For a new employee, salary negotiation skills can be the most important and the most intimidating, but the most important, of difficult conversations to have at the beginning of your career. A new employee, successfully negotiating a salary offer up by $5,000 could make a huge difference over the course of her career. A 25-year-old employee who enters the job market at $55,000 will earn about $634,000 more over the course of a 40-year career (assuming annual 5% raises) than an employee who starts out at $50,000. But not everyone negotiates for a higher pay when offered a job, and some who do are dissatisfied with the final outcome.
In a 2009 negotiation research study, researchers Michelle Marks of George Mason University and Crystal Harold of Temple University surveyed 149 professional employees who had been hired in the previous three years – specifically, tenure-track faculty at a university and part-time MBA students – about their wage negotiations for their current position. The participants were questioned about their attitudes toward negotiation and risk, their negotiation strategies and outcomes, and their level of satisfaction with the wage negotiation process. In addition, their degree of of power in negotiation was measured based on their work experience, other job offers, and knowledge of the organization’s past salary offers.
Salary Negotiation Skills: Five Negotiation Strategies for Employees Negotiating Wages
The researchers identified five types of negotiating strategies:
Salary Negotiation Tip #1. Collaborating (engaging in problem solving to reach the best possible outcome for both sides);
Salary Negotiation Tip #2. Competing (trying to maximize one’s own outcomes with little concern for others);
Salary Negotiation Tip #3. Accommodating (putting the other party’s concerns first);
Salary Negotiation Tip #4. Compromising (trying to reach middle ground); and
Salary Negotiation Tip #5. Avoiding (dodging negotiation altogether).
Independent of the power the applicants had at the table, choice of negotiation strategy turned out to be a critical factor in determining the size of the salary increase that the participants negotiated.
Different Negotiation Styles: Collaboration versus Competition
In the study, those who chose to negotiate salary, rather than avoiding negotiation and accepting the offer on the table, increased their starting pay by an average of $5,000 primarily by using competing and collaborating bargaining strategies. Those who behaved competitively at the negotiation table did better than those who focused on collaboration, but collaborators were more satisfied than competitive bargainers with the negotiation process.
Different Negotiation Strategies: Risk-Averse and Risk-Taking Strategies at the Bargaining Table
By contrast, compromising and accommodating strategies were not linked to salary gains. Participants who were risk averse were less likely to negotiate a salary, and when they did, they had an accommodating style that left them feeling dissatisfied with their results.
Female participants in Marks’ and Harold’s study were no less likely than male participants to negotiate their salaries; however, the men negotiated higher salaries than the women did. Interestingly, among participants who faced a competitive opponent, women responded more competitively than did men, suggesting that women may be more likely to adapt to their counterparts’ negotiating style when putting their salary negotiation skills to practice.
Based on their results, the negotiation researchers conclude that it pays to negotiate assertively for a salary increase upon being offered a job. They also encourage employers to recognize that giving employees wiggle room to bargain up their starting pay could help create a more satisfied, productive workforce. We add the caveat that if you don’t have a competing job offer, you should negotiate with caution, since there’s always a chance bargaining may cause the employer to revoke the offer that’s on the table.
Related Business Negotiations Article: Team Building Negotiation Example – Chinese Women Face a “Sticky Floor” – How Chinese female negotiators are bargaining for greater power and influence in employment contract negotiations.
Adapted from “For a Higher Salary, Choose the Right Strategy,” first published in the Negotiation newsletter, December 2010.
Originally posted in 2012.
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