Nadella Apologizes For Gender Pay Gaffe - InformationWeek

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Nadella Apologizes For Gender Pay Gaffe

Microsoft CEO Satya Nadella draws quick criticism for his response to a question about pay gaps between male and female employees.

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Since making his public debut as Microsoft CEO last March, Satya Nadella has generally been praised as a thoughtful public speaker. Nadella drew criticism this week, however, when he suggested women should refrain from asking for raises and instead trust that "the system" will reward their hard work. Nadella subsequently apologized for the remarks, calling them "inarticulate" and "completely wrong."

Somewhat ironically, Nadella made the comment at the Grace Hopper Celebration of Women in Computing conference in Phoenix, where he participated in a keynote Q&A with Maria Klawe, president of Harvey Mudd College and a member of Microsoft's board of directors. For much of the talk, Nadella appeared to have a comfortable rapport with the audience, which heard him celebrate the rise of women CEOs in India and praise the unique perspective women bring to traditionally male fields. His remark on pay came during the talk's final 10 minutes.

"It's not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along," Nadella answered when Klawe brought up the hot-button issue of women being less likely than men to ask for raises. "That's good karma. It'll come back because somebody's going to know that's the kind of person that I want to trust."

[Don't talk yourself out of challenges. Read 'Why Not?': Power Phrase For Women In Tech.]

"I'm not saying that's the only approach," he continued. He said that Mike Maples, the executive under whom Nadella worked when he joined Microsoft, characterized all HR departments as inefficient in the short term but efficient in the long term. This philosophy suggests people might overcome temporary dissatisfaction with pay by focusing on long-term prospects, Nadella said.

Drawing applause from the audience, Klawe responded that pay raises are one of the few issues where she and Nadella disagree. "Make sure you know what a reasonable salary is when you're offered a job. Don't be as stupid as I was," she said after stating that she'd negotiated her salary poorly in the past.

Nadella's response sparked ire on social media. Many pointed out that the "karmic" system Nadella advocated hasn't worked out in practice. According to an oft-cited study by the American Association of University Women (AAUW), women earn only 78% of what equally qualified men are paid. Another recent study concluded women request an average of $7,000 less than men when negotiating salaries.

"It is shameful that Microsoft CEO Satya Nadella would tell women -- especially in an industry that already has a serious problem recruiting and retaining female talent -- not to ask for raises. Wage discrimination costs women and their families close to half a million dollars over their lifetime," said Nita Chaudhary, co-founder of women's activist group UltraViolet, in an emailed statement.

Nadella quickly took to Twitter, where he said he'd been "inarticulate" and that the tech industry "must close the pay gap." He followed up with a letter to employees, posted to Microsoft's website, in which he said his comments were "completely wrong" and that he fully supports efforts to bring more women into technology and close the pay gap. "I believe men and women should get equal pay for equal work," he wrote. "And when it comes to career advice on getting a raise when you think it's deserved, Maria's advice was the right advice. If you think you deserve a raise, you should just ask."

Despite his gaffe, Nadella encouraged employees to watch a video of the event.

Although women continue to earn less than their male peers, evidence suggests tech companies offer more equitable salaries than companies in many other industries. The aforementioned AAUW study notes that engineering and computer science jobs were among the few with relative pay equity. But "relative" equity can still be a slippery concept. A recent study by a Harvard economist found that female computer scientists earn only 89% as much as their male counterparts. Women fared much worse in other industries with high-earning jobs, such as finance and medicine. A recent survey by the website Dice.com similarly found that tech jobs tend to offer equitable pay compared to other industries, but that men still earn on average almost 10% more than women.

Compounding the pay issue, women are still vastly outnumbered by men at most large tech companies. Nadella addressed this point during his Q&A with Klawe, stating that Microsoft has "to figure out how to get women into the organization and... into our development."

It's unknown how well Microsoft's female employees are paid relative to their male peers, or to their counterparts at other tech companies. But in terms of gender representation in the workforce, Microsoft has increased its number of female employees over the last few years and now roughly matches other large players in its industry. According to its most recent disclosure on employee diversity, 29% of Microsoft employees are female, with 17% in technical roles.

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Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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mpochan156
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mpochan156,
User Rank: Author
10/20/2014 | 9:59:13 AM
the Gender pay gaffe was no gaffe; it is Nadella's upbringing in the Indian culture
Satya Nadella's Gender pay gaffe was no gaffe; it is Nadella's upbringing in the Indian culture and then adding to it here in the U.S. Should he be embarassed by his culture ? Should he change ?  Can he change ? And what role do the women play ?

Huh ?!?!  What do you mean, Ike,  'what role do the women play ' in Gender pay differences ? 

Yep. The women who earn less may help contribute to the Gender pay gap. I am reading the enlightening book "Women Don't Ask" by Prof. Linda Babcock and Sara Laschever. In it, they describe he research done on how women have been culturally conditioned for many years to 'not ask' and just accept what comes their way. They put forth how women can change their mindset and ask, negotiate ( men need to shed their chauvinistic ways too ! ). 

There is a lot more to it, but that is the essence. I suggest all HR Departments read and educate everyone on "Women Don't Ask". 

 

Ike

an Entrepreneur-In-Residence

 
Thomas Claburn
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Thomas Claburn,
User Rank: Author
10/14/2014 | 3:27:51 PM
Re: Talk about mixed messages
>What Nadella was trying to say was that if you are good at what you do, the company will figure that and compensate you so you stay.

Even that charitable interpretation of Nadella's remarks assumes too much competence on the part of companies, which often don't know the talent they have and thus aren't likely to recognize it until the person has left for greener pastures.
Michael Endler
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Michael Endler,
User Rank: Author
10/11/2014 | 6:34:46 PM
Re: Talk about mixed messages
@tjgkg,

Sorry to have offended, or if the comment came across as more flippant than intended. Personally, I don't find the reference completely unrelated-- both health policy and compensation policy speak to socio-political structures with systemic bias against and significant influence over certain groups, including women. But you're of course welcome to disagree with that interpretation. I also meant the reference more as an abstract extension of the dangers of "trust the system" thinking, rather than as a particular commentary on Nadella, who's hardly the only person to suggest such a philosophy (as I was trying to allude, politicians similarly tell people who get hurt by systems to continue trusting those systems). All that said, I hear your concern that references to such social policy don't directly involve Nadella, nor help us to understand what he meant. You might have noticed in my other, lengthier comment that I cautioned against overreacting, or allowing only a few seconds of commentary to define a CEO who has otherwise espoused a progressive point of view. So even if I veered too far afield in one comment, it seems like we both agree that a thoughtful, rather than reactionary, response is most appropriate.
Charlie Babcock
IW Pick
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Charlie Babcock,
User Rank: Author
10/10/2014 | 5:48:32 PM
Nadella knows how entrenched Microsoft culture can be
Nadella had to confront a recalcitrant organization and move Microsoft development into a more continuous delivery mode, as opposed to big product releases every 2 or 3 years. It was a gargantuan task. He knows better than anyone how immovable his organization can be. Probably because of that, he realized the gravity of his mistake quickly. (Or maybe he got a phone call from his wife.)
Michael Endler
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Michael Endler,
User Rank: Author
10/10/2014 | 5:38:29 PM
Re: Resign
Agreed, all of those things are important-- but they're also much harder to quanitfy and objectively define. I suppose they could do something like an surveying employees about gender-related workplace issues, and making those results public.
Michael Endler
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Michael Endler,
User Rank: Author
10/10/2014 | 4:16:10 PM
Re: Resign
Drew,


I had the same thought.

For reasons of competitive secrecy, Microsoft will never report detailed salary data. But it could start to share information about salary variation for the same roles across genders--e.g. An entry level female engineers earns X% of what an entry level male engineer makes.

If Microsoft were to publish such data with a transparent methodology, it would go a long way. And if Microsoft shows that women are not only becoming getting more jobs at Microsoft but also more equitable pay, then I think Nadella will have shown his true stripes as a leader. Likewise, if pay were revealed to be out of whack and if it stayed that way, Nadella's apology would be exposed as a PR move. This sort of disclosure seems reasonable to me. Maybe Microsoft could be the first of its peers to break the ice.
Michael Endler
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Michael Endler,
User Rank: Author
10/10/2014 | 4:10:28 PM
Re: Talk about mixed messages
@Drew,


That was my thought. The only people who ever tell you to have faith in systems are the people who happen to benefit from those systems. Sort of like when a room full of old white men sits in a room and decides how women's health policies should work.

Like I said in my other comment, I think Nadella deserves a chance to show that his apology is sincere. But the casualness with which he brought up such a backward viewpoint also shows why it was important for a negative public response to emerge.
Michael Endler
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Michael Endler,
User Rank: Author
10/10/2014 | 4:03:01 PM
Re: Resign
@mbobby,


I think that's a bit excessive.


What he said was stupid, but as things that damage the image of U.S. companies go, Nadella's comments are the most recent example-- not the most offensive or concerning.

I share your thought that more people should think about the ideals they tacitly support when they purchase certain products, but...


Nadella said something stupid. We can only guess at how his ill-chosen words actually align with his intent as a chief executive. We live in a culture with a lot of systemic biases, as well as a strange indifference to the way language normalizes these prejudiced structures. For that reason, I think it's positive that Nadella's been taken to task for perpetuating such a bad point of view. But you seem to expect him to simply fall on his sword, as though there is no way he could possibly atone for 45 seconds of poorly-chosen words. If additional evidence of pay bias against women under his tenure as CEO comes to light, then things might be different. But so far as we can tell, for the period he's been CEO, Microsoft has increased the percentage of its workforce that it made up by women, and also increased the percentage of leadership roles occupied by women. The company's ratios are still disappointingly skewed toward men, but the point remains-- the company has become more diverse since Nadella's been in charge. We don't know anything about pay equity, and we can't be sure how much direct influence Nadella's had over the change in workforce demographics. But that's sort of my point-- there's a lot we don't know, and what we do know certainly doesn't necessitate that he resign. It demands that he apologize, and that he pursue policies that show he's taking the issue seriously and thoughtfully. I'm not defending the point of view he expressed, and I think his statement deserved to be addressed-- but perspective is important. It's emotionally satisfying to crucify a token scapegoat during a moment of communal outrage-- but doing so rarely addresses the real problem.

As for Microsoft's bottom line, I don't see how it would benefit from Nadella resigning, barring the emergence of a truly significant scandal. As CEO, he's re-energized the company's stock, moved it in new directions in which it can remain a dominant player, enacted a more open dynamic, and generally erased a lot of the ill will that followed the company during the last two years of the Ballmer era. Does Nadella need to show that his apology is sincere? Yes. But is this something for which he should resign? No.
Laurianne
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Laurianne,
User Rank: Author
10/10/2014 | 3:50:49 PM
Salary negotiation backlash is real for women
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
10/10/2014 | 3:45:07 PM
Re: Talk about mixed messages
Yep, "trust the system" is just blind faith for most of us.
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