So, you believe you’ve done everything you can do create value in your negotiation. You engaged in logrolling, making trades based on your and the other party’s different preferences on particular issues. You brainstormed new issues to add to the discussion, added a contingent contract, and proposed multiple offers simultaneously to identify which your counterpart favors. You claimed as much value as possible for yourself, but feel confident that both parties reached a great deal.
Despite these attempts at value creation, the other negotiator could still walk away from the bargaining table feeling dissatisfied by the outcome. Negotiator satisfaction is based on many factors other than objective outcomes, find Jared Curhan and Heng Xu of MIT’s Sloan School of Management and Hillary Anger Elfenbein of Berkeley’s Haas School of Business in their research.
One key component of negotiator satisfaction is our sense of the fairness of the negotiation process and outcomes. Fortunately, there are steps we can take to improve both the deal’s objective fairness and parties’ perceptions of the fairness of their outcomes.
1. Manage expectations.
All negotiators enter talks with expectations about the quality of the deal they are likely to achieve. Negotiators who feel they are in a weak bargaining position may not expect much, while those who feel confident and secure may have very high expectations—and may feel the outcome is unfair if they fail to meet their goals.
There are several ways to manage your counterpart’s expectations at the bargaining table and thus improve the odds that he will perceive the outcome to be fair, according to Wharton School of Business professor Maurice E. Schweitzer.
First, you might lower the other party’s expectations by explaining beforehand that you don’t have a lot to give—whether due to a slow year, a tight budget, disappointing sales, and so on.
Second, avoid making an initial steep concession that could lead the other party to expect similarly significant concessions as the negotiation goes on. Instead, start with a relatively small concession to temper the other party’s expectations.
Third, don’t agree to the other party’s demands too quickly. A team of researchers led by Adam Galinsky of Columbia Business School found that negotiators whose initial offers were immediately accepted were less satisfied with their agreement than negotiators whose offers were accepted after a delay, regardless of the objective quality of the outcomes. It seems that when someone hastily accepts our offer, we assume we ended up with an unfair deal.
2. Combat egocentrism.
Our fairness perceptions tend to be egocentric—that is, they are biased in a self-serving manner. When making decisions, we first determine our preference for a certain outcome on the basis of our own narrow self-interest and then look for ways to justify our preference on the basis of fairness, according to researchers David Messick and Keith Sentis. As a result, we may honestly believe we deserve more of a resource than an impartial observer would deem to be fair.
In negotiation, it’s common for both parties to reach self-serving fairness interpretations, a situation that can lead to impasse or dissatisfaction with the results, and perhaps a damaged relationship.
We need to recognize that our fairness determinations are likely to be biased in our own favor, as are our counterpart’s. How can we reduce the impact of self-interest on our judgments? Aim to make the decision you would make if you didn’t know what your role was in the negotiation, advises Harvard Business School professor Max H. Bazerman. In addition, try to take the other party’s perspective to imagine what they might deem to be fair, and why.
3. Prepare for social comparisons.
In virtually all realms of life, we compare our own outcomes to those of others. We compare the size of our house to the size of our neighbors’ houses, our salary to our coworkers’ earnings, and so on.
Such social comparisons can significantly affect how fair we perceive an offer or outcome to be in negotiation. If we find out that a classmate was offered a significantly higher salary than we received from the same firm, we might conclude that the hiring firm was being unfair, even if our classmate was taking on more responsibilities than we were.
In negotiation, we need to recognize that our ability to generate a complete, accurate social comparison set is limited, notes Schweitzer. Data that we’re unaware of may fully justify an outcome that seems unfair at first glance, so seek it out if necessary. In addition, we can try to steer our counterparts toward appropriate social comparisons. For example, a hiring manager might present a candidate with a salary range for employees at his level to discourage him from comparing himself to employees at higher levels.