Preventing Racial Bias in Negotiations
Written by WIN Staff
“The Overdue Awakening” is what Time Magazine has titled their cover spread in their latest issue and rightly so: racial justice is making major headlines these days. Although discrimination and bias are not new things, it seems there is a hopeful promise that we as a country are finally waking up. In order to address systemic and deeply embedded racial discrimination however, we need to gain awareness towards its byproducts of implicit and explicit bias. This effect trickles down from the price paid for a new car to how we are perceived during a salary negotiation. It is a known fact that the gender pay gap for women of color is even worse than the average gender pay gap at 63 cents on the dollar according to the US Census Bureau.
Psychologically, a subtle prejudice phenomenon persists as a set of often unconscious beliefs and associations that affect the attitudes and behaviors of individuals. This has to do with the disconnect between the societal rejection of racist behaviors and the societal persistence of racist attitudes. Although people’s intentions may be good, racial bias persists.
Racial pay gaps exist due to factors such as social network differences, salary expectations, and risk aversion due to different perceptions of economic insecurity. But the context of the job negotiation itself is partly responsible for the salary gap.
Often, prescriptive advice is offered for combating gender and race discrimination. Women in general are expected to value the relational aspects of employment over more instrumental exchanges. Through racial socialization, Blacks are told from childhood that life is unfair and might prepare for a negotiation more for the bias they might encounter by asking for less and being sensitive to being perceived as overly aggressive. Black women are expected to be acutely aware of their tone and voice as to not be perceived as the stereotypical ‘Angry Black Woman.’ These differences can play a key role in producing pay inequality.
Distinctive race-related psychological features that influence people’s expectations, and a majority of the time, companies lack understanding and insights to the salary negotiation process and how these biases and behaviors of the people responsible for hiring job seekers pose a problem.
Companies need to address the less-recognized causes of racial pay inequality in the workplace and it all starts with the hiring process. Understanding subtle, unconscious, and automatic bias is one of the primary ways we can work towards being better allies and adopting improved anti-racist practices.
Perceptions and Influence of Race in Negotiations
Research led by Dr. Morela Hernandez found that if an employer or job evaluator has a particularly strong racial bias, they might view Black job seekers as less likely to negotiate because they see Blacks as less deserving of higher salaries compared to Whites. Additionally, Black American job candidates are more likely to receive lower starting salaries when evaluators believe they have been too aggressive in hiring negotiations.
In the first experiment, participants, playing the role of hiring managers, were randomly assigned to view one of two online resumes. One with a photo of a Black male and the other with a White male. After viewing the resume, the participants were asked to estimate the likelihood of the applicant to negotiate their salaries. The research showed that the more racially biased a participant was, the more likely they would expect the Black applicant to negotiate less. Hernandez and her colleagues suggest this result may be due to negative racial stereotypes, where Black job seekers are seen as less qualified or motivated.
In a subsequent study, participants were paired up and assigned to be either a job candidate or hiring evaluator and given 15 minutes for a face-to-face negotiation over an $82,000 - $90,000 salary. Race had no impact on how hard the job candidates negotiated but the evaluators who had been judged to be more racially biased consistently overestimated the number of offers made by the Black candidates than their White counterparts.
As a result, each time a Black candidate was perceived to have made another offer or counter offer, he or she received, on average, $300 less in starting salary. Dr. Hernandez believes these findings could help explain the wage gap faced by African Americans today. Stereotypes faced by Black men and women can have serious repercussions on who chooses to negotiate their starting salaries.
These findings translated to the real world mean that although Black job seekers negotiate at the same rate as others in similar roles, how they are perceived by others during negotiations only works to their disadvantage. This misalignment affects their financial outcomes and contributes to the persistent economic divide between employees of different races.
Confronting Negotiation Bias
How can companies combat implicit bias in these interactions? There is no one simple solution. In fact, a multifaceted strategy is most effective.
Awareness: Companies should focus on training and informal discussions with managers to raise awareness for potential barriers to fair negotiations. Investments in diversity training need to be made not just once, but on an ongoing basis.
Increase Transparency: Hiring Managers and Supervisors should compare negotiated salary incomes for candidates across similar job roles and titles before finalizing new employee pay. Transparency increases awareness to where there might be racial or gender pay gaps. Furthermore, asking candidates how much they earned in the past can disadvantage minorities and women who typically earn less than White men (in fact, it’s illegal to ask this in many states).
Establish Objective Criteria: Design organizational systems and metrics to make salary negotiations and interviews more just. Require structured interviews that require the same list of predetermined questions for each candidate. Ask these questions in the same order, scoring them during the interview, and then carefully weighing the answers on a scoring system. This robust structure gives a better idea of the candidate’s overall competency.
Provide Opportunity for Open Communication: Have a structure in place to encourage open communication and provide checks and balances. Keeping an open mind and combing out biased decision-making empowers individuals to act on their uniqueness rather than suppress it.
Hiring managers must understand that they might bring societal biases they don’t even recognize into negotiations with job candidates. Because biases spring from faulty intuition, reducing the role of snap judgments in the decision-making process is an important first step toward promoting more equitable job negotiations.
Legislative measures can only go so far in modern American society. It is up to individuals to examine our own actions and decipher which of our own decisions may reflect societal bias.
By addressing the less-recognized causes of gender and racial pay inequality in the workplace, companies can attract a more diverse and healthy workforce. Let’s do our part to close the gap (both gender and racial) one hire at a time.