Adapted from “Make Them More Satisfied with Less,” first published in the Negotiation newsletter.
In negotiation, sometimes you just don’t have much to give. If your department’s budget has been slashed, your subordinates will have to settle for smaller raises than usual – or none at all. When consumer demand for your red-hot product levels off, your vendors will have to get used to smaller orders. If your child wants a dog but you’re allergic, the deal may be a nonstarter. You might temper disappointing news with promises of interesting projects, future business, or a turtle, but such creative attempts to unlock value won’t take away the initial sting of disappointment.
In the business world, an unsatisfied counterpart might fail to honor your agreement, avoid working with you again, or even sabotage your reputation. You can reduce the likelihood of such negative reactions by attending to your counterpart’s subjective experience of the negotiation.
Contrary to conventional wisdom, most negotiators don’t exclusively or even primarily focus on their objective outcomes. In fact, researchers Jared Curhan and Heng Xu of MIT’s Sloan School of Management and Hillary Anger Elfenbein of Berkeley’s Haas School of Business have found that negotiator satisfaction is based on a number of highly subjective factors. With feedback from everyday negotiators and experts, the researchers created a “subjective value inventory” (SVI) that maps the social and emotional consequences of negotiation. Four general concerns emerged, only one of which is related to objective outcomes:
1. Feelings about instrumental (measurable) outcomes. As we all know, negotiators can have strong feelings about “winning” and “losing.” People also feel strongly about whether an agreement complies with fairness standards, industry precedent, and so on.
2. Feelings about the self. Negotiation also affects our feelings about ourselves. A negative experience might cause someone to question her competence as a negotiator and the degree to which she adhered to her principles and values.
3. Feelings about the negotiation process. The degree to which your counterpart feels you listened to his concerns, negotiated fairly, and considered his opinions will affect his satisfaction, as will the ease or difficulty with which you reached agreement.
4. Feelings about the relationship. Satisfaction also varies according to the degree to which negotiators build a solid foundation for their relationship, create trust, and form positive impressions of each other.
Curhan and his colleagues tested their SVI measure by having MBA students engage in a two-person negotiation simulation in which both sides could claim and create value. After the simulation, students rated their perceived outcomes on the SVI’s four factors. Participants who were more satisfied across the four dimensions were significantly more likely than less-satisfied participants to want to work with their teammates in the future. Notably, negotiated outcomes alone had no impact on participants’ inclination to work together again.
It seems that an individual’s subjective negotiation experience affects her satisfaction much more than any quantitative measures of the deal she receives. That’s good news when you don’t have a lot to put on the table.