BUSINESS

Reddit Hopes Ending Salary Negotiations Will Help Women

04/06/2015 04:43 pm ET | Updated Apr 06, 2015
Justin Sullivan via Getty Images

Ellen Pao is still fighting.

Just weeks after losing a courtroom battle that highlighted tech's glaring gender problems, Pao is trying to solve some of them closer to home: at Reddit, where she is interim CEO.

In an effort to promote gender diversity, Reddit is no longer negotiating salaries with potential hires, Pao told The Wall Street Journal. It was her first interview since losing a gender-discrimination lawsuit against the venture-capital firm Kleiner Perkins Caufield & Byers last month.

“Men negotiate harder than women do, and sometimes women get penalized when they do negotiate. So as part of our recruiting process we don’t negotiate with candidates,” Pao told the WSJ. “We come up with an offer that we think is fair. If you want more equity, we’ll let you swap a little bit of your cash salary for equity, but we aren’t going to reward people who are better negotiators with more compensation."

More broadly, Reddit is trying to build a team that values diversity, and it's working with diversity expert Freada Kapor Klein to find other ways to create an inclusive environment, Pao told the WSJ.

"We ask people what they think about diversity, and we did weed people out because of that,” she said.

Numerous studies suggest a disparity between men and women who haggle with employers about pay. Not only are men typically more likely to negotiate salaries than women, women are also penalized more than men when they do negotiate.

And when the conversation does turn to money, women are more likely to be judged for their social skills than for their competence, an issue that men rarely face.

Still, it remains to be seen how Pao’s mandate will work in practice.

“If you’ve got a talented female who has another offer from a competitor, are you really going to expect that they’ll take a big salary hit to come to your firm?” asked Malia Mason, a professor at Columbia Business School.

Pao sued Kleiner in 2012, alleging that it discriminated against her because of her gender and later retaliated by firing her. A jury voted in Kleiner's favor on March 27, after a four-week trial, which delved deeply into Pao’s personal life and ultimately focused on her performance at work.

But the lawsuit against Kleiner, which was an early investor in Amazon and Google, renewed scrutiny on the overwhelming gender disparity in tech. Few women hold leadership roles at tech companies, and reports of sexual harassment and misogynistic behavior have plagued Silicon Valley for years.

Pao said she got messages of support from other women throughout the trial. One group of women in the tech industry, led by Lori Hobson, took out a full-page ad in the Palo Alto Daily Post that read, “Thanks Ellen.”

“If I have helped to level the playing field for women and minorities in venture capital, then the battle was worth it,” Pao said after the trial.

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