Behaviour Change

PROPAGANDA FOR CHANGE is a project created by the students of Behaviour Change (ps359) and Professor Thomas Hills @thomhills at the Psychology Department of the University of Warwick. This work was supported by funding from Warwick's Institute for Advanced Teaching and Learning.

Tuesday, March 25, 2014

Don't hate, Negotiate

“Alternatives available to a person in a negotiation serve as differential power that can be utilised to achieve the desired outcome”.1 That was the mind-set I took anyway as I was about to go into a negotiation. The scene; in the same week I had been offered summer internships at two separate financial firms (much to my surprise) and was somehow in my head trying to decide which one to take up on the offer…

Whilst weighing up my options, it occurred to me that the one I was edging towards in terms of what I would preferably do day-to-day paid a considerably lower salary than the other. And of course for someone who as of the end of June would no longer be protected under the ‘allowed to be severely overdrawn’ student umbrella, money was a big factor!

Therefore I thought, why not phone up the company not putting up good money and ask them for more? Being a Psychology student, I was confidently aware that one of the key ‘game-changers’ in a negotiation is the power of alternatives

Having more than one option to turn to – which I had in the form of two job offers – should in theory swing the negotiation in my favour. Not only do I come across as a high-in-demand scarce resource which should increase my ‘attractiveness’, but I also hold the power to choose one job over the other with ease. However for the company in question, whilst no doubt being prestigious, have invested a significant amount of time in recruiting me; and therefore would surely be unwillingly to resort to their alternative of raising my pay which would mean effectively losing their investment.

With this fresh in my mind, and equipped with a prepared script of things to say I proceeded to phone the firm in question to express my request. I went about the conversation slowly, explaining that I may have to choose the alternative firm as the salary was an issue. After admittedly being pretty pleased with myself for reaching the point in life where you can ask for a pay increase, I eagerly awaited the HR employee’s response… Surely she would say yes?  Surely they want me enough to pay me a bit more? After a few seconds pause she responded.  And that response was a clear, resounding, NO.

After hanging up I asked myself the obvious question; where did it all go wrong? This statement from Pinkley et al (1994) put perspective on the issue; "the better one’s own alternative relative to the other parties; the larger one’s piece of the resource pie". Looking back on it, I was mistaken in believing that my alternative was better than the firms. The woman HR explained quite frankly how they receive hundreds of applications each year, and basically implied that there were a multitude of other candidates who would take the job for less money than I was offered. She may as well have said ‘You’ll get what you’re given’.

And that was the end of that. For me personally, two key lessons were learned:

1.When going into a negotiation; do not think that you are ‘all-that’

2. Whilst it may be easy to come up with your alternatives, spend more time detailing what alternatives the person on the other side of the table has as well.

1 Pinkley, R. L., Neale, M. A., & Bennett, R. J. (1994). The impact of alternatives to settlement in dyadic negotiation. Organizational Behavior and Human Decision Processes, 57(1), 97-116.

Alexander Lee

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