Salary negotiation perceptions by gender and their role on the gender pay gap

Abstract

The choice to abstain from salary negotiations can have a profound compounding effect on the earnings of an employee over the timespan of their career. If gender is a distinguishing characteristic separating those employees who choose to negotiate from those who choose not to, then salary negotiation becomes a contributing factor to the gender wage gap. This study investigated perceived gender differences across three constructs, namely (i) negotiation empowerment (ii) pay secrecy, and (iii) the social cost of negotiation within the financial services industry in South Africa. The study made use of a seven-point Likert scale instrument to document perceptions of the respondents. The survey was distributed electronically, making use of a snowball sampling methodology. Contrary to the majority of existing cross-industry literature, the findings show no gendered results across the three constructs. However, the research did find that females do not negotiate salary as often as males, and that both males and females prefer negotiating with male managers. A negotiation gender bias was also found amongst the respondents. The study furthers existing research by demonstrating industry specific studies may not conform to the findings of cross-industry studies. It also provides relevant findings for organisations looking to eliminate gendered structures around pay determination.