Dear Negotiation Coach: What Are the Benefits of a Handshake Agreement

By on / Dealmaking

handshake agreement

In the past, and even today in some settings, a handshake agreement was as good as gold. While many agreements are now concluded with signatures and legal agreements, there are still benefits of nonverbal behavior in negotiation. Shaking hands seems like such a natural way to begin a negotiation, but does it signal too much eagerness to reach agreement?

We spoke to Francesca Gino, Professor of Business Administration at Harvard Business School and author of Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan (Harvard Business Review Press, 2013) to find out more.

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The long-lasting benefits of a handshake agreement

In 2013, U.S. president Barack Obama and Iranian president Hassan Rouhani planned a historic encounter at the United Nations General Assembly. The meeting, months in the making, was centered on a simple handshake agreement between the two presidents that was meant to encourage a negotiated resolution to decades of hostility. When Rouhani refused to follow through, pundits referred to the moment as the “historic non-handshake” and suggested that negotiations would be irreparably damaged by the non gesture.

How could a simple handshake carry such weight? you ask. When negotiating with new counterparts, we rely on various factors to form an impression, including physical appearance, speech, and subtle nonverbal behavior. Importantly, nonverbal behavior can have up to five times the impact of verbal messages on judgments as to whether someone is friendly and likable. Research even shows that restaurant servers who touched their customers on the shoulder earned larger tips than those who didn’t.

As it turns out, handshaking—a nonverbal behavior that typically bookends negotiations—influences our choice of strategies and our negotiation outcomes. When used in greeting, handshakes communicate information about one’s personality, such as sociability and warmth. In one study, observers judged a relationship to be more trusting, affectionate, and stable when individuals began with a handshake agreement vs. when they did not.

In her own research, Professor Gino found that merely being randomly assigned to shake hands before a negotiation increases cooperative behavior, decreases antagonistic behavior, and improves negotiation outcomes.

In one study, she and her colleagues collected data on pairs of executives who negotiated as the buyer and seller in a hypothetical real estate negotiation. The property is zoned for residential use only, and the seller believes that the laws are unlikely to change soon. The buyer, however, knows that the zoning laws will soon change so as to allow development of the land for commercial use; the property will be considerably more valuable as a result. This information gives the buyer a clear advantage over the seller. The only issue the executives were asked to negotiate was the price for the property. Half of the pairs were instructed to shake hands before negotiating; the other half were not instructed about handshaking, and most of them did not shake hands. They found that pairs in the handshaking condition divided up the pie more evenly than those in the control condition. In addition, buyers in the handshaking condition were less misleading about the zoning change than were buyers in the control condition.

In follow-up studies, pairs who shook hands before engaging in an integrative negotiation—one where parties could discuss multiple issues and potentially create value—achieved higher joint outcomes than those who did not shake hands. This was because the handshakers more openly expressed their preferences on issues where tradeoffs were possible.

Returning to the question, the simple gesture of a handshake agreement before the start of negotiations can indeed promote cooperative behavior, which in turn leads to more successful dealmaking.

A final note: Handshaking is more common in some cultures than in others. For instance, in Japan, bowing is a more typical form of greeting. By conforming to bows and other gestures of greeting, you’ll reach the same benefits as those found in research in the United States.

What is your experience with a handshake agreement? Do you find it carries the same weight as a written agreement in some circumstances?

 

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