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Determinants and Consequences of Salary Negotiations by Male and Female MBA Graduates


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Although it has been suggested that women negotiate over salaries less frequently than men, there is little empirical evidence on this point. Moreover, outside of laboratory settings, there are no investigations of whether, or to what extent, such negotiations actually pay off in higher salary outcomes for either men or women. The salary negotiating behaviors and starting salary outcomes of 205 graduating MBA students were investigated within a power and dependence theoretical framework. Results did not support the notion that women negotiate less than men. However, women did obtain lower monetary returns from negotiation (4.3% starting salary increment for men versus 2.7% for women). Over the course of a career, the accumulation of such differences may be substantial. Implications and suggestions for future research are discussed. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Cornell University ILR School
CAHRS Working Paper Series
Center for Advanced Human Resource Studies
Determinants and Consequences of Salary
Negotiations by Graduating Male and Female
Barry A. Gerhart
Cornell University
Sara L. Rynes
Cornell University
is Article is brought to you for free and open access by the Center for Advanced Human Resource Studies (CAHRS) at DigitalCommons@ILR. It
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Determinants and Consequences of Salary Negotiations by Graduating
Male and Female MBAs
Although it has been suggested that women negotiate over salaries less frequently than men, there is lile
empirical evidence on this point. Moreover, outside of laboratory seings, there are no investigations of
whether, or to what extent, such negotiations actually payo in higher salary outcomes for either men or
women. Using a power and dependence theoretical framework, the present research investigated the salary
negotiating behaviors and starting salary outcomes of 205 graduating MBA students. Results did not support
the notion that women negotiate less than men. However, women did obtain lower monetary returns to
negotiation (4.3% starting salary increment for men versus 2.7% for women). Over the course of a career, the
accumulation of such dierences may be substantial. Implications and suggestions for future research are
CAHRS, ILR, center, human resource, job, worker, advanced, labor market, satisfaction, employee, work,
salaries, women, men, male, female, salary, MBA, student
Suggested Citation
Gerhart, B., & Rynes, S. (1989). Determinants and consequences of salary negotiations by graduating male and
female MBAs (CAHRS Working Paper #89-16). Ithaca, NY: Cornell University, School of Industrial and
Labor Relations, Center for Advanced Human Resource Studies.
is article is available at DigitalCommons@ILR: hp://
Determinants and Consequences of Salary
Negotiations by Graduating Male and
Female MBAs
Barry Gerhart
Cornell University
Sara Rynes
Cornell University
Working Paper #89-16
(Revised May 1990)
Center for Advanced Human Resource Studies
New York State School of Industrial & Labor Relations
Cornell University
Ithaca, N.Y. 14851-0952
(607) 255-3279
This paper has not undergone formal review or approval of the faculty of the ILR School.
It is intended to make the results of Center research, conferences, and projects available to
others interested in human resource management in preliminary form to encourage
discussion and suggestions.
Salary Negotiations
Although it has been suggested that women negotiate over salaries less
frequently than men, there is little empirical evidence on this point. Moreover,
outside of laboratory settings, there are no investigations of whether, or to what
extent, such negotiations actually payoff in higher salary outcomes for either men
or women. Using a power and dependence theoretical framework, the present
research investigated the salary negotiating behaviors and starting salary outcomes of
205 graduating MBA students. Results did not support the notion that women
negotiate less than men. However, women did obtain lower monetary returns to
negotiation (4.3% starting salary increment for men versus 2.7% for women). Over
the course of a career, the accumulation of such differences may be substantial.
Implications and suggestions for future research are discussed.
Salary Negotiations
Determinants and Consequences of Salary
Negotiations by Graduating Male and Female MBAs
Starting salaries can have a lasting impact on career earnings. For example,
salary increases are commonly awarded as percentages of base pay (e.g., Milkovich
& Newman, 1987). In turn, base pay generally becomes the basis for other forms
of compensation (e.g., pensions, profit-sharing, stock options). Additionally, the
impact of starting salary in one company can be carried over to others through the
common practice of setting salaries for experienced workers in relation to their
previous salaries (e.g., Kouba and EEOC v. Allstate Insurance Company, 1982).
The fact that initial differences in starting salaries may be perpetuated, or
even exacerbated, over an entire career has implications for the well-documented
male-female earnings gap (e.g. Cain, 1986). For example, Gerhan and Milkovich's
(1989) examination of a large corporation's exempt employee data base showed that
despite women's larger annual increases after hire, women's salaries continued to
lag behind those of men. Further, these losses, which continued to accumulate
throughout the women's careers, were largely attributable to a one-time staning
salary disadvantage (Gerhan, 1990). Lower starting salaries for women, controlling
for productivity-related characteristics, have been reponed by other researchers as
well (e.g., Devanna, 1984; Reder, 1978; Strober, 1982), although not universally
(Gordon & Strober, 1978).
Given the potential long-term consequences of differences in staning salaries,
it is important to determine their origins. Most empirical investigations of gender-
based earnings differentials have focused primarily on the role of human capital
characteristics such as education or experience. A second and smaller group has
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focused on potential gender differences in preferences for various job attributes (e.g.,
pay versus pleasant working conditions; Daymont & Andrisiani, 1984; Filer, 1986).
Despite such attempts, a substantial portion of the earnings gap remains unexplained
(Treiman & Hartmann, 1981; Cain, 1986). Thus, efforts continue to find additional
One potential explanation may lie in a differential tendency of men and
women to negotiate over salaries. Although this difference has been widely
hypothesized (e.g., Bird, 1981; Brenner & Bertsch, 1983; Major, Vanderslice &
McFarlin, 1984; Subich, Barrett, Doverspike & Alexander, 1989), there is a
surprising lack of empirical evidence on this point. In fact, the more general
question of when people choose to negotiate has been largely overlooked by
empirical researchers (Neale & Northcraft, undated). Rather, most negotiations
literature has focused on differences in negotiating tactics once a decision has been
made (or more commonly, a laboratory instruction been given) to negotiate (e.g.,
Rubin & Brown, 1975; Lewicki & Utterer, 1985; Kolb & Coolidge, 1988).
Despite the lack of empirical evidence on gender differences in negotiating
propensity, there is a fairly well-developed theory of when negotiations are likely to
occur in general. At their most basic level, most models of negotiating propensity
focus on two sets of explanatory variables: structural and individual (e.g., Rubin &
Brown, 1975).
Structural explanations of bargaining propensity focus on factors that
influence a potential negotiator's power and dependence vis g vis the other party
(Bacharach & Lawler, 1981; Chamberlain, 1955; Thibaut & Kelley, 1959). For
example, one basic proposition of such models is that the presence of alternatives
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(in the present case, alternative job offers) reduces one's dependence on the other
party and, as a result, increases one's bargaining power (e.g., Mannix, Thompson &
Bazerman, 1989). Thus, a job seeker with multiple alternatives should be more
likely to bargain because of his reduced dependence on any single alternative for a
source of income (Sondak & Bazerman, forthcoming).
A second structural proposition is that the propensity to negotiate for an
improvement in terms is inversely related to the attractiveness of the offer (e.g.,
Bacharach & Lawler, 1981; Chamberlain, 1955). Attractiveness may be assessed
relative to one's alternatives (Thibault & Kelley, 1959). Therefore, the implication
is that people are more likely to negotiate to the extent that the relative
attractiveness of an offer is low. In the present context, this suggests that the
propensity to bargain will be greater for those with a less attractive (e.g., lower-
paying) job offer.
Based on environmental or structural components, then, bargaining theories
suggest that gender differences in negotiation will occur to the extent that (a) men
and women face different alternative opportunity sets (e.g., have different numbers
and salary levels of job offers), or (b) generate offers of differing attractiveness
(e.g., with different statting salaries).
In addition to structural factors, bargaining theories also propose that
negotiating behaviors differ as a function of personal characteristics. If so, gender
differences in negotiations might occur as a result of differences in factors such as
expectations, personality characteristics, or behaviors.
Although empirical evidence is lacking, the literature suggests a number of
personal characteristics that might be associated with gender differences in
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negotiating propensity. For example, Major and her colleagues have suggested that
women may have lower pay expectations than men, even controlling for occupation
(e.g., Major, McFarlin & Gagnon, 1984a). Differential expectations might result
from the use of different social comparison standards (i.e., women's expectations
may be based on "typical female" salaries; men's on male salaries; Adams, 1963;
Major, 1987) or less accurate market information (e.g., Major & Konar, 1984;
Subich, et al., 1989).
In addition to gender differences in pay expectations, a number of personality
characteristics have also been highlighted as potential sources of differential
bargaining propensities between men and women. These include possible sex
differences in self-confidence (Ragins & Sundstrom, 1989), interpersonal orientation
(Rubin & Brown, 1975), preference for harmony (Kolb & Coolidge, 1988), and self-
perceptions of assertiveness (Watson & Kasten, undated).
Finally, in addition to differences in expectations and personality, women
may also exhibit different bargaining-related behaviors than men. For example,
Watson and Kasten (undated) observed that women behaved less assertively than
men in a negotiating task, even though they perceived themselves to be equally
assertive. In general, however, no clear-cut pattern of gender differences in
bargaining tactics has emerged (Rubin & Brown, 1975; Lewicki & Utterer, 1985;
Kolb & Coolidge, 1988).
In summary, it has been proposed that one potential contributor to the
earnings gap may be differences in negotiating propensity between men and women.
To the extent that such differences exist, bargaining theories suggest that the causes
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are likely to arise from either structural factors (e.g., number or characteristics of
alternatives) or personal characteristics (expectations, personality, behaviors).
However, whether or not men and women differ in their propensity to
bargain, a gap in earnings will result if the sexes receive different payoffs to
negotiation. Thus, an additional question is whether women receive the same
returns to salary negotiation as men. Several types of evidence suggest that they
may not.
For example, Nieva and Gutek (1980) have suggested sex bias is increasingly
likely to the extent that employers have little individual productivity-related
information available to them. This hypothesis, which has received meta-analytic
support (Tosi and Einbender, 1985), may be particularly relevant to the case of
starting salaries, given that only general qualifications information is typically
available for external job applicants. For example, a meta-analysis by Olian,
Schwab, and Haberfeld (1988) found that male applicants were preferred over
females, controlling for general qualifications.
Extending this finding from staffing to compensation decisions, starting salary
offers to women may be correspondingly lower as well. Although field evidence is
lacking, a laboratory study by Major, et al. (1984b) found suggestive evidence that
hypothetical male job applicants were assigned higher starting salaries than
hypothetical females with the same pay expectations.
Additionally, a survey of general managers, compensation administrators, and
union members revealed that a substantial percentage of each group (48%, 28%, and
45%, respectively) viewed women's willingness to work for less money as either an
"extremely" or a "very important" cause of lower pay for women (Rynes, Rosen &
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Mahoney, 1984). To the extent that such beliefs influence managerial decisions,
employers may feel less urgency to respond to negotiation attempts by female
Finally, Dreher, Dougheny, and Whitely (1989) found that women who
reported using an "exchange" (i.e., quid pro quo) type of influence tactic had lower
current salaries than other women, whereas men who used this tactic had higher
salaries than other men. The authors speculated that women may be penalized for
bargaining because such tactics violate managers' expectations about" appropriate"
female behavior.
In summary, despite suggestions that women (a) negotiate over salaries less
frequently than men and (b) receive lower returns to those negotiations, empirical
evidence on these points is lacking, particularly in field settings. Indeed, the more
general question of when people will choose to negotiate has received little prior
empirical attention. This is a curious omission, given the potential implications for
both employer pay-setting and employee pay (as well as pay differentials).
The present study uses field data on MBA job seekers to investigate
structural and individual determinants of both the probability, and payoffs, to salary
negotiations among men and women. As pointed out by Kolb & Coolidge (1988)
and Subich et al. (1989), field data are likely to be particularly critical for
examining potential sex differences in negotiating behavior. To the extent that men
and women differ on such characteristics as interpersonal orientation (Rubin &
Brown, 1975) or preference for harmony (Kolb & Coolidge, 1988), sex differences
are more likely to emerge in the context of negotiating over real, long-term
relationships than in brief hypothetical laboratory simulations.
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Hypotheses fall into two categories: those concerning propensity to bargain
and those concerning payoffs to bargaining. Turning first to bargaining propensity,
two hypothesized structural determinants are examined. First, in keeping with the
hypothesis that negotiation is more likely for less attractive offers (Chamberlain,
1955; Bacharach & Lawler, 1981), we predict that salary negotiations will be more
prevalent for jobs with relatively low salary offers (HI), Second, in line with the
notion that negotiation is a function of one's other alternatives, we predict that the
probability of negotiation will increase to the extent that an applicant has (a)
alternative job offers with (b) relatively high salaries (Hz).
According to our model, negotiation propensity is also a function of personal
characteristics. In the present situation, the inclusion of structural factors (see HI
and Hz), the ability to control for applicant qualifications (business experience, grade
point average, major), and the focus on a relatively well-defined labor market
(newly graduated MBAs from a single program; see Reder, 1978 and Stigler, 1962)
suggests that any observed differences in negotiating propensity between and women
should not be due to the negotiation environment. However, to the extent that men
and women differ on such personal characteristics as pay expectations, preferences
for money, asseniveness, and the like, we would expect men to be more likely to
negotiate over starting salaries than women (H3).
In addition to possible differences in negotiating propensity, we are also
interested in potential differences in payoffs to negotiation. In line with previous
arguments that employers may respond differently to negotiation by males and
females (e.g., Dreher, et aI., 1989; Major, et aI., 1984b; Rynes, et aI., 1985), we
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predict that women will receive lower salary payoffs to negotiation (H4), controlling
for all previously mentioned factors (e.g., human capital characteristics, initial salary
offer, number and characteristics of alternative job offers).
Data on bargaining behavior and job offers were provided by a survey of
MBA students graduating from a nationally ranked (top five to top twenty,
depending on the poll) Ivy League business school during the 1987-88 and 1988-89
recruiting seasons. A total of 205 students (153 men, 52 women) participated in
this research. Although 431 students graduated in these two years, it is difficult to
calculate a precise response rate. For example, some students did not actively
search for work (and hence did not complete the questionnaire) because they were
employed upon entering graduate school and returned to the same employer after
graduation. Others did not respond because they had not generated an offer prior to
graduation. Finally, data from foreign students were excluded because of legal
restrictions governing their employability. Consequently, the apparent response rate
of 48% is something of an underestimate.
Information about negotiation was collected as a small part of a larger survey
on job search strategies and outcomes conducted for the school's placement office.
The general purpose of the survey was to obtain evidence on which job search
strategies resulted in the best job-finding success. The placement director hoped to
use such information as a basis for advising future job seekers and for validating
admissions criteria against job-hiring criteria. Of relevance to the present study was
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a small subset of questions that asked about alternative salary offers from other
firms, negotiations over starting salary, and actual accepted salary.
Measures and Analyses
Bargaining propensity. The dependent variable in the first analysis was
whether or not the student negotiated for a salary higher than that initially offered
by the organization with which s/he eventually accepted a job offer. The
independent variables and their corresponding hypotheses were: initial salary offer
for the accepted job (HI); number of alternative offers received from other
organizations (Hz); highest alternative salary offer minus the initial salary offer!
gender (H3), and gender interactions with the first three independent variables
Because the assumptions of ordinary least squares (OLS) are typically
violated when the dependent variable is dichotomous, probit analysis (Hanushek &
Jackson, 1977) was used to model the probability of engaging in negotiating
behavior. In addition, its functional form (which assumes diminishing returns at
extreme values of the independent variables), is often more appropriate for
probability models. Predicted values from the probit model represent values of a
standard normal variable. Thus, the probability is obtained by looking up the
predicted value in a z-table.
Bargaining payoff. In this analysis, the dependent variable was accepted
starting salary (base pay only). All analyses were performed using OLS regressions.
The independent variables were initial salary offer, number of alternative offers,
highest salary offer, whether or not the person negotiated, gender, and a gender x
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negotiation tenn. This last tenn, if significant, would indicate a higher payoff to
negotiation for one of the sexes.
Both analyses (propensity and payoff) also included a year dummy variable
(1988 versus 1989) to control for inflation and differences in labor market
conditions. Finally, to the assess the robustness of the results, both analyses were
also conducted with the following individual control variables: grade point average,
major (e.g. finance, marketing), industry (17 dummy variables), previous business
experience, and whether a negotiation course had been taken during the MBA
Table 1 repons summary statistics.
Table 2 repons probit estimates for the probability of negotiating for a higher
staning salary. Equation la indicates that, as predicted by HI, students were more
likely to engage in salary negotiations to the extent they had a low initial salary
offer. In addition, H2 was also supported by the fact that negotiations were more
likely where both the number, and salary levels, of alternative job offers were high.
In contrast, (H3) was not supported. Gender did not have a main effect on
negotiating probabilities. Likewise, comparison of equations la and 2a revealed no
suppon for any interactions with gender (chi-square = .95, d.f. = 3). Adding
additional controls (see equations 1band 2b) similarly did not change the role of
In summary, as hypothesized by our model, structural conditions did predict
bargaining propensity for both male and female graduates. However, given the
same structural conditions, there were no sex differences in negotiation propensity.
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(Insert Tables 1, 2 and 3 about here)
Even though negotiation attempts did not differ by gender, men and women
might nevertheless have received different returns to their negotiations. Table 3
reports findings concerning the monetary payoffs to negotiation. The significant
coefficient for the bargaining variable in equations 1a and 1b suggests that, on
average, bargaining led to higher final salaries (4.1 %) for both men and women.
Nevertheless, the significant gender x negotiation term indicates that the payoffs
were larger to men than to women ($906 in the model including personal control
variables versus $742 without controls). Thus, Hypothesis 4 was supported.
Consistent with most bargaining models, our findings suggest that the
propensity to negotiate is a function of structural factors that influence a potential
negotiator's relative bargaining power. Specifically, in the present context, the
propensity to negotiate starting salaries was found to be a function of the
attractiveness of the initial offer, as well as the existence and attractiveness of
alternative offers.
In contrast, we found no support for any gender differences in bargaining,
suggesting that when men and women face the same opportunity sets their
propensity to negotiate does not differ. Thus, our findings suggest that it may be
structural factors that determine salary negotiation behavior, not gender. These
results are consistent with previous literature reviews suggesting that structural or
environmental factors may be significantly more important than personal factors in
determining negotiation outcomes (Lewicki & Utterer, 1985; Hamner, 1980).
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Of course, the failure to find significant gender effects may be partly a
function of the relative homogeneity of this particular sample.
For example,
previous research has shown that there are fewer gender-related trait differences
among managerial than nonmanagerial samples (see Dipboye, 1987). Similarly,
extensive opportunities for information exchange in the labor market for new MBAs
may have reduced sex differences in expectations and aspirations as well. However,
applying analogous arguments, this highly centralized, relatively well-defined labor
market is also likely to have produced relative homogeneity of structural
opportunities. Yet these structural opportunity factors were shown to predict
bargaining behaviors, whereas gender (and all possible underlying factors) was not.
Although men and women did not vary in their propensity to bargain, the
payoff to such bargaining did vary by gender. Even though both men and women
received higher final starting salaries as a result of negotiations, women's payoff
was less than men's (2.7% versus 4.3%, based on equation la from Table 3 and the
mean starting salaries reported in Table 1). In addition, the larger payoff to
negotiating men (versus negotiating women) had the effect of widening the overall
male salary advantage from 2.1 % for the original offer, to 2.5% for the accepted
one. In other words, differential bargaining payoffs accounted for roughly 16%
(0.4%/2.5%) of men's final starting salary advantage.2
This observed difference in payoffs is consistent with at least two quite
different explanations. First, the employers in this sample may have been less
responsive to the negotiating behaviors of women than men. Extrapolating from
previous research, such a result might occur due to negative reactions to atypical
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"female" behavior (e.g., Dreher et aI., 1989), or to beliefs that when push comes to
shove, women will work for less money than men (Rynes et aI., 1985).
Alternatively, it is possible that the male job seekers in this sample used
more effective bargaining tactics, or used the same tactics more skillfully than the
women. Although previous research has sometimes found evidence that men and
women use different negotiation tactics (e.g. Kimmel, Pruitt, Magenau, Konar-
Goldband, & Carnevale, 1980), consistent evidence on the differential effectiveness
of such tactics is lacking. Although these two explanations are not mutually
exclusively, their implications are very different, indicating a clear need for
additional research in this area.
Finally, it should be noted that the practical importance of the greater payoff
to bargaining among men depends on a number of factors. For example, over a 30-
year career with men and women each averaging 7% annual increases, the initial
$742 bargaining payoff advantage (again using equation la, Table 3) would translate
into a 30-year career advantage of $75,738.3 However, in the Gerhart and
Milkovich (1989) study, among entry-level college graduates, women's salary
increases were 1.03 times as large as men's (after adjusting for experience,
education, and so on). If the women in our sample were to realize the same
advantage, they would catch up with men in their 10th year of employment. Up to
that point, their estimated losses would be $3,922. The corresponding present
values for the preceding two estimates would also be lower. For example, based on
a discount rate of 5%, the present value advantages would be $29,489 and $3,323,
respectively. As a final note, the male-female pay differential in the present study
was substantially smaller than that observed by Gerhart and Milkovich. To the
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extent that larger pay increases for women are a response to a pay shonfall on their
part, we should see less of a salary growth advantage for women in our study. To
the degree this is true, we would expect the present value of women's cumulative
pay shonfall to be closer to $29,489 than to $3,233.
Future Research
Our study provides the first empirical field evidence on both the propensity
to engage in actual salary negotiations and their monetary payoffs to men and
women. In designing this research, we were struck by the lack of previous research
on either the prevalence, or success, of individual salary negotiations of any type.4
Thus, in addition to helping explain gender-based pay differences, additional field
work on actual salary negotiations would make an important contribution to the
general body of knowledge about pay-setting practices and effects. Similarly, as
Neale and Nonhcraft (no date) have pointed out, the negotiation literature is
surprisingly limited on the question of when (versus how) a person chooses to
negotiate. We suggest that future researchers focus on the following issues.
First, although the present study provided the first evidence on actual salary
negotiations, a limitation was the lack of information available on the actual
negotiating arguments, styles, and tactics used by successful (versus unsuccessful)
male and female negotiators (see also Subich, et aI., 1989). Although the laboratory
offers the opportunity for independent observation of behavior, it suffers from a lack
of appropriate context--the existence (or high potential) of an ongoing relationship.
If field research is conducted, evidence of interobserver agreement (e.g., regarding
the types of tactics and the skill with which they are used) would be helpful.
Salary NegOtiations
Second, it would be instructive to determine the extent to which bargaining
propensities generalize across tasks and situations other than starting salary
negotiations. In particular, it would be useful to broaden our knowledge of the
extent to which bargaining is structurally, versus individually, determined. To that
end, Neale and Northcraft (undated) have developed a scale to assess individual
differences in bargaining propensities. To the extent that bargaining behaviors have
a dispositional component, any measured advantage due to starting salary
negotiations may be compounded by additional returns to side negotiations over
such things as benefits, perquisites, or subsequent salary increases.5
Third, future research should examine bargaining behavior in a multiattribute
context. Although the present study focused on the role of starting salary in job
choice negotiations, other job attributes may also be targets (or determinants) of
negotiation. For example, the fact that many of our subjects negotiated with
employers offering lower salaries (rather than accepting the high salary offer)
suggests that job seekers often entered into salary negotiations because of desired
nonpecuniary job attributes.
Fourth, additional field research is needed to determine both the short- and
long-term impacts of conducting successful, versus unsuccessful, negotiating
attempts. For example, in the short term, it would be interesting to know whether
initial bargaining successes breed greater job search confidence and additional
bargaining, or whether failure results in reduced self-confidence, curtailed job search,
or offer tUrn-downs. The longer-term implications of successful versus failed
bargains (e.g., job satisfaction, length of service, future bargaining attempts) are also
important both to job seekers and employers.
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Fifth, it would be helpful to study the reactions (both process and outcomes)
of those who are the targets of negotiation.
For example, if targets are found to
respond less favorably to female than male demands for more money, it would be
imponant to determine the source of this difference (e.g., negative reactions to
female "pushiness," versus different beliefs about the consequences of underpaying
men versus women). It would also be interesting to know whether targets appear to
be conscious of their motivations, or whether male targets respond differently than
Finally, it would be useful to funher examine the extent to which structural
factors influence negotiation propensity and possible gender differences. For
example, one implication of our model is that job seekers are less likely to
negotiate when they have substantially fewer, or less lucrative, alternative job offers.
At present, we do not know whether men and women respond similarly to large
advantages (or disadvantages) in opportunity. We also do not know the extent to
whether men and women differ in their tendencies to generate multiple offers
merely as a tactic for obtaining bargaining advantage. Other relevant structural
factors raised earlier may be the amount of opponunity for social comparison and
information exchange in the labor market, as well as the amount of standardization
in applicant and job attributes.
In summary, despite frequent anecdotal references to the likelihood of gender
differences in negotiating behaviors and the likely imponance of those differences
for reward outcomes, empirical research on this topic is surprisingly scarce. As we
have shown, even small differences in outcomes for just one kind of negotiation
(statting salary) can add up to large differences over an entire career. To the extent
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that individual propensities to bargain (and successes in doing so) generalize across
a variety of potential negotiation situations, the returns to negotiating behaviors (or,
alternatively, the penalties for failing to engage in such behaviors) may be
substantial indeed. Moreover, the existence of individual or group differences in
bargaining behaviors and outcomes could have important implications for employers
as well. As such, further research should examine these behaviors over a wider
variety of subjects, settings, and potential negotiation issues.
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l.This definition is consistent with our hypothesis that attractiveness is judged in relative
terms. Note also that we followed the convention of setting the highest alternative salary
offer equal to the initial offer when there were no alternative offers.
2.Supplementary analyses further revealed that differences in final starting salaries did not
result from differential gender-based tendencies to reject the highest offer.
3.0ur results are based on the $742 estimate from equation la because the controls added
in equation 1b did not improve the fit of the model. Naturally, the projected long-term
pay shortfalls for women would be larger if the $907 estimate from equation 1b were to be
4.0ne partial exception is an unpublished study by Mannix and Bazerman (1988). They
reported that 41 of the 135 (30%) surveyed MBAs did negotiate over starting salaries.
However, they did not report information about gender differences or the determinants or
consequences of negotiation.
5.Additional data from the our research suggest that bargaining over benefits and
perquisites is at least as prevalent as negotiating over salaries per se. However, it proved
difficult to attach precise monetary values to some of these items.
Table 1
Women Men
Mean Standard Mean Standard
= yes,
0 = no)
.154 .364 .229 .421
Accepted Starting Salary
$46,626 $7,906
Salary Offer
$45,255 $7,895 $46,167 $8,069
Highest Alternative Offer
$ 2,311
$3,275 $ 3,478 $ 7,927
Number of Alternative Offers
1.558 1.765 1.758 1.698
Grade Point Average
.276 3.447 .284
Business Experience
29.096 28.291 23.222 24.515 1.43
.077 .269 .046 .210
.269 .449 .556
.346 .480 .105 .307
.462 .293 .422 0.18
Note: Number of observations = 205 (52 women, 153 men)
aDifference = Highest Alternative Salary Offer - Initial Salary Offer
Table 2
Probability of Negotiating for a Higher Salary, Probit Estimates
Initial Salary Offer
Highest Alternative Offer (diff)b
Number of Alternative Offers
.211 *&
Gender (Men = 1, Women = 0)
Gender x Highest Alternative Offer
Gender x Initial Salary Offer
Gender x Number of Alternative Offers
-2 times log likelihood ratio
Degrees of Freedom
- .513&
Note: Equations 1a and 2a control for year only.
Equations 1b and 2b control for year,
&Coefficient is multiplied by 10,000
~ifference = Highest Alternative Salary Offer - Initial Salary Offer
p < .05, one-tailed;
p < .01, one-tailed
industry, major, grade point average, business experience, and completion of a negotiation
Table 3
Determinants of Accepted Starting Salary, Ordinary Least Squares
Initial Salary Offer
Highest Alternative Offer (diff)a
Number of Alternative Offers
Negotiated (1 = Yes, 0 = No)
Gender (Men = 1, Women =
Gender x Negotiated
Note: Equation 1a (F
8,197= 1752.01) controls for year only.
Equation 1b (F
28,177 = 430.35) controls for year, industry, major,
grade point average, business experience, and completion of a
negotiation course. Column entries are unstandardized
-Difference = Highest Alternative Salary Offer - Initial Salary
~ased on formula appearing in Cohen and Cohen (1983, p. 106)
* P < .05, one-tailed;
p < .01, one-tailed
... Nevertheless, behavioral differences between genders along other dimensions might still manifest in a pay disparity among NPO executives. In particular, prior studies argue that gender differences in willingness to negotiate or success in negotiation contribute to the pay gap (Gerhart and Rynes 1991;Babcock and Laschever 2003). Archival field evidence supporting this proposition, however, is limited. ...
... While prior research documents how labor force participation, self-selection, and risk preferences influence the gender pay gap (see Blau and Kahn 2017 for a review), a developing stream of literature considers how gender differences in negotiating might also contribute. In a laboratory experiment, Babcock and Laschever (2003) document that women are less likely to initiate compensation negotiations than men, although Gerhart and Rynes (1991) do not find any difference on this dimension in a small survey of MBA graduates. However, Gerhart and Rynes (1991) observe that returns from negotiation are lower for women. ...
... In a laboratory experiment, Babcock and Laschever (2003) document that women are less likely to initiate compensation negotiations than men, although Gerhart and Rynes (1991) do not find any difference on this dimension in a small survey of MBA graduates. However, Gerhart and Rynes (1991) observe that returns from negotiation are lower for women. In another laboratory experiment, Bowles et al. (2007) find that female job candidates are more likely to negotiate compensation when the individual they are negotiating with is also female, highlighting how contextual factors in the workplace environment can affect gender differences in negotiation. ...
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This study examines gender pay gaps among nonprofit executives and how compensation negotiability influences these disparities. Using tax return data from IRS Form 990 filings, we find that females earn 8.9% lower total compensation than men in our sample. Further, we observe that settings more conducive to negotiation manifest in larger pay disparities, whereas settings that limit executives’ opportunities to negotiate or that encourage females in particular to negotiate produce smaller gender pay gaps. Our nonprofit setting constrains mechanisms, such as labor force participation rates and risk preferences, that are thought to explain the pay gap, and our results are robust to using a Heckman correction model and matched samples. These findings provide evidence from a large-scale archival dataset of a plausible mechanism for the gender pay gap and point to a potential cost of work environments where negotiations play a larger role in setting compensation.
... Whereas there are extensive statistics about average salary at the societal level, there is less research on starting salary at the individual level. Studying starting salary is essential because it is often the basis for future salary increases and other types of compensation (e.g., pensions; Gerhart, 1990;Gerhart & Rynes, 1991). Although Asians have the highest average salary in American society, this is largely a function of their high educational attainment (U.S. Census Bureau, 2021). ...
... Whereas past studies on negotiation propensity were mostly conducted with negotiation simulations in the laboratory (cf. Gerhart & Rynes, 1991;Marks & Harold, 2011), our field studies have high ecological validity because we examined the negotiation propensity and outcomes of actual employees. Moreover, our 19-year MBA data set is among the first to reveal how negotiation propensity is influenced by industry negotiation norm (consulting industry vs. non-consulting industries), which remains understudied in the literature. ...
... Consistent with this adage, much research has documented the economic benefits of negotiation (Marks & Harold, 2011;O'Shea & Bush, 2002). For example, a study of MBA graduates found that 56% of those who negotiated obtained higher salaries as a result (Gerhart & Rynes, 1991). Another study of new employees found that "those who chose to negotiate increased their starting salaries by an average of $5000" (Marks & Harold, 2011, p. 371). ...
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In the US, Asians are commonly viewed as the “model minority” because of their economic prosperity. We challenge this rosy view by revealing that certain Asian groups may be susceptible to lower starting salaries. In Study 1, we analyzed 19 class years of MBAs who accepted full-time job offers in the US. At first glance, Asians appeared to have starting salaries similarly high as Whites’. However, a striking gap emerged once we distinguished between East Asians (e.g., ethnic Chinese), Southeast Asians (e.g., ethnic Vietnamese), and South Asians (e.g., ethnic Indians): Whereas South Asians started with the highest salaries of all ethnicities, East/Southeast Asians were near the bottom. This salary gap was mediated by East/Southeast Asians’ propensity to not negotiate due to higher relational concerns. Importantly, negotiation predicted higher salary for each of the three groups (East/Southeast Asians, South Asians, and Whites). In further support of negotiation propensity as a mechanism, we identified industry as a boundary condition: The salary gap was not observed for consulting jobs, where MBA starting salaries are typically standard and non-negotiable. The non-consulting salary gap between East/Southeast and South Asians was estimated to be $4,002/year, a sizable difference that can compound over career life. Study 2 found similar results in a non-MBA sample while further accounting for individuals’ bargaining power (e.g., the number of alternative offers, the highest alternative offer). In revealing the differences between East/Southeast and South Asians, this research moves beyond the predominant West-vs-East paradigm, and reveals a more complex reality underneath Asian prosperity.
... However, the bargaining table can also be a barrier to advancement for socially stigmatized groups. Decades of research suggest that women fare worse in negotiations than men: From negotiating salary to the price of a car, women receive fewer returns from negotiation on average, ultimately earning less and paying more (Ayres, 1990;Gerhart & Rynes, 1991;Mazei et al., 2015;Stuhlmacher & Walters, 1999). Over time, these differences in outcomes of individual negotiations can accumulate into substantial gaps in compensation, promotion, and opportunity, reinforcing inequality in the workplace and beyond (Bowles et al., 2005;Gerhart & Rynes, 1991;Sturm, 2009). ...
... Decades of research suggest that women fare worse in negotiations than men: From negotiating salary to the price of a car, women receive fewer returns from negotiation on average, ultimately earning less and paying more (Ayres, 1990;Gerhart & Rynes, 1991;Mazei et al., 2015;Stuhlmacher & Walters, 1999). Over time, these differences in outcomes of individual negotiations can accumulate into substantial gaps in compensation, promotion, and opportunity, reinforcing inequality in the workplace and beyond (Bowles et al., 2005;Gerhart & Rynes, 1991;Sturm, 2009). ...
Gender disparities in negotiation outcomes contribute to inequality in the workplace and beyond. Explanations of gender gaps in negotiation often focus on internal barriers women face as a consequence of contending with stigma in the workplace and other historically male‐dominated environments, such as stereotype threat and apprehension about negotiating. However, stigma is also associated with relational consequences that may influence success in negotiations. This research compared internal and relational mechanisms for gender disparities in negotiation performance. Seventy‐seven MBA executives reported their apprehension about negotiating, stereotype threat in negotiations, mindset about negotiation‐related stress, and class social networks. Participants were then randomly paired to complete a series of one‐on‐one negotiations based on real‐world scenarios. Overall, men outperformed women in negotiations. Significant gender differences emerged in stereotype threat, stress mindset, and social network centrality. However, only network centrality—specifically number and strength of ties—significantly mediated the relationship between gender and negotiation performance. Position in informal social networks may play an important role in negotiation outcomes, particularly in a shared social environment like the workplace. Although efforts to explain the gender gap in negotiation performance often center internal psychological mechanisms, this research suggests that relational explanations, such as disparities in social networks, merit further attention. Limitations and recommendations for future research and policy are discussed.
... Gender differences are prominent in research on adults and work in terms of pay, equity (in roles and responsibilities), and promotion and advancement in which women are often disadvantaged (e.g., Greig 2008;Kroska 2003); however, negotiating for pay is another source contributing to the gender wage gap. Future salary increases and benefit rates are commonly awarded based on starting rate of pay (Gerhart and Rynes 1991;Kugler et al. 2018;Rubin and Brown 1975;Thompson et al. 2010), and can have a drastic financial impact across a career. Assuming a five-percent wage increase over a 40-year career, an employee with a starting salary of $55,000 can earn nearly $635,000 more across their career compared to a counterpart with a starting salary of $50,000 (Marks and Harold 2009). ...
... Overall, women are less likely to initiate and participate in negotiations compared to men (Babcock et al. 2006;Gerhart and Rynes 1991;Hernandez-Arenaz and Iriberri 2019;Kugler et al. 2018;O'Shea and Bush 2002), and individual differences in the type of negotiation strategies used also account for who is likely to initiate and receive benefit from the negotiation attempt (Marks and Harold 2009). Social role theory explains that beliefs about assumed gender roles guide the perceptions of men's and women's social roles within society (Eagly and Wood 2012), which contributes to the assignment of gender-specific attitudes in negotiation situations. ...
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Early experiences in the home and at school provide opportunities for young workers to acquire foundational financial literacy knowledge and skills. Among adults, documented gender differences exist in terms of financial knowledge, remuneration, and negotiation in the workplace. The current study surveyed adolescent early workers (N = 268; 51% female) aged 18–19 years to assess gender differences in perceptions of and experiences with early work, remuneration, and negotiation. Key findings supported some patterns of gender disparities. Females reported learning less about finances in school compared to males and reported being paid less for casual jobs than their male counterparts. While few early workers had any previous negotiation experience, success rate of a negotiator was predicted by characteristics related to existing gender norms. The study provides evidence of some gender differences in financial knowledge and negotiation behavior among early workers and supports the need for additional educational support and opportunities in these domains.
... Employability perceptions are important career indicators that determine the number and quality of job options (e.g., Feldman, 1996;Gerhart & Rynes, 1991;Leana & Feldman, 1995;Marks & Harold, 2011) and by that can alter entrepreneurs' career trajectories toward their "upward, downward, or lateral mobility" (Burton et al., 2016, p. 241). By conceptually informing employability perceptions, categorization theories also provide a new perspective toward the entrepreneurial careers literature that has predominantly dealt with post-hire administrative data estimating the economic returns from entrepreneurship in paid employment (e.g., . ...
Entrepreneurship is not a final career destination. Accordingly, there is an emerging debate in the entrepreneurial careers literature about the employability of former entrepreneurs in subsequent paid employment. By investigating income distributions, current research proposes both earning premiums and wage penalties for former entrepreneurs. Despite the meaningful contributions of this research, the literature occurs predominantly on the macro-economic level with large-scale administrative data, concentrates on post-hire performance measures for such individuals with a “successful” transition into paid employment, and is far away from a consistent picture on the employability of former entrepreneurs. Research on the pre-hire employability of former entrepreneurs is scattered, and it is not intuitively clear if former entrepreneurs are preferred job candidates in the eyes of future employers. Therefore, this dissertation addresses this void by zooming into employers’ subjective perceptions of former entrepreneurs’ employability. By that, this dissertation establishes a pre-hire and cognitive-based perspective grounded in categorization and attribution theories to contribute to the employability debate about former entrepreneurs. To achieve this, Chapter 1 describes the scientific relevance, the goals, and the intended contributions of this dissertation. Chapter 2 develops and tests a novel theory about the employability of former entrepreneurs by accounting for the heterogeneity in employers’ perceptions and the underlying mechanisms in two studies. Overall, employability perceptions are mediated by the positive and negative stereotypes and the inherent uncertainty employers possess about former entrepreneurs resulting in an overall negative perception of former entrepreneurs. Moreover, there is evidence that the entrepreneurship category has “neutral” employment implications if the job opening comes with personnel responsibility, if the entrepreneur has failure in the vita, or if employers are more similar to the entrepreneur. Chapter 3 addresses the stereotypes about former entrepreneurs more directly. Results from a priming experiment indicate that six negative stereotype factors (e.g., difficulties in following instructions) explain the negative employability perceptions and four stereotype factors that compensate for the general negative effect (e.g., good people management). Chapter 4 targets employers’ perceptions of former entrepreneurs’ failure attributions. The results from a metric conjoint experiment indicate that person-centered failure attributions (e.g., lack of skill or lack of effort) outweigh the distancing attributions in the employment interview, especially when the former entrepreneur is female. Chapter 5 has a methodological focus and illustrates the concerns with the current use of test-retest reliabilities in metric conjoint experiments (a recurring issue of the previous chapters). Two simulation studies indicate that the current reliability threshold of r = 0.70 is superficial as regression outcomes are relatively stable across several test-retest reliabilities. The last chapter summarizes the previous chapters and discusses the overall scientific contributions. Overall, this dissertation helps to understand the employment implications for former entrepreneurs by zooming into employers’ subjective evaluations of former entrepreneurs’ employability.
... As we have covered previously, there is strong evidence of gender differences in initiating negotiations favoring men over women (Babcock et al. 2006;Bowles et al. 2005;Gerhart 1990;Gerhart and Rynes 1991). One particular example is Small et al. (2007) study that found a statistically significant gender difference in initiating negotiations, such that men were more likely to ask for more money than women were in a laboratory experiment. ...
Full-text available
In the professional world, there remains an obvious gender wage gap, partly because men ask for raises more often and in greater increments than women (Babcock, Gelfand, Small, & Stayn, 2006). In the current study, we seek to extend the literature on individual differences and negotiation by testing theory regarding how dispositional traits—namely Big Five subfacet personalities—may contribute to salary negotiation initiation. In summary, we found that women are generally higher in politeness and compassion than men, but neither of these personality traits were related to the propensity to initiate a negotiation. Rather, assertiveness was positively related to initiating negotiations. We also found evidence supporting the hypothesis that women are less likely to initiate a negotiation, but that this gender difference only exists with male supervisors.
The pursuit of desirable outcomes is often hindered by the threat of failure. While extant research largely characterizes self-threatening outcomes as eliciting an avoidance motivation, the current work demonstrates a novel intervention that can shift people towards an approach motivation: ambivalence towards the outcome. Within professional and personal domains, we show in seven experiments that considering both the pros and cons, rather than just the pros, of a self-threatening outcome encourages people to pursue it. We find that this heightened approach motivation occurs because ambivalence reduces an outcome’s desirability, in turn reducing self-threat, serially mediating the relationship between ambivalence and likelihood of pursuing the outcome. Further, we show that people do not intuit this effect and are likely not taking advantage of it. We conclude by discussing the managerial and theoretical implications of ambivalence in the face of self-threat.
We examine sex differences in a market for high-level managers with simple and clear objectives, head coaches in the Women’s National Basketball Association (WNBA). We find equal proportions of males and females as first-time coaches, and limited evidence that males inherit slightly worse teams. Also, when hired, males are older and have more experience. Males have slightly higher winning percentages for the first few seasons of coaches’ tenures. Furthermore, we find no difference in survival; it is independent of sex and largely determined by performance. Thus, we find female coaches are not held to higher promotion or retention standards in the WNBA.
Intrinsic to the field of plastic surgery, constant changes in health care policy, consumer demands, and medical technology necessitate periodic evaluation of trends in employment over time. In this article, we review the existing literature to report the current state of plastic surgery employment in the United States with regards to compensation, practice patterns, subspecialty trends, contract negotiation, representation of women in the field of plastic surgery, burnout and job satisfaction, and retirement. Understanding how the plastic surgery job market is changing not only serves as a valuable tool for the individual plastic surgeon regarding the navigation of his or her own career but also offers insight into the future of the field as a whole.
Hypothesized a positive correlation between respondents' assertiveness and their preference for pay increases based on merit rather than on seniority. The Rathus Assertiveness Schedule and an attitude schedule concerning merit pay were administered to 46 female and 37 male undergraduate business students. A significant sex difference was found: More assertive men showed a preference for merit pay increases, while more assertive women preferred pay increases based on seniority. It is suggested that women do not believe that salary increases are awarded according to performance-based criteria. (11 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
do women and men differ in their sense of their own entitlement, in what they feel they deserve from their jobs or relationships / if so, under what circumstances and for what reasons present[s] a brief overview of this research / the most prevalent explanation proposes that men and women differ in what they value or want from their social or work relationships, hence their tendencies to allocate rewards differently and evaluate their jobs similarly / in contrast to this view, I will propose that women and men use different comparative referents when they evaluate their existing outcomes or when they estimate what they deserve or are entitled to receive / in addition I will consider the role of psychological justifications of victimization in producing and maintaining gender differences in perceived entitlement (PsycINFO Database Record (c) 2012 APA, all rights reserved)
A theory of social inequity, with special consideration given to wage inequities is presented. A special case of Festinger's cognitive dissonance, the theory specifies the conditions under which inequity will arise and the means by which it may be reduced or eliminated. Observational field studies supporting the theory and laboratory experiments designed to test certain aspects of it are described. (20 ref.) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
In this article the linkages between upward influence tactics and salary attainment were studied within the context of observed salary differences between men and women. The data for this field study were gathered from 212 male and 82 female business school graduates. Annual salary was regressed on a set of control variables and six dimensions of upward influence. Separate salary equations were estimated for men and women, and used to study sex-based salary differentials. The results indicated that even though there were few mean differences between men and women in terms of person-centered attributes, the characteristics of employing organizations, or the use of upward influence styles, women earned less than men. The set of upward influence tactics uniquely accounted for variation in salaries for both men and women, and there was evidence of gender specificity in the salarly allocation process. The usefulness of considering upward influence tactics when studying the salary allocation process is emphasized, particularly when the goal is to understand observed salary differences between men and women.