Growing trend: Companies banning salary negotiation

It’s been well documented that Reddit CEO Ellen Pao has banned the practice of salary negotiation. After losing her sex-discrimination trial in April, Pao told the Wall Street Journal:

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. 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.

Carol Pepper of Pepper International says the practice is ”a little disingenuous to say that women can’t learn how to negotiate.”

Now it seems some other startups are following Reddit’s lead. Jet.com, which hopes to take Amazon (AMZN) on in the online shopping space and online test preppers Magoosh have both adopted similar non-negotiable salary policies.

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Pepper thinks these changes are less about parity and transparency amongst employees and more about a company doing what is in its own best interest. “For companies, wouldn’t it be great if no one ever negotiated salaries,” Pepper asks.

Yahoo Finance’s Aaron Task says the trend is not a good one regardless of the reasoning.

“Negotiation is a skill that lasts throughout your whole life,” he notes, “and I think to say to anybody…’you shouldn’t negotiate because you’re not good at it’ is doing them a disservice in the long term.”

Task also notes that study after study suggests workers’ first salary sets the bar for their entire career. Banning negotiating of that first paycheck could have an impact on those employees’ careers for the rest of their working lives.

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