How to negotiate your job offer, according to psychologists

Whether you are negotiating your salary at a new company, trying to get a raise at a current one, or attempting to increase benefits or stock shares, look to this recent study to get the best deal. Like they say in the Hunger Games, “may the odds be ever in your favor.”

Usually, in a negotiation, both parties have access to resources the other one may not be privy to. This is a prime example of the old idiom “I’ll scratch your back if you scratch mine.” But how do we “scratch” that back strategically to have a negotiation lean in our favor? Who should speak first? Should you hold your cards close to your chest or offer transparency with the resources you can bring to the table in exchange for something you need?

When trying to develop a working relationship with someone it’s important to know some psychological tips and tricks to make it seem like coming out on top of negotiation was the other party’s idea all along. Is it better to make the first offer or respond to the one presented to you? Let’s find out by taking a closer look at the study published recently in Psychology Today.

The case study

A team of psychologists staged a mock negotiation in regards to getting better stock options at a company. In this study pairs of participants negotiated over the sale of stock shares in a made-up company. One person was assigned the task of making the first offer. The initial offer focused primarily on what they were going to be able to provide to the person they were negotiating with for example (I can offer X amount of money for N amount of shares of stock). In the second run-through of negotiations, the participant framed the offer with what they wanted from the other person first for example (I request N amount of shares of stock for X amount of money).

Obviously, the participant offering up negotiations first inserted the amount of money they were willing to offer in return for the amount of stock they were requesting from the other person. After hearing the terms of negotiations that person had the task of coming up with a counteroffer. This went on until either the parties agreed to the terms or walked away from the offer entirely. What did researchers find out after running this experiment?

The following press release further examines this particular phenomenon.

“When the initial offer focused on what the party was giving to the other (“I offer…”), then the party making the offer tended to make more profit than the one receiving the offer at the end of the negotiation. In contrast, when the initial offer focused on what the party wanted from the other (“I request…”), then the party making the offer tended to make less profit than the one receiving the offer.”

Researchers Johann Majer, Roman Trotschel, Adam Galinsky, and David Loschelder recommend that with any successful negotiation the person who offers up the resources that will help the other party out the most first usually ends up doing better in the negotiations overall.

One of the co-authors of the study adds, “When the first offer focuses on what the second party is going to get, that offer serves as an anchor, and the first party gets a favorable deal. When the first offer focuses on what the second party has to give up, the second party ignores that offer, because they don’t want to have to give things up. So, the second party in return tends to be aggressive and the final agreement ends up favoring the second party.”

How can I use the results of this study for future negotiations?

Nobody wants to give up valuable resources unless they expect something in return. This study suggests that if you begin negotiations framing the offer with what you can bring to the table initially the odds of getting what you wanted when you walked into the room are much higher. Essentially, stepping up to the plate to negotiate first allows you to set the terms of the deal.

Make sure that what you are requesting is reasonable because without a feasible goal in mind chances are the anchor of your argument will not be strong enough to convince your boss to give you that raise. Be mindful of your company’s limitations as well, especially after so many businesses took a hit this year. You could end up not getting what you ask for or worse you can be saddled with an aggressive counteroffer or looked over for increases in benefits in the future.

Make sure to do your research before offering up negotiations to ensure it will benefit you and at the same time be feasible for the person working with you and your career goals.

Business is always better when it’s mutually beneficial.