The psychological guide to salary negotiations
To many people salary negotiations are like root canal treatments: Necessary but highly unpleasant. This applies particularly to women whose reluctance for negotiations contributes to the gender gap.
There is no definite way to ace salary negotiations. There are too many variables that make them unpredictable. Nevertheless, psychology provides you with some insights that help you enter negotiations less anxious and leave them more successful.
1. Prepare for confidence
Confidence definitely helps in negotiations. But where should you derive it from?
Good preparation is essential for any negotiation. And, thus, also for salary negotiations. You should know what other people in comparable positions earn and you should have fleshed out your strongest selling points. At best, you have even role-played the situation with a friend.
Everything that prevents you from being taken by surprise is an advantage.
Especially when you are applying for a job, your future employers might want to use surprise for their advantage. For example, by addressing the salary question much earlier than you would have expected it. Or when you are tired from two hours of personality quizzes and test assignments. So better be prepared at any time.
This, by the way, does not mean that it is to your advantage to assault your superior about a pay raise when they least expect it. When you ask for more money, make sure your counterpart is not busy. Research suggests that negotiating with someone who is distracted only helps you if you have weak arguments. And you do not want to negotiate your pay raise with weak arguments, do you?
2. Mind your (body) language
Assumed, you have good arguments. How do you deliver them?
Make it short, slow and easy.
A good argument does not need to be inflated unnecessarily. Nor does it need to be stuffed with technical terms or foreign words. Try to be precise and speak slowly.
There are some other tricks for formulating and putting your arguments in order. Do not let people wait for your best argument but present it straight away. Also, keep in mind that people react to losses stronger than to gains. If possible, adjust your arguments accordingly. Show your boss how much money you save the company instead of what you gain for it, for example.
With all the talking, never forget how important it is to listen. Do not give your negotiating partner the feeling to be a negotiating enemy, but signal your interest for their position. Lean in to them, nod from time to time (not all the time, though!) and pick up their line of argument.
3. Feelings – a difficult balancing act
Emotions are a difficult topic when it comes to negotiations. While you cannot switch them off, you can suppress expressing your feelings. This, however, is strenuous and likely to consume mental energy - energy you would rather invest in the discussion.
Fear and anger are especially dangerous. There is evidence that anger sometimes helps in negotiations. But be assured that it is always safer not to scream at your superiors. You also do not want them to see your fear.
So what should you do?
The first step is to acknowledge – to yourself! – that you feel anxious or angry. Ideally, this would be a good time to take a break in order to calm down. But often this will not be an option. You can, however, get an invisible mini-break. Just take a deep breath and straighten up. Adjust your posture as if you were calm and strong. This will eventually make you feel a little calmer and stronger.
Your emotional reaction is so strong that you feel you cannot hide it? A decent emergency plan is to sell anger or fear as confusion. Ask your negotiating partner if you got them right. This way, you buy yourself some time to calm down and give the other person a chance to explain. At best, your feelings result from a misunderstanding.
4. The damn first number
“What are your salary expectations?” This question is feared by many – quite rightly. It is tricky. The whole negotiation depends on this number. You do not want it to be too low. But not brazenly high either.
It is right to be cautious about first numbers. They are an “anchor” for the whole discussion, as psychologists put it. The interesting thing about these anchors is that we often use them in a very irrational way. In an experiment, people had to to spin a wheel of fortune that was numbered from 1 to 100. Then they had to guess how many percent of the African countries were part of the United Nations. It is pretty clear that these numbers have no connection at all. Still, people’s guesses about the African Nations were largely influenced by the number on the wheel of fortune – even if they themselves denied this influence.
This example shows how much numbers can influence people – even without their knowledge. Therefore you should think cautiously about the first number you want to name in a negotiation. If you want to avoid the whole discussion to be influenced by one single number, it can make sense to start off with a range.
5. Try different perspectives – and dimensions
It is natural that in salary negotiations your primary concern is: What’s in it for me? And sometimes, it can be an advantage to show your boss that you are an unrelenting competitor in a negotiation – especially, if this is a skill you need in your daily work.
Still, there are always two sides to a negotiation. And you can benefit a lot from looking at both. Giving the other person the feeling that you are interested in cooperation rather than only your own advantage is likely to make them more cooperative, too. One way to show yourself as cooperative is making concessions.
Concessions were not exactly what you had in mind when it comes to your salary negotiation? Well, of course we are not suggesting that you should just give in and take the minimum wage. But there are more things to negotiate about than just money. And you can use this to your advantage. Introduce dimensions such as holidays, flexible working hours or your own parking space to the conversation. Once there is more than one thing to negotiate about, concessions become a lot easier. Maybe you are willing to lower your sights about the money in exchange for more holidays or a company car? The reciprocity bias makes others likely to return a favor, in this case a concessions, if you do the first step.
Negotiating about more than one thing might also make other biases work for your advantage. There are two interesting phenomena when you confront someone with requests successively. Firstly, if someone denies you a big request they are more likely to concede something small afterwards. That means a “no” to your pay raise could lead to a “yes” for two more holidays. Secondly, people who already granted you something small, are also more likely to grant you something bigger afterwards – first a parking space then a pay raise. There is no general rule when each of these work. However, the first makes more sense for unpromising negotiations, the latter when chances seem good.
We hope that with our tips you can look forward to your next negotiation – even if only slightly more than to your next root canal treatment.