This article was updated on August 15, 2018.
When actress Jennifer Lawrence found out her male co-stars were earning more than her, she famously called out Hollywood for its lack of pay equity for actresses. Many discounted her points because she was still very highly paid, despite the fact that she was headlining hugely successful movies while getting paid less than her male co-stars.
But somewhat surprisingly, Lawrence didn't respond with anger and blame directed toward Hollywood. Instead, she ultimately blamed herself for not effectively negotiating. So how does Lawrence's situation and her reaction to it serve to educate HR Leaders about addressing pay equity?
The Problem With Female Salary Negotiation
In an open letter published on Lenny, she wrote, "If I'm honest with myself, I would be lying if I didn't say there was an element of wanting to be liked that influenced my decision to close the deal without a real fight. I didn't want to seem 'difficult' or 'spoiled.'" Lawrence goes on to mention how age and personality probably played a role as well, but based on statistics, she knows she's not the only woman with this issue.
And she's right. According to the Program on Negotiation (PON) Harvard Law School blog, men and women approach salary negotiation differently. "In the United States, gender discrimination is typically implicit rather than explicit," notes the blog. "Yet its persistence in the workplace presents a personal negotiation challenge that asks women to reconcile their needs with how they present those needs to their counterparts."
Managing Equality at Both Ends of the Pay Spectrum
Lawrence's fight can apply to HR leaders who manage inequality at both ends of the pay spectrum, but it has even more specific relevance for salaries at the high end. Figuring out a fair salary for an actor in a movie can be difficult, much like predicting success. We know that Lawrence can bring in a crowd, but she didn't give herself enough credit for that power when negotiating her original contract and the studio took advantage and offered her less.
This same type of situation can also apply to your senior level executives. Your head of marketing is an important position, but there isn't always a guideline for pay at that level or a clear benchmark for previous success. So when looking at senior positions, how do you ensure that the salary you're offering is fair, regardless of gender?
4 Ways to Advance Pay Equity
1. Have a Target Range
Have a number range ready from the start by knowing both what the previous employee made in the same position and researching comparable salaries in the industry. It will vary based on specific skills and experience, but shouldn't vary too much. That way, if you know you're looking at paying $150,000 and your top candidate says they're looking in the $115-120,000 range, you can respond with an offer for $145,000 and not take the bargain.
2. Don't Be Afraid of Big Raises
A lot of businesses have policies that restrict raises to no more than 10 percent of a salary. That sounds nice for planning budgets, but for a high-level employee that is likely not sufficient. If you hire someone with less experience and they turn out to be fabulous and overperform, raise their salary to the correct level. People reports that while Lawrence was paid only $500,000 for the first "Hunger Games" movie, she went on to earn $10 million in the sequel. The studio — and Lawrence — realized they had found a star.
3. Listen to Employees
When someone from your senior staff comes to you — whether male or female — and asks for a raise, listen intentionally. According to PON, women, more often than men, have to legitimize their requests during a negotiation. Consider if their current salary is the right level for their performance. If their current position doesn't justify a raise, what would?
4. Pay Attention to the Market
HR leaders should keep their eyes on market rates. Not only is this good for keeping pay equity solid, it's good for keeping the best employees happy in your organization. If your salaries ever drop below market rates, your best people could jump ship.
While it can be tempting to dismiss Lawrence as a special case, especially if you're not handling $10 million raises, the problems she faced in salary negotiation can translate directly into your senior staff's salary negotiations and your efforts to equalize pay in your firm — albeit with just a few less zeroes.
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