Women's pay: Microsoft boss Nadella wasn't all wrong

Microsoft CEO Satya Nadella has caused outrage by suggesting that women who believe they are not being paid fairly should not ask for a pay rise, but should have “faith in the system” and rely on “good karma”.

It came up when Nadella was asked by Harvey Mudd College President Maria Klawe what his advice was for women who are not comfortable asking for a pay rise or a promotion. He responded:

“It’s not about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along…

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“And that, I think might be one of the additional superpowers that quite frankly women who don’t ask for a raise 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 I want to really give more responsibility to.’

“And in the long term, efficiency, things catch up. And I wonder… I wonder whether taking the long-term [view] helps solve… what might be perceived as this uncomfortable thing of ‘Hey, am I getting paid right? Am I getting rewarded right?’

“Because [the] reality is your best work is not followed with your best rewards. Your best work then has impact, people recognise it and then you get the rewards…”

The social media universe blew up like Betelgeuse going supernova. As Brooke Masters wrote in the Financial Times: “Mr Nadella’s off-the-cuff advice seemed to confirm the sneaking suspicion that many women have about their companies - that they reward men for being forceful but penalise the same behaviour in women as ‘pushy’.”

Nadella’s retraction was swift and contrite. "I answered that question completely wrong. Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap.

“I believe men and women should get equal pay for equal work. 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."

In fact, research shows women DO ask – but, as a strategy, it doesn’t work. What does work is sticking at your job.

I recently met the guru on gender pay differences, Allyson Zimmermann of Catalyst. Catalyst's research on high-flyers (MBA graduates from the world's top business schools) shows that when women ask for a rise, or change jobs to advance their careers, they don’t gain financial ground. Women who changed jobs two or more times post-MBA earned $53,472 less than women who rose through the ranks at their first job.

Why is this? “Our research shows that men are promoted based on potential… whereas women are often promoted based on proven performance,” said Zimmermann.

Because of this, Catalyst found, women actually tend to make more money by staying with the same employer than by switching jobs, while the opposite is true for men. Women who spend their careers at one company build relationships and credibility over time, Zimmermann said.

So Nadella isn’t all wrong. Women who do good work do receive a higher pay package and more responsibility. However, what is true when you’re seven years old (put your head down and work hard and you’ll do well) isn’t true when you’re 27.

Nadella says “your best work has impact”. This is true - but women only advance after doing their best work if they make sure everyone knows who did the work.

Catalyst’s study showed that when women were proactive in making their achievements known, they advanced further, made more money and had higher job satisfaction. Interestingly, this isn’t true for men. Strategies that worked for men include working long hours and looking elsewhere for jobs.

But it does pay for women to stick around. Véronique Laury, Kingfisher’s new CEO, has been with the company since 2003. And even the most old school of old boys’ clubs can be cracked, as Mary Barra, General Motors’ CEO showed this year. It only took 33 years at GM for her to do so.