Satya Nadella on women's pay: A classic case of East-West misunderstanding

Microsoft CEO Satya Nadella got verbally hauled over the coals for what appeared to be a politically incorrect statement on pay raises for women.

Asked what advice he would give women who were uncomfortable asking for salary increases, he had this to say: “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. And that, I think, might be one of the additional superpowers that, quite frankly, women who don’t ask for raises have, because 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. That’s the kind of person that I want to really give more responsibility to.”

Nadella’s statement stands in the same league as Yahoo! CEO Marissa Mayer’s ban on employees working out of home last year – a move seen as gender-unfriendly since more women tend to work out of home for parenting reasons than men.

 Satya Nadella on womens pay: A classic case of East-West misunderstanding

Nadella’s statement serves as a good explanation for an east-west divide.

In today’s gender-obsessed world, where Facebook COO Sheryl Sandberg’s book urges women to “lean in” and not hold back while demanding equality, Nadella got a shellacking for this statement – and he backtracked by apologising. He would have been safer telling women a funny anecdote about how he too waffled about seeking a pay raise, or simply that there are no easy answers to it, but he tried to offer more and fell into the trap.

Let’s be clear. Unequal pay for similar work is rampant. And, in general, it is not a bad thing for women to stand up and ask for more if they think they deserve it. It is probably true that those who prefer to suffer in silence, will get less justice than those who don’t.

But, that said, I believe that Nadella’s statement serves as a good explanation for an east-west divide. The same statement will look different depending on whether you look at it from an eastern sensibility or a western one.

In most parts of Asia, asking for raises is not the norm even among men. In Japan, they almost never do so. Employers are expected to take care of their employees as part of their karma. In Korea and China, they have only now begun to ask for more. In India, few men ask for raises even today. Speaking anecdotally, I can’t remember asking for a raise even once in my career – at best I have mentioned what would be nice to have when changing jobs. In my own experience, I have seen more women asking for raises than men – but that’s also because in media there are more women than in other professions. They also tend to be more articulate than men.

But I mention this not to prove that women should not ask for raises, but that we do believe in a karmic sense of justice – of things evening out in the long run - more than the west.

Pointing out a famous verse from the Gita, which calls for Nishkama karma (doing your duty without seeking a reward), Narayani Ganesh, writing in The Times of India today (14 October), notes: “We assume an ideal situation where the cultural idiom and import of Nadella’s statement would not be misunderstood as being sexist, and where rights and responsibilities are balanced out. Unfortunately, we live in an unfair world and where cookie-cutter approaches tend to homogenise perspectives, leaving little scope for nuanced philosophy.”

But there is also another perspective from which we need to look at pay increases, whether for men or women. The advice to women to lean-in is actually relevant largely in a patriarchal world where men have devised the rules and where hierarchy dominates. Pay goes by position in the hierarchy and not necessarily contribution or the need for equity.

So we have outsized CEO pay and glaring pay differences between the top and bottom rungs of workplace structures, making pay raises almost arbitrary and illogical. According to the US Economic Policy Institute, “From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period.”

The study, by Lawrence Mishell and Alyssa Davis, makes it clear that “CEO compensation growth does not simply reflect the increased market value of highly paid professionals in a competitive market for skills but reflects the presence of substantial rents embedded in executive pay (meaning CEO pay does not reflect greater productivity of executives). Consequently, if CEOs earned less or were taxed more, there would be no adverse impact on output or employment.”

Now, what applies to CEOs can easily apply to all levels of pay anywhere. If we have no way of measuring even a CEO’s output, it is highly unlikely that we have a sensible way of measuring true contributions anywhere except daily-wage output. And corporate HR departments may be measuring loyalty and good citizenship more than competence while deciding pay hikes.

In this context, while asking for more may help correct some imbalances, they are not the solution.

In a more gender-balanced world, pay skew would be far lower not only between the sexes, but even within the same gender. If we accept the basic premise that women build networks of communication while men build rigid hierarchies, pay structures will (or should) follow a different logic from what they do now.

More communication about what is useful work and what is not will automatically make it easier for both men and women to understand what is expected of them, what they must do, and what they can receive as pay. In a male-ordered structure of compensation, not much is currently offered by way of explanation as to why someone gets more or someone less. You would not need to ask for more if you knew the whole thing was decided by clearer communication on how performance is measured, and what pay would result from that performance.

This is what I would expect in a more gender-balanced world.

#1: Pay structures will be less rigid, and there will be more flexible pay based on clearly understood parameters of output and performance. This may mean more of your pay depends on what you do rather than what place you occupy in the hierarchy, and whether your boss likes you.

#2: Pay multiples between the top and bottom will come down dramatically, and individuals will be more in control of what they earn. Merit will be balanced by a sense of individual needs – depending on one’s personal and career stage.

#3: Designations will be fewer, and more related to the work you do. There will be few needs for title inflation. There will be no need for big titles with low-value jobs. A great writer in a media newsroom may never get to be editor or obtain a free club membership, but her internal status and pay will reflect her merit and expertise. She may earn more than the editor.

This vision may not play out any time soon, but this is the kind of twist I would give to Nadella’s karmic sense of justice.

A change from a male-ordered workplace should not mean adoption of all the bad practices that men did in their rise to the top.

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Updated Date: Oct 14, 2014 14:11:18 IST