Google’s Laszlo Bock to hiring managers: There are fairer ways to determine compensation. By Jessica Stillman Contributor, Inc.com @EntryLevelRebel
Back on April 12th, a.k.a. Equal Pay Day, my Inc.com colleague Christine Lagorio-Chafkin pointed out that, despite the “festive” occasion and the four decades that have passed since the Equal Pay Act, women are still making only 79 cents for every dollar a man makes.
Why is that? Theories abound, from women’s tendency not to aggressively negotiate their salaries (sadly, research shows this is probably because they are punished for doing so) to straight-up sexism. But Google’s HR boss Laszlo Bock thinks at least one other factor might contribute to the problem–how many companies determine salaries for new hires.
Ask this and you’re just perpetuating unfairness.
In a Washington Post op-ed that later appeared on the company’s excellent re:Work blog (which is where I came across it), Bock argues that the standard “What’s your current salary?” question that hiring managers often put to candidates is not only a poor way to determine pay, it’s also a significant part of the problem when it comes to the stubborn persistence of the pay gap.
Why is this a lousy question to ask? Because it plays into a quirk of the human brain known as the anchoring bias, Bock explains. According to a heap of research, humans tend to become fixated on the first number they hear, even if that number is inappropriate for the situation. In short, we just can’t get the first suggestion we hear out of our heads.
And current salary is a particularly inappropriate number to use when starting a salary negotiation, Bock insists. Not only is it simply a suboptimal way to decide what constitutes a fair salary, but, when it comes to female candidates, it’s also likely to reflect past discrimination.
Here’s what you should you do instead.
Instead of leaning on the creaky old current-salary crutch, Bock suggests other companies follow Google’s lead and set predetermined target salaries instead.
“At Google, recruiters typically ask about salary as a data point, but neither they nor hiring managers make decisions about pay,” Bock explains. “Instead, offers are determined by our ‘people operations’ team, which provides a bulwark of objectivity and fairness … We calculate pay targets based on industry surveys, but you can simply use the average of what your current people make, or find decent estimates online.”
What happens when a candidate of either gender has a current salary well below that target salary? Well then, they get a sweet raise. “The further someone’s current salary is from the target, the bigger the raise she or he gets when they are hired,” writes Bock.
That’s not only fair, it’s also an easy way to do your small part to fight unfairness. “By paying for the role, not the person, you start with a clean slate and mitigate any bias embedded within … prior compensation. In other words, you correct the pay bias that exists in society,” writes Bock. Who doesn’t like an easy suggestion that’s both good business and good for society?
Do you ask candidates about current salary? Should you stop?