The Salary History Anchor

Bourree Lam writes in the Atlantic about the negative results that can occur when a prospective employer asks for your salary history:

In behavioral-economics-speak, a potential employee’s salary history is information that can result in anchoring — the cognitive bias that makes people focus around a number once it’s been stated, with only some small room for adjustment. Hence why lying about one’s salary history is useful: One study on the effect of anchors on salary offers found that even implausibly high anchors resulted in better compensation.

But this can have unintended — and unfair — consequences: Beth Cobert at the Office of Personnel Management (OPM), the federal government’s HR department, argues that the question can perpetuate gender inequality. Last week, Cobert issued a memo advising federal agencies against an over-reliance on salary history for determining compensation.

“Reliance on existing salary to set pay could potentially adversely affect a candidate who is returning to the workplace after having taken extended time off from his or her career or for whom an existing rate of pay is not reflective of the candidate’s current qualifications or existing labor market conditions,” said Cobert in the memo.

The only time I’ve been ask to list my salary history was when I worked minimum wage jobs back in high school and college, though I suspect that’s because those employers want to pay the lowest hourly rates possible. In the last few jobs I’ve had, I’ve been fortunate to have applied or worked at places where they were upfront about salary offerings, or asked what my requirements were.

What about you? Have you ever been asked about your salary history and been anchored to what you’ve been previously paid?

Photo: Sinead Friel

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