Get Ahead

You could be negotiating your salary all wrong

Women meeting in business office
MoMo Productions

When it comes to negotiating your salary, conventional wisdom suggests you should "go hard or go home."

But new research could turn those assumptions on their head and cause you to rethink how you approach your next pay raise.

Hardball "winner takes all" strategies are too short-sighted and fail to take into account ongoing relationships, according to researchers from Wharton business school, who argue that balanced bargaining — or avoiding negotiations entirely — could be the best route to achieving your long-term goals.

"Sometimes by being more assertive, by being more aggressive, you might end up with a better negotiated outcome … but ultimately, through that process, create conflict that causes you to end up with worse value overall," the report's co-author, professor Maurice Schweitzer said in a recent podcast.

The findings throw cold water on the traditional guidance of career experts and negotiating books, which Schweitzer said place disproportionate attention on the lead up to negotiations but fail to account for the aftermath.

"We can't assume that when we negotiate, the negotiation process ends with an agreement and we start fresh right after that. Rather, the negotiation process is part of a broader relationship that we have," he noted.

The research, which was produced in collaboration with Uber data scientist and postdoctoral researcher Einav Hart, studied 1,200 participants to measure their post-negotiation performance. Six of the experiments were included in the final paper entitled "Getting to less: When negotiation harms post-agreement performance."

Co-author Hart said the findings demonstrated that the negotiating process should be seen as an ongoing, mutually beneficial relationship. She likened the process to haggling a great price for a sofa, only to face terrible service when it comes to shipping the item.

It's not that when we leave the table everyone forgets what has happened. These relationships can have long-term implications beyond the negotiation table.
Einav Hart
Wharton postdoctoral researcher

"In a lot of these cases, the negotiation is only the beginning of our relationship or interaction," said Hart.

"It's not that when we leave the table everyone forgets what has happened. We remember the price we reached or some agreement we reached, but we also remember how we reached that outcome, and we form perceptions of our counterparts. These relationships can have long-term implications beyond the negotiation table," she continued.

The authors said the findings should encourage both employees and employers to take a longer-term view. Before embarking on future negotiations, they recommended considering two things: Firstly, whether you should enter negotiations at all; and secondly, how the process might highlight conflict or, conversely, build rapport.

"We should really be mindful of the kinds of relationships that we're cultivating. At the heart of negotiations, there's the idea that we have some conflicting interests and some congruent interests," said Schweitzer.

"One of the key ideas that we need to keep in mind is how we manage this process of interacting with other people so that we don't highlight the points of conflict and leave our counterpart feeling like their interests fundamentally conflict with ours," he added.

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