Ethics of Recruitment and Negotiation

Puneet Arora
Management Development Institute Gurgaon

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Case: A Class Divided - Why discrimination exists?

Taste-based discrimination (Economic growth will reduce it, eg. in

IT sector)
Statistical discrimination (experience based/anecdotal, for eg.
Punjabi girls as airline crew)
Unobservable factors like in-group preferences (for eg., other
participants in the business community prejudiced against Dalit or
Muslim employees, making employer not hire them)

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Neumark: Introduction

Research on labor market discrimination’s importance for public

policy.
Examining raw wage differences between groups.
Historical approaches - Regression-based ”decomposition” approach
or estimating marginal productivity and wage differentials.
Challenges in drawing definitive conclusions from these
nonexperimental research.
Growth of experimental (creative) research to understand the
nature of discrimination.
Ref: Neumark, David. ”Experimental research on labor market
discrimination.” Journal of Economic Literature 56, no. 3 (2018):
799-866.

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Nature of Discrimination

Statistical Discrimination: occurs when individuals or organizations

make decisions based on group characteristics or stereotypes,
rather than individual characteristics. For example, if employers
assume that a particular group is less likely to be committed to a
job based on statistical trends, they may discriminate against
individuals from that group in hiring decisions.
Taste-Based Discrimination: also known as preference-based
discrimination, occurs when individuals or organizations have
personal preferences or biases against certain groups. For example,
if an employer personally dislikes individuals from a specific ethnic
background and makes hiring decisions based on this bias.

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Nature of Discrimination

Implicit Discrimination: refers to discrimination that is not

conscious, occurs when individuals/organizations unintentionally
discriminate due to implicit biases or stereotypes they may hold
unconsciously. Can be challenging to identify. Psychological tests,
such as the Implicit Association Test (IAT), used to measure it.
Statistical discrimination is based on generalizations about groups,
taste-based discrimination stems from personal biases and
preferences, and implicit discrimination occurs unintentionally due to
unconscious biases.
Correspondence studies to distinguish between Taste-based and
Statistical discrimination
a = Difference in call-back to emails sent with male/female
names
b = Difference in call-back to emails sent with male/female names
and CV to signal high quality candidate
a is aggregate discrimination; b is statistical discrimination; a-b
is taste-based discrimination 5/
Muslim Women in India Face Hiring Bias for Entry-
Level Roles

Decline in the number of working women in India.

Gender disparities exacerbated during the
pandemic.
Low workforce participation of women, especially
Muslim women.
Study conducted focusing on Muslim women’s challenges in entering
the workforce.
Source: https://hbr.org/2022/09/research-muslim-women-in-india-face-
hiring-bias-for-entry-level-roles

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Experiment

Correspondence study: ”Resume study” to examine hiring biases

against muslim women.
Two identical resume prototypes, differing only in candidate names
(Habiba Ali and Priyanka Sharma).
Over 2,000 applications sent for 1,000 job postings.

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Findings

Muslim candidate received only half the number of callbacks as

the Hindu candidate.
Stark difference: Priyanka Sharma received 208 positive
responses, while Habiba Ali received 103 responses.

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Call to Action

The need for change at multiple levels:

1 Individual level: Awareness of implicit biases and stereotypes.
2 Research level: The importance of uncovering systemic biases.
3 Organizational and leadership level: Developing inclusive hiring
policies.
The role of hiring managers in driving change.

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Implications

Becoming more conscious in hiring

Implementing blind hiring practices.
Creating work tests to evaluate
skills.
Diverse interview panels to minimize early bias.
Building a culture that values diversity and inclusion.
Advocating for research on religious disparity within
organizations.

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Are students biased against female instructors?

Worldwide underrepresentation of women in faculty positions

One potential explanation: Gender bias against female
instructors
Empirical research in developed countries shows bias in
student evaluations of teaching (SET) scores
Lower SET scores may lead to reduced time for research,
hindering career progression and tenure
Gap in research on gender bias in SET scores in developing
countries like India
Higher stakes in India due to (i) low female labor force
participation (23%) and (ii) general evidence of gender
discrimination
Ref: Arora, Puneet, and Moumita Roy. ”Are Students Really Biased
against Female Professors?-Experimental Evidence from India.”
Experimental Evidence from India (2023).
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Experiment
We design a natural field experiment:
(Gender Intervention) We randomly vary the voice tone of
the instructor in an audiovisual lecture
(Information Intervention) We randomly vary whether student
receives information on an instructor’s accomplishments
Students attend the lecture, attempt a short 8Q quiz, rate
teaching effectiveness on 13Q (6 dimensions and Average SET
score)
Our design allows us to study the causal effect of instructor’s gender
on SET scores, devoid of any confounds.

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Findings

Contrary to our expectations, no bias in SET scores in two

Gender treatments
Information treatments generated a bias in favor of
female instructors
Female students are the main driver of gender-bias observed in SET
scores

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Do Women Avoid Salary Negotiation?

Men often occupy higher positions in society. Eg: women earn

approximately three-quarter’s the amount of men’s earnings and only
2.5% of the five highest-paid positions in US firms are occupied by
women
Gender wage gap exists, with women earning less. Potential
reasons cited - human capital differences, discrimination, time out
of the labor force, and competitiveness preferences.
Several lab experimental studies show: men between 4 to 9
times more likely to salary negotiate than women
Babcock and Laschever, 2003 estimates: individuals who do not
negotiate first salaries lose more than $500,000 by age 60
Ref: Leibbrandt, Andreas, and John A. List. ”Do women avoid salary
negotiations? Evidence from a large-scale natural field experiment.”
Management Science 61, no. 9 (2015): 2016-2024.

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Methodology

This study explores the role of salary negotiation behavior in

gender differences in wages.
Natural field experiment with job advertisements.
Two types of job ads: one with negotiable wages, one without.
Job ads designed for ”masculine (help with sports)” and
“gender-neutral (help with fundraising)” roles - to see
whether women negotiate lesser in masculine nature jobs
Using a 2 × 2 factorial design:
Varying the negotiability of wages (none vs. explicit negotiability).
Varying the employment advertisement (general vs. masculine job task).

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What is Natural in this Field Experiment?

Placing real job advertisements for administrative assistant

positions
18 job ads in nine major US metropolitan areas (about
2500 applicants).
Posted on city-specific internet job boards (Nov 2011 - Feb
2012). 10 applicants hired.

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Findings and Implications

Main RQ: Are there gender differences in (i) sorting into negotiable
salary workplaces and (ii) initiation of salary negotiations once the
person applies.
Finding 1: Men more likely to apply to jobs where negotiation
is ambiguous, while women more likely to apply to jobs where
negotiation rules are concrete.
Implication: A simple mention of “negotiable wages” can
increase women applications
Finding 2: Men negotiate more than women when in an
ambiguous negotiation environment, while gender differences in
negotiation vanish when the negotiation possibility is explicitly
stated.
Implication: Men benefit more from ambiguous wage
determination rules. Women prefer concrete wage determination
rules.
Note: The effects were studied in an impersonal negotiation 17 /
Gender differences in job entry decisions

R.Q.: Is there gender gap in competitiveness?

Competitiveness preferences are important because they may not
only affect the job entry decision, but also the choice to compete
for promotions and the decision to negotiate salary
Lab studies show men prefer to compete while women shy
away from competition
Limited field evidence for the gender gap in
competitiveness. This study conducts a large-scale natural
field experiment.
Ref: Samek, Anya. ”Gender differences in job entry decisions: A
university-wide field experiment.” Management Science 65, no. 7 (2019):
3272-3281.

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Experimental Design

A natural field experiment with over 35,000 university students.

Randomized potential job applicants
Variations in compensation schemes and job descriptions.
Directly identifying the effects of performance pay and other job
characteristics on willingness to apply for the job.
Exploring the role of social preferences (not-for-profit work) in
reducing the gender gap.

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Findings

When the job is described as a performance-based tournament

rather than a flat rate compensation scheme, propensity to
apply drops, significantly more so for women.
Business and Engineering degrees more likely to go for
competitive payment scheme
The introduction of a not-for-profit job frame increases
application rates, especially in competitive compensation
environments.
Suggestive evidence that the non-profit frame decreases the
gender gap in the willingness to apply to competitive jobs

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