,000.00

Male NegotiatorFemale Negotiator

Bowles, Babcock & McGinn, 2005

*Impact of Gender Triggers

Negotiating for Self

Negotiating for Protégé

$125,000.00$130,000.00$135,000.00$140,000.00$145,000.00$150,000.00$155,000.00$160,000.00$165,000.00$170,000.00

Male NegotiatorFemale Negotiator

Bowles, Babcock & McGinn, 2005

* Negotiating for career success

Many negotiations, such as those for salary, resources and promotion are ambiguous and full of gendered assumptions, so:*Reduce own & others’ ambiguity

*Identify and be aware of potential reactions to gender triggers

*Apply lessons from Axelrod’s Prisoner’s Dilemma

*The Evolution of Cooperation, Robert

Axelrod*Prisoner’s Dilemma

*Repeated for 200 moves*Round Robin Tournament

Defect

Defect

Cooperate

Cooperate

3

3

5

5

0

0 11

*The Evolution of Cooperation

Entries from game theoristsWinner: Tit-for-Tat

*Cooperate on the first round*Do whatever the other player did on all subsequent rounds

Overall, initially cooperative, reciprocal strategies did best

*Axelrod’s Lessons

Begin with cooperation Cooperate up frontNever be the first to defect.

Practice reciprocity Return cooperation for cooperation, defection for defection.

Don't be envious Aim to do as well as you can, not better than the other side.

Be clear Don't try to be tricky.

*Applying Axelrod’s Lessons to

Negotiations

* Consider your role in their choices* Manage others’ perceptions* Foster relationships* Manage resistance* Manage the process

*Consider Your Role in Their Choices

*You want them to trust you and othersAct trustworthy and build a cooperative environment

*You want them to see benefits of sustained cooperationAct cooperatively; avoid needless provocationEncourage beliefs about negative consequences

*You want them to work together to create shared valueInvolve others in developing and selling visionModel valuing others’ gains as well as your own

*You want them to reject competitive choicesSeek explicit agreement and avoid ambiguityDevelop compliance mechanisms

*Manage Others’ Perceptions

My actions

*Strategic*Long-term perspective*See the big picture*In organization’s best interests*Flexible*Collaborative

What they see

*Opportunistic*Slow*Can’t see the details*Out for herself

*Inconsistent*Manipulative

What I do is not what they see:

*Foster Relationships

Trust, accountability & reciprocity all rely on acknowledged interdependence.

Others need to believe that working with you better fits their interests than working independently or against you.

*Foster Relationships:Differentiate between Issues,

Positions & Interests

*An issue is grants management.*A position is a demand.

I want a full time research associate to handle grants management.

*Interests are the reasons behind the demand• I can’t run my studies while simultaneously writing for

grants and responding to funders. • I need to focus on publications.• I’m losing potential funding • The Department wants faculty sharing limited resources.• The Chair wants to make maximum use of limited slots.• The School wants me to publish and get promoted.

*Ask Questions to Learn About Interests

Ask about reasons Why is this important to you?Ask about priorities What are the key things you need? How important is this issue to you? Relative to others?Ask about time Does the value of this issue change over time? For how long has this been an issue?Ask about possibilities What if we did it this way? Help me understand why this will or won’t work…Use “If… , then…?” questions, “Yes…, and…” responses

If I agree on A, will you be willing to move on B?Yes, I’ll work on this, and while I’m doing this, you can…

“It were not best that we all think alike, for it is the difference in opinions that makes horses race.”

Mark Twain

*Foster Relationships: Create Connections

Who needs to be part of the negotiation? How can I appreciate their situation?How can I make them feel legitimate and understood?

Look at their story * provide opportunities to talk about concerns* ask questions about their concerns

Appreciate their ideas* leave space for multiple possibilities* link their ideas to yours

Appreciate their “face”* show respect for their position* help them exit gracefully

*Manage ResistancePeople resist for good reasons• Technical – it won’t work• Cost/Benefit – costs too high relative to benefits• Intellectual – disagree• Political – will lose alliances• Process – uncertainties• Personal costs – loss of control, power, expertise,

benefits; more work

Find out why people are resisting and deal with the source of resistance

*Manage Resistance:During Stalls, Focus on

Small Wins

Small wins are:• Concrete, complete, implemented outcomes of

moderate importance• Controllable opportunities that produce visible

results• Noticeable changes in relatively unimportant

variables or relatively small changes in important variables

A series of small wins may attract allies, deter opponents, and/or lower resistance to subsequent proposals

*Manage the Process:Get all parties into Good Starting

Positions

*Encourage everyone to consider what they want and what they’re bringing to the tableWhat is your value and how do you make it relevant?What are you hoping to achieve by working together?

*Learn as much as you can outside the negotiationWhat benchmarks can you use?What do you know about others’ perspectives and interests? How can you learn more?

*Develop alternativesWhat happens if there’s no deal – To you? To them?How can you introduce these choices into the negotiations?

*Manage the Process: Create Value through Process

Choices• Be flexible on process• Share information about interests, priorities, and

preferences• Ask questions about interests and priorities & listen to

their answers• Promote collaboration and trust by building in moves

that motivate and reward reciprocityDon’t give information or value away without getting something in return -- Unilateral collaboration does not generally provide incentives for others to collaborate

• Circle back as new issues, interests and options arise• Give it time – Be careful not to end discussions too

quickly

*Manage the Process:Keep Going when

Negotiations get Stuck

• Step away to reset perspective• Name what is happening • Explore assumptions more deeply• Explore consequences of no

agreement

*Back to why you’re here

*Consider what you wrote about your next important negotiation. *Write what you can do to improve your chances of success in your next important negotiation.

*Lead through Your Negotiations

Listen Transforms Understanding

Learn Together Transforms Relationships

Create Shared Value Agreements Transforms Own and Others’ Outcomes