CREATING A NEGOTIATION CULTURE

I'll just have the conversation. If you have a respectful conversation with somebody and you try and think of it from their point of view - then you can't go wrong.

- Christine Beveridge

What is negotiation and why does it matter?

Negotiation is commonplace in the workforce. Employees are now much more likely than in previous generations to negotiate personalised employment conditions [1]. Although most people think of negotiation as something that only occurs as a new employee to determine salary, conditions of work, and other relevant factors, negotiation occurs much more broadly after employment commences. Negotiations can occur during conversations around promotions, training and development opportunities, flexible workplace arrangements, computer technology and workspace needs, among other topics. These discussions range from large one-off resource requests to smaller everyday needs.

Whether they realise it or not, almost everyone negotiates at work. However, not everyone is successful at negotiation. This is particularly true for women.

Why is successful negotiation important?

Addressing gender inequities is beneficial for women, but also provides benefits to organisations and society as a whole. However, it is important to recognize that negotiation is gendered; outcomes for women are usually different (worse) than for men.

For women

Women experience lower financial security than men. The gender pay gap is a significant contributor to this [2]. Women working full-time earn 15% less on average than male full-time workers and retire with only just over half of the superannuation savings of men [3]. There is a clear gender difference that disadvantages women. But what has this got to do with negotiation?

Improving women’s success in negotiation has the potential to reduce this gap, leading to greater parity between women and men. If women are able to negotiate for promotions, for example, then the gender gap in leadership could be reduced. Similarly, if women can successfully negotiate working conditions, they may be more likely to stay in the workforce, continue building their careers, and receive the benefits of their superannuation accounts keeping pace with their male colleagues.

For organisations

There are clear talent shortages in the workforce [4]. Improving negotiations provides an opportunity for organisations to secure and retain talented women. Turnover of staff is costly to organization. A lack of opportunities provided to talented women, such as access to key clients, can contribute to increased turnover [5]. Organisations also lose talented women who leave when they are unable to successfully negotiate suitable working arrangements (e.g. flexible work arrangements).

Gender diversity at senior organisational levels is critical for strong organisational performance but is often disregarded [6]. Organisations that achieve gender diversity at these senior levels enjoy benefits such as increased innovation and creativity and improved decision-making [7][8][9]. Improving the negotiation culture in an organisation can help with attracting and retaining senior female leaders.

For society

Since women retire with half of the superannuation of men, they are more reliant on government pensions. Successful negotiations throughout a woman’s career can lead to financial independence, reducing reliance on government resources and costs to society.

Research suggests countries that can achieve organisation-wide gender diversity, especially at senior levels, will become more productive [10]. Achieving gender diversity is estimated to increase Australia’s gross domestic product by 11% [10], in line with similar estimates of 9% for the United States and 13% for the Eurozone [11]. Countries achieving gender diversity will therefore gain a competitive advantage over other countries [11].

Why is negotiation a gender issue?

In order to be successful, employees must build economic resources, such as a good salary package and a strong client base. At the same time, they must build social resources, such as good working relationships and solid networks. Women who seek economic resources through negotiation are seen as being hostile, selfish, devious and quarrelsome [12], which negatively impacts their social resources [13]. This backlash to women engaging in negotiation can even result in women being disliked and colleagues not wanting to work with them, even though they are still considered competent [14]. Negotiating might lead to better opportunities and economic outcomes for women, but these economic resources come at a social cost.

Poor negotiation outcomes may seem insignificant when considering a single negotiation episode. However, the ongoing accumulation of these poor outcomes can result in a large resource gap over a career. An issue is created from the onset of workers’ careers, with a graduate gender pay gap in Australia across most industries [15]. This gap builds over time into the gender pay gap mentioned previously of 15% [3].

We often hear that women do not negotiate as effectively as men. And actually this might be true! But it’s not that women are ineffective negotiators, it’s more about women having difficulties successfully negotiating, in part because they anticipate a backlash.

Gender stereotypes are a key factor in understanding negotiation failures. These stereotypes describe how men and women are perceived and how they should (and should not) behave. Research has found that women are generally perceived as communal (caring and interdependent) and men as agentic (ambitious, assertive, decisive and self-reliant) [12][16]. Negotiation involves agentic behaviours, which means women who negotiate must operate outside prescribed behavioural norms. Women who breach these behavioural norms experience backlash in the form of economic and social penalties [12].

When do women negotiate?

The decision about whether to enter into negotiation can be topic driven. Women are more likely to enter into negotiations for items that are considered feminine, such as flexibility around child care, compared to contexts considered masculine, such as discussions around compensation [17][18]. Women may feel more comfortable than men when talking about child care, as this is congruent with their gender role. This is in contrast to men who feel more comfortable than women when talking about compensation, which is congruent with the male gender role. Reducing levels of ambiguity around negotiation can remove the gendered nature of negotiation [19][20]. This can be achieved through the introduction of “zones of negotiability” discussed shortly.

Women also experience more negotiation success when they advocate for others [17][21]. When women negotiate for themselves, they are subject to backlash [12]. However, when women advocate for others they are acting within expected gender norms because they are seen as helping others [1][21]. When advocating for others, women negotiate harder and give in less than when they’re negotiating for themselves [19]. Negotiators view women in this role favourably and, in fact, may penalise women who don’t advocate for those that they’re expected to advocate for [21].

There are consistent research findings in relation to gender and negotiation. These are presented below:

When women negotiate, they experience backlash in the form of social and economic reprisals. For example, women who appear confident are seen as competent, but unlikable. These women are seen as hostile, even devious [12]. A woman who negotiates may win economic reward, but experiences a social backlash because others don’t want to work with her.

Women are less likely to negotiate. They are aware of backlash and try to avoid it. The more women anticipate backlash, the less inclined they are to initiate negotiations [13].

When women do negotiate, they ask for less and are more likely to accept an initial offer [22][23].

When people negotiate with women, they offer less and are more likely to resist influence attempts [24].

Ongoing negotiation failures accumulate into a salary gap, a career advancement gap and a superannuation gap [3].

In sum, negotiating might lead to better economic outcomes in the short term, but these economic resources come at a social cost. Women are “damned if they do and doomed if they don’t” [25].

What can organisations do to improve negotiation outcomes for women?

There is an active debate in the literature. One camp argues that women should “lean in” to succeed by speaking up and asking for what they want [26]. This camp is suggesting that the problem can be addressed by explicitly changing women’s behaviour, which is the “fix the women” argument. The other camp criticises this approach and argues that organisations need to make significant changes to give women more room to negotiate. Here, we present strategies for organisations to reduce or prevent backlash experienced by women who negotiate. We believe there is room for both approaches – if organisations create the right environment for women to be able to successfully negotiate, then women will be able to lean in.

There are strategies that organisations can adopt to create a negotiation culture, so that women can negotiate without backlash. Individual, evidence-based [1] strategies for women are presented in the Negotiating a deal section.

See - Negotiating a Deal

See “Negotiating a deal” section for individual strategies for women

Audit the data

The first step towards addressing the issues around women and negotiation is to recognise that there is an issue. This requires identifying the different outcomes for women and men in an organisation to which negotiation differences contribute. Audits can be undertaken to measure gender differences within organisations on a whole range of metrics, answering questions such as:

Do women apply for promotions as often as men?
Are there women in applicant pools for available positions and do they achieve interviews?
Compare measures such as female and male pay levels, size of research grants or office space.

Reframe negotiating as asking

A strategy that organisations can employ is to re-label negotiations as asking zones. This involves making it clear to employees that salary and other agreed items are not only open to negotiation, it is expected that people negotiate their salary. Studies have shown that making this information explicit will increase the propensity of women to enter into negotiations [27].

Regenerate stereotypes

Organisations can assist women by redefining the qualities that make good negotiators, known as stereotype regeneration. Acknowledging the importance of good listening skills, understanding negotiator and negotiation partner feelings and good expressing of thoughts, which are all stereotypical female traits, can potentially change the way negotiations take place within an organisation [23].

Create a zone of negotiability

Organisations that can create norms around what is open to negotiation and when negotiation is appropriate can reduce the issues faced by women when entering negotiations [1]. For example, organisations can create clear norms around what employment terms are open to negotiation. To encourage women to negotiate, these “zones of negotiability” need to be explicit and may include items such as salary, flexible workplace conditions, leave, training opportunities and bonuses.

Provide unconscious bias training

Increasing awareness of gender stereotypes through education of managers and employees can reduce the effect that these stereotypes have on behaviour [25]. Bias is often unconscious, meaning that individuals are unaware that they hold this bias. Programs should teach managers and employees how to recognise unconscious bias, how their actual behaviour might contradict the gender equality values that they espouse and how gender inequality impacts women. Once aware of these biases, managers and employees can then slow down their thinking, so that previously automatic (unconscious bias) responses become considered ones [16].

Three case studies demonstrating organisations tackling negotiation issues and resulting in clear positive business outcomes

Read case studies