Content provided in partnership with
Business Services Industry
Friends in High Places: The Effects of Social Networks on Discrimination in Salary Negotiations
Administrative Science Quarterly, June, 2000 by Marc-David L. Seidel, Jeffrey T. Polzer, Katherine J. Stewart
This article tests hypotheses about the effects of social networks on inequitable salary negotiation outcomes using a U.S. high-technology company's salary negotiation data for 1985-1995. Analyzing results of 3,062 actual salary negotiations, we found that members of racial minority groups negotiated significantly lower salary increases than majority members, but this effect was dramatically reduced when we controlled for social ties to the organization. Having a social tie to the organization significantly increased salary negotiation outcomes, and minorities were less likely than majority members to have such a social tie. [*]
- Most Popular Articles in Business
- Research and Markets : Tesco Plc - SWOT Framework Analysis
- Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors
- eBay made easy: ready to start an eBay business? These 5 simple steps will ...
- Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...
- Wal-Mart's newest distribution center opened last month near the southwest ...
- More »
Discriminatory wage differences between White and minority employees have been documented in many organizations (England, 1992). Although there are many potential sources of within-job wage discrimination, the exact processes through which discriminatory wage differentials occur are not well understood. According to Petersen, Saporta, and Seidel (2000), wage gaps between demographic groups may have several causes. First, demographic majorities and minorities are allocated to occupations and organizations that differ in compensation. This allocative discrimination occurs through the hiring, promotion, and termination processes. Second, demographic minorities may have equal access to positions, but different preferences for work settings, resulting in valuative discrimination. Third, demographic minorities may receive lower wages for a given job within a given organization. Distinct from allocative and valuative discrimination, this within-job wage discrimination is defined as unequal pay for the same work perf ormed within the same job. Within-job wage discrimination is the focus of this paper.
There are several potential sources of within-job wage discrimination. One obvious cause is overt racism (Allport, 1954; Dovidio and Gaertner, 1986). Racist individuals were found to vote against a Black mayoral candidate (McConahay and Hough, 1976; Kinder and Sears, 1981), oppose busing for school desegregation (McConahay, 1982), and prefer to hire Whites over Blacks (Mcconahay, 1983). Individuals who are biased against a minority group may rate the performance of a member of the group lower than his or her actual performance, an act of direct interpersonal discrimination (Kraiger and Ford, 1985; Ilgen and Youtz, 1986; Greenhaus, Parasuraman, and Wormley, 1990). Further, actual performance may differ among demographic groups. One mechanism that may cause lower performance by stereotyped minorities is stereotype vulnerability (Steele, 1997). Steele (1997) found that African American students who started school with standardized test scores comparable to their White counterparts quickly realized a gap in perfo rmance. He suggested that the performance difference stems from stereotype-based obstacles to achievement. As minorities face the possibility of conforming to a stereotype, or of being judged in terms of it, it becomes a threat to their expectancy. The lowered expectancy leads to a lower level of performance.
Putting aside actual performance differences, wage inequities may begin before job candidates even accept a job. collinson, Knights, and collinson (1990) found extensive sex discrimination in the hiring processes of 45 large private organizations in England in the early 1980s, despite organizations' attempts to eliminate it. Dependence on informal, word-of-mouth recruitment channels pervaded their recruitment practices and was an important conduit through which sex discrimination operated. Informal means of recruitment allowed the employer to gather more information on the candidate than might be available through other means and to assess his or her acceptability. Such assessments were made very early in the recruitment process (sometimes even before the employer met the candidate), and the recruitment process then focused on selectively confirming the original preconception. These authors concluded that the use of informal channels such as employee referrals of friends or relatives facilitated the reproduct ion of job segregation. The logic underlying Collinson, Knights, and Collinson's findings may also contribute to understanding racial discrimination in the hiring process. More specifically, differing networks can lead to systematic salary differences among racial groups through their effect on salary negotiation outcomes. If social networks impart some advantage in salary negotiations, and if racial groups have systematically different social networks, negotiation outcomes should differ for the various groups.
DISCRIMINATION IN NEGOTIATION
Negotiation researchers study various factors that affect how interdependent individuals with different preferences allocate resources in a joint decision-making process (Walton and McKersie, 1965; Raiffa, 1982; Lewicki and Litterer, 1985). Such factors include cognitive biases (Neale and Bazerman, 1991), power differentials (Pinkley, Neale, and Bennett, 1994), and motivational orientation (Pruitt and Rubin, 1986; for an overview of negotiations research see Thompson, 1990; Neale and Northcraft, 1991). This research typically takes a social psychological or decision analytic perspective, with the behaviors and decisions of the negotiating parties as the principal unit of analysis (Rubin and Brown, 1975). Consistent with this perspective, most of this research has been conducted in laboratory settings. Such experimental studies are designed to hold constant all features of the social context except the variables being studied in order to isolate the causal effects of these variables (Cook and Campbell, 1979). While a wealth of knowledge has been generated from this approach, some features of the social context within which negotiations are embedded are difficult to study experimentally (Greenhalgh, 1987; Kramer and Messick, 1995). In particular, neither the effects of negotiators' social networks nor discrimination against demographic minorities have received adequate attention from negotiation researchers, with the exception of Ayres' (1991, 1995) work on discrimination.
Find Research Guides for:
Find Featured Titles for: Home & Garden
Most Popular Articles in Business
- Research and Markets : Tesco Plc - SWOT Framework Analysis
- Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors
- eBay made easy: ready to start an eBay business? These 5 simple steps will ...
- Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...
- Wal-Mart's newest distribution center opened last month near the southwest ...
- More »