Adapted from “Don’t Get Stuck in the Status Trap,” first published in the Negotiation newsletter, September 2009.
Graduating MBA students often tend to choose their first postgraduate jobs based on vivid aspects of their job offers, such as a high starting salary or the prestige of the firm, Harvard Business School professor Max H. Bazerman has observed. Bazerman theorizes that these students base their decisions on status concerns; they choose the job that will most impress their classmates. In doing so, they overlook factors that might actually matter more to them, such as job location or a philanthropic mission. No surprise, then, that many MBA grads quickly leave their high-status jobs in favor of work that’s better suited to their long-term happiness and career goals.
Status concerns can be a prime motivator in negotiation, according to professor Iris Bohnet of the Harvard Kennedy School. When determining what we want out of a given negotiation, we tend to focus on what those around us have achieved. If you’ve ever negotiated for high-status items that you later realized you neither wanted nor needed, heed the following three guidelines in your next important negotiation:
1. Audit your preferences. Unprepared negotiators are much more susceptible to high-status information during a negotiation than prepared negotiators are, according to Bazerman. What’s more, sellers are often skilled at triggering our status concerns with tantalizing offers of luxury goods, upgrades, and other bells and whistles we don’t need. That’s why impulse purchases so often prove disappointing.
You can defuse the tendency to chase after status in your negotiations by thinking long and hard about what you value most. What life and career goals would you like to achieve in the next 5, 10, or 25 years? What steps can you take to realize those goals, and what sacrifices must you make to attain them? When you examine your priorities in this manner, you become capable of seeing status temptations more clearly.
2. Compare yourself to the right group. Negotiators often err by making unrealistic social comparisons, according to Bohnet. Rather than comparing ourselves to those in a similar situation, we look upward at those who seem to have more of what we want.
In a November 2005 Negotiation article entitled “Status Anxiety,” Bohnet wrote, “If past housing slumps are any indication, the U.S. real estate market is likely to become the next case study for this phenomenon. When the recent boom years inevitably draw to a close, homeowners will have a hard time adjusting their demands downward.” As Bohnet correctly predicted, home sellers in our current market often focus on how much their neighbors got for their houses during the bubble years. Consequently, sellers fail to adjust their asking prices to the new economic reality.
Unrealistic social comparisons often lead to impasse. To reach a deal, you may need to take a cold, hard look at the reference group you’ve chosen—and adjust downward as needed.
3. Prepare for signs of envy. Tensions regarding status can flare up at the negotiating table as well. If you’ve ever been intimidated by a counterpart’s pedigree, refinement, or possessions—or if you’ve ever tried to intimidate a fellow negotiator with your own display of status—then you’re familiar with this dynamic.
In their research, Simone Moran of Ben-Gurion University in Israel and Maurice E. Schweitzer of the Wharton School at the University of Pennsylvania found that envy of a counterpart’s status caused negotiators to justify engaging in unethical behavior. It’s also possible that you might spend more resources than you should trying to impress a high-status counterpart. Beware these common pitfalls the next time you feel envious of a negotiating partner, and check your behavior accordingly.