In the history of the world, nobody has ever said, “I make too much money.” And for most of us how much we make is determined during a salary negotiation.
I wanted to get the inside dirt on how we can earn more. So I decided to call an expert…
Adam Galinsky is the chair of the Management Division at the Columbia Business School. He teaches negotiation and is author of Friend & Foe: When to Cooperate, When to Compete, and How to Succeed at Both.
Adam has 5 tips that can make all the difference next time you’re looking to increase your pay. Let’s get to it…
1) The 2 Most Important Things To Have In A Negotiation
Preparation is vital. The old Sun Tzu maxim is very true here: “All wars are won or lost before they are ever fought.” What you do before the negotiation is often the most important thing.
So what does good preparation mean? Adam says two things are key:
- Getting a credible alternative. What are you going to do if they say “no”? If you have another job offer, they know you can walk away from the deal and they’re more likely to play ball.
- Knowing the market rates for your services. If you don’t know what people similar to you are being paid, you won’t know what you can reasonably ask for, or what a good or bad offer is.
(To learn the secret to being happier and more successful, click here.)
So you’ve done your homework. You have an alternative and you know what the going rates are. But what’s the right attitude going into a salary negotiation and how can you make sure you have it?
2) Use A “Power Prime”
Adam’s research shows that feeling powerful helps you make smarter decisions during a negotiation. Here’s Adam:
So how do you make sure you feel invincible? Adam says it’s as simple as taking a moment before the negotiation to recollect a time when you did feel powerful. He calls this a “Power Prime.” Here’s Adam:
(To learn how FBI hostage negotiators get the best deals, click here.)
So you’ve done your research and you used a “power prime.” But that’s all about you. How should you think about the other guy? There’s a right way and a wrong way…
3) Use Perspective Taking, Not Empathy
Adam says you want to understand the other side but you don’t want to feel for them.
You want to use “perspective taking.” All that means is trying to rationally see it from their side.
Does your prospective employer have a firm policy on salary but is very flexible on bonuses? Are they tight with money but happy to offer benefits and perks? Doing research and asking questions can help you learn the best areas to emphasize.
You want to find what is low value for them and high value for you. Here’s Adam:
Trying to understand their needs is a rational process. What Adam warns against is feeling the other side’s position instead of just cognitively understanding it.
Research shows that when you feel rather than think, you’re more likely to make unnecessary concessions. Here’s Adam:
(To learn FBI Behavioral Unit techniques for getting people to like you, click here.)
Okay, so you’re taking their perspective. Who should make the first offer? When do you want to go first and when do you want to keep your mouth shut and let them present a deal?
4) If You Have Good Information, Always Make The First Offer
You want to know what the going salary is for someone at your level and then make the most aggressive first offer you can reasonably justify. More often than not, people who make the first offer do better. Here’s Adam:
When do you not want to make the first offer? When you have no idea what the market rate is. You could accidentally ask for far too little or way too much. Here’s Adam:
The reason making the first offer is generally a good idea is because of a psychological principle called “anchoring.” The first number that gets mentioned in a salary negotiation has an incredible amount of power.
It becomes the standard by which counteroffers are judged and most people are reluctant to stray too far from it.
You can make your anchor even more sticky by not using round numbers. When someone says “$100,000” it sounds like they didn’t put a lot of thought into it and will probably accept less.
But when someone says “$102,500” it seems like they probably have a good reason for asking for that exact amount. Here’s Adam:
(To learn how to use hostage negotiation principles to deal with your kids, click here.)
So if you’ve got good info, you’re making the first offer and establishing that anchor. Great. What’s the best way to present that offer so you seem flexible and they’re more likely to accept the deal?
5) Giving Them Options Can Help
Employers often mention salary ranges but employees rarely do. Adam says this can be a mistake.
As long as you’d be happy with the number at the bottom of a range you present, giving them a range can make you look more flexible. Here’s Adam:
Another way to create more value for both sides is to do something Adam calls “multiple equivalent simultaneous offers.”
Like we discussed, an employer might be stingy with salary but flexible on bonuses. And it might be hard to get them to tell you about these preferences because they don’t want to give you more leverage.
So if you present multiple offers at the same time, all of which you’d happily accept, you create a possibility that they might be likely to accept and get around sticking points. Here’s Adam:
(To learn how to be more resilient — from a Navy SEAL platoon commander — click here.)
We’ve learned a lot from Adam. Let’s round this up and explore the best way to get started…
Here’s what Adam had to say about how to negotiate salary:
- Have an alternative and know what your market value is: Preparation is what wins negotiations.
- Use a “Power Prime”: Take a moment to think about a time you felt powerful and you’ll act more powerful.
- Use perspective taking, not empathy: Understand their needs but don’t feel their needs.
- If you have good information, always make the first offer: Get anchoring on your side. Use precise numbers.
- Giving them options can help: Try giving a range or multiple offers you’d be happy with.
Where should you start? If you do nothing else, what’s the single most important thing to do before your salary negotiation?
Know what other people are getting in as much detail as possible. Information truly is power in this case. Here’s Adam:
Negotiating salary doesn’t have to be hard. Do your research, feel powerful, use perspective taking, offer them options and don’t forget to make the first offer so you can drop a good anchor.
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This piece originally appeared on Barking Up the Wrong Tree.