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Is There a Backlash Against Women in Negotiations?

Tuck professor Jennifer Dannals finds that women entering a negotiation with a strong alternative underperform men in similar situations because they often face backlash.

For many workers today, the gender inequalities in the economy are sadly familiar. According to Census Bureau data from 2018, women earned an average of 82 cents for every dollar earned by men. That gap becomes even more stark on the corporate ladder. Women make up 47 percent of the U.S. labor force, yet only 21 percent of executive positions are held by women, and only 4.8 percent of Fortune 500 companies, as of 2018, had a female CEO.

Academics and practitioners often point to gender differences in negotiation performance to explain these gaps. Research has generally found that women on average underperform male counterparts in most negotiations, which places women at a disadvantage when seeking a raise or an important promotion.

Why do women typically achieve worse negotiation outcomes than men? Two main theories in the academic literature attempt to explain this gap. One school of thought suggests that women are socialized to generally behave less assertively than men.  They thus initiate negotiations less often and then extract less value on average when they do engage.  Alternatively, another theory suggests that many women do assert themselves in negotiations but, because this behavior is generally viewed as counter-normative, it causes some counterparts to retrench instead of capitulate.

Tuck professor Jennifer Dannals compares and tests these two theories in a paper published recently in the Journal of Applied Psychology. In “The Dynamics of Gender and Alternatives in Negotiation,” Dannals and co-authors Julian Zlatev of Harvard and Nir Halevy and Margaret Neale of Stanford study what happens in negotiations when one party has a strong outside option. In negotiations-speak, an “outside option” is an advantageous alternative that gives the negotiator the power to seek better terms in the negotiation. This power manifests in the knowledge that, say, a woman seeking a raise can walk away from the negotiating table and get a better-paying job somewhere else.  If women were insufficiently assertive, a strong alternative should help boost this behavior and remedy the gap. If, instead, women were already behaving assertively and were facing backlash for doing so, a strong alternative would be more likely to exacerbate the problem and widen the gender gap.

If you’re going to negotiate a job offer, a good outside option helps you show your worth and feel confident. But it seems to help men more than it helps women.

Conducting a robust empirical analysis of real-world negotiations is challenging because they are usually held in private and their circumstances are hard to standardize. To address this, Dannals assembled a unique trove of data taken from more than five years of negotiation training sessions that Halevy and Neale taught at Stanford. All told, this yielded 2,552 MBA students, undergraduates, and executives from five continents who had participated in pairs in a mock job offer negotiation exercise.  All pairs “negotiated the details of a job offer according to a designated payoff structure,” the authors write. “Candidates or Recruiters gained or lost points for deals across eight different issues including salary, starting bonus, job location, job assignment, health insurance, vacation days, starting date, and moving expenses.” They randomly assigned all the Candidates and Recruiters to possess a strong alternative, which was represented by the number of points they would receive if they chose to not make a deal. If they had a strong outside option, it was worth 4,500 points. If their outside option was weak, it was worth 2,200 points. Participants never knew the value of their partner’s alternative.

Jennifer Dannals

Named to Poets&Quants 40-Under-40 list of outstanding young business faculty, Jennifer Dannals teaches organizational behavior at Tuck.

The authors suspected, based on prior literature, that they would see a gender gap in the negotiation outcomes. They were surprised to find that, on average, there was no significant difference between the points women and men earned in final deals. But when they compared the data among the participants with strong alternatives, they found that men were able to use their strong outside option as leverage to gain an extra 964 points, while women with strong alternatives were only able to add 530 points.

“In general, it’s usually very good to have strong alternatives,” Dannals says. “If you’re going to negotiate a job offer, a good outside option helps you show your worth and feel confident. But it seems to help men more than it helps women. Within that comparison, women are underperforming relative to their similarly empowered male counterparts.”

Having uncovered that difference, the authors go on to probe its likely cause. If women weren’t behaving as assertively, perhaps they set less ambitious targets or thresholds for an acceptable deal. Or maybe they make less ambitious first offers, which sets them up to gain less than men in the end. But Dannals found no differences on either measure. Instead, she and her co-authors found a difference in the rate at which men and women reached an impasse. In dyads containing women with strong alternatives, the rate of impasse was higher than in dyads where men had strong alternatives.

In these cases, women are losing out on the value they could have gained in that interaction. We think reaching an impasse is suggestive evidence of a backlash.

“Reaching an impasse in these exercises—and often in real life—is a sub-optimal outcome,” Dannals says. “It means both people didn’t get as much as they could have out of the interaction. So in these cases, women are losing out on the value they could have gained in that interaction. We think reaching an impasse is suggestive evidence of a backlash.”

As the authors explain, “aiming high is perceived differently when enacted by empowered women than by empowered men. This suggests that, when the gender gap does persist, it may be less due to women behaving in stereotype-congruent ways, and more to the negative effects of women behaving in stereotype-incongruent ways which, in turn, prompts a backlash from their negotiation counterparts, thereby leading to more frequent impasses.”

For Dannals, this research has two important takeaways. First, gender backlash is likely to hinder women more and more as they climb the corporate ladder. This is because organizations may react more strongly against women who break stereotypes by being assertive and seeking high-ranking positions. Second, it looks like women are “leaning-in” plenty; it’s up to managers to enact guidelines and processes that minimize the chances of backlash.