Negotiation Skills: Proven Strategies for Work, Salary, Life

Before we get started, let’s take a look at two basic types of negotiation. We’ll consider the three phases of negotiation and the skills you need to become an effective negotiator.

•Integrative negotiations are based on cooperation. Both parties believe they can walk away with something they want without giving up something important. The dominant approach in integrative negotiations is problem solving.

•Distributive negotiations involve a fixed pie. There is only so much to go around and each party wants as big a slice as possible. An example of a distributive negotiation is haggling over the price of a car with a car salesman. In this type of negotiation, the parties are less interested in forming a relationship or creating a positive impression.

A buyer negotiates with a car dealer over the price of a vehicle. The buyer wants the lowest price possible, while the dealer wants to maximize their profit. Both are dividing a fixed "pie" (the total price).

An employee negotiates for a higher salary, and the employer is unwilling or unable to offer anything beyond the fixed budget for the position. The negotiation focuses solely on the dollar amount, with no alternative options.

A job candidate negotiates not just for a higher salary but also for additional benefits, like flexible working hours, professional development opportunities, or extra vacation days. The employer agrees because these terms increase employee satisfaction without greatly increasing costs.

When planning a group vacation, each person’s preferences are considered. One person may prioritize a specific location, while another focuses on budget. The group collaborates to select a destination and accommodations that meet everyone’s priorities.

Recognizing the Three Phases of Negotiation:

• The process of negotiation includes:

  • Exchanging Information: Sharing initial positions respectfully.

  • Bargaining: The heart of the negotiation process.

  • Closing: Reaching a consensus and finalizing the agreement

Skills necessary for effective negotiating:

Effective speaking

•Effective listening

•A sense of humor

•A positive attitude

•Respect

•Self-confidence

•Emotional intelligence

•Persistence

•Patience

•Creativity

• Sarah received a job offer for a marketing role. She believed her qualifications and market research supported a higher salary than what was offered.  How did Sarah negotiate a higher salary? The case study illustrates how.

John hired a contractor to renovate his bathroom. Halfway through the project, John discovered issues with the quality of materials used and wanted to renegotiate the contract.  How does John handle the issues with the quality? Was John's attitude helpful to solving the problem? The case discusses what went wrong and what not to do in negotiating.

The Case Study illustrates the proper behavior undertaken by two department heads, Emma (Marketing) and Alex (Sales), who needed to negotiate the allocation of resources for a joint project.

• Lisa purchased a phone that stopped working after two months. The case study how the way Lisa approached the store manager for a refund was not correct.

Like any challenging task, negotiation requires preparation. Before you begin a negotiation, you need to define what you hope to get out of it, what you will settle for, and what you consider unacceptable. You also need to prepare yourself personally. The key to personal preparation is to approach the negotiation with self-confidence and a positive attitude.

In most negotiations, the parties are influenced by their assumptions about what they think are the alternatives to a negotiated agreement. Often the parties have an unrealistic idea of what these alternatives are, and they are unwilling to make concessions because they think they can do just as well without negotiating.

•WATNA (Worst Alternative to a Negotiated Agreement)

•BATNA (Best Alternative to a Negotiated Agreement)

•In any negotiation, it is important that you keep your WAP (Walk Away Price) to yourself, especially if it is significantly less than your initial offer.

•If the other party knows that you will be willing to take a lot less than you are offering, then you will be negotiating from a position of weakness.

The ZOPA (Zone Of Possible Agreement) is the area in which the final price will sit, and within that ZOPA you will ideally end up with a price closer to their WAP than yours.

•If you hint at where your WAP is, the other party will be less likely to come to an agreement that is substantially better than that.

As long as you understand your position, there is no danger that you will “lose” the negotiation. During and before negotiation you should always be:

•Polite - It never reduces your argument

•Firm - Removes Perceptions of Weakness

•Calm - Facilitates Persuasion and Compromise

•Do not take things personally

Samantha, a project manager at a tech company, has been tasked with negotiating a partnership deal with a software vendor to implement a new customer relationship management (CRM) system. This negotiation is crucial, as the vendor’s services will directly impact the company’s operations and budget.  Samatha shows us how proper and detailed preparation is necessary for a successful outcome.

Environmental factors can interfere with

negotiations, for example:

•A noisy setting

•Frequent interruptions

•Crowded conditions

•Lack of privacy

•Establishing common ground is a positive way to define the subject of a negotiation.

•Once the two parties establish what they agree on, they will have a clearer idea of where they disagree.

•The two parties use their shared interests to guide the negotiation.

•Both sides in a negotiation bring their own frame of reference based on their experience, values, and goals.

•Before starting negotiations, it is essential to agree on which issues are up for negotiation and which are non-negotiable.

•Without establishing a framework, negotiations can be extremely disorganized and lack direction.

Imagine this: Sarah, a procurement manager at a mid-sized retail company, is tasked with negotiating a supply deal with a new vendor. Eager to finalize the agreement quickly, Sarah decides to skip some of the groundwork. She sets the meeting without much thought to timing, skips a pre-discussion with her team, and assumes the vendor will bring the necessary documents.  What do you think the outcome was? let's watch the case study and see!

The first phase in a negotiation involves an exchange of information.  Both sides state their positions on the issues being addressed in a non-confrontational way. The tricky part of this phase is deciding what to reveal and what to hold back.

•Getting off on the right foot involves creating an atmosphere of respect, setting a positive tone, and projecting an image of self confidence.

•If you rush right into the negotiation without some initial pleasantries, the other party may feel that you are being pushy and aggressive.

•At the start of a negotiation, you don’t want to give a detailed statement about your position on specific issues. That is a subject for bargaining.

If the other party tries to rush you into stating your bargaining position prematurely, say something like, “That’s an important question. Before we get to that, let’s make sure we agree on the issues we’re discussing today

•You don’t want to appear secretive or deceptive, but at the same time you don’t want to give away your bargaining position prematurely.

•Your success in negotiations depends on knowing what to say, when to say it and when to be silent.

Meet John, a sales manager at a tech startup. He’s preparing for a negotiation with a corporate client who’s interested in purchasing a software package. Eager to secure the deal, John dives straight into the meeting without thoroughly considering the importance of the information exchange phase.  Follow the case study to see what happens.

Now we have reached the heart of the negotiation process. This phase — bargaining — is what most people mean when they talk about negotiation.

In addition to learning about the pressures, targets, and needs that might influence your opponents, you might also want to try to get some idea of their usual negotiating approach.

•Do they typically start out with an unreasonable offer?

•Do they try to rush the negotiation?

•Do they try to frame the issues to their own advantage?

1.Prepare, prepare, prepare.

2.Pay attention to timing.

3.Leave behind your ego.

4.Ramp up your listening skills.

5.If you don't ask, you don't get.

6.Anticipate compromise.

7.Offer and expect commitment.

8.Don't absorb their problems.

9.Stick to your principles.

10.Close with confirmation.

•If the impasse involves money, change the terms: a larger deposit, a shorter pay period, etc.

•Change a team member or the team leader.

•Agree on easy issues and save the more difficult issues for later.

•Change the list of options being considered.

•Agree to adjourn for a fixed period of time to try to come up with other options.

A mid-sized IT company, TechNova, is negotiating a partnership with a global software provider, GlobalSoft, to co-develop a new software platform. TechNova has a budget constraint and wants to secure the best possible deal while ensuring a long-term, mutually beneficial relationship.  Let's watch howthey did it.

•Positional Bargaining: Soft

oParticipants want to be friends

oThe goal is agreement

•Positional Bargaining: Hard

oParticipants are adversaries

oThe goal is victory

•Interest Bargaining

oParticipants are problem solvers

oParticipants invent options for mutual gain

•The key to making the mutual gain approach work is to focus on interests, not positions.

•The answer in most situations may be a compromise.

•This allows both parties to get something of what they want, without either side having to give up too much.

•Brainstorming to “expand the pie” by coming up with a range of options

•Identifying shared values to help create options that will meet the interests of both parties

•Changing the scope of the negotiation — making it larger or smaller

•Identifying issues that can be set aside for future negotiations

To begin, identify what you personally want out of the negotiation. Try to state this positively. Examples:

•I want a fair share of all new customers.

•I want a better working relationship with my manager.

•I want changes to the schedule.

These framing questions will help you start the process.

•What does my opponent need?

•What does my opponent want?

•What is most important to them?

•What is least important to them?

•Now that you have identified the wants and needs of both sides, look for areas of overlap. These will be the starting points for establishing mutual ground.

•When working through the wants and needs of both parties, be careful not to jump to conclusions. Rather, be on the lookout for the root cause. Often, the problem is not what it seems.

Martha and James are department managers at a growing tech company. With office space limited, they must share a single large conference room as a workspace for their respective teams. Martha’s team focuses on client meetings and presentations, requiring a quiet, professional atmosphere. James’ team works on collaborative product development, often engaging in brainstorming sessions that can get loud.  Their initial attempts to come to an agreement failed.  The case study illustrates how they turned their failure into a win-win for both.

The final phase of a negotiation is a time for reaching consensus and building an agreement. A little hard work in this phase can ensure that the negotiation achieves it desired results.

•Have I reached an agreement that comes as close as possible to fulfilling my interest(s)?

• Will other parties to the agreement fulfill their commitment? Do we have a good process for measuring and monitoring fulfillment by the parties?

•Do I feel satisfied by the substance of the agreement and the process by which it was reached?

•Would the other party/parties give the same answers to these questions?

•Building an agreement takes a special skill — the ability to translate generalities into specifics.

•Negotiators should realize that at this stage of the process the bargaining is over. They should try to create an agreement based on a fair and accurate interpretation of the consensus the parties have reached.

John, a first-time homebuyer, is negotiating with Sarah, a real estate agent representing the seller, for a suburban house priced at $300,000. John loves the property but has financial constraints. The seller, however, is motivated to close quickly due to a job relocation.  After weeks of discussion, they reach the closing phase of the negotiation.  Let's watch how they closed the deal.

Most people are willing to negotiate in good faith. They don’t resort to tricks or intimidation. Every once in a while, though, you might encounter someone who takes a less principled approach.

•Using environmental tactics to gain an advantage in a negotiation doesn’t happen that often, but negotiators need to be prepared for it.

•One obvious case is the executive who refuses to come out from behind his desk and forces the other side to sit in visitors’ chairs. If this should happen, the best response might be, “I’m sorry, but I need some space to spread out my notes. Is there a conference room available?”

There are a number of reasons why negotiators sometimes engage in personal attacks:

•They may think that this type of behavior will give them an advantage in the negotiation.

•They may see any disagreement with their position as a threat to their self-image.

•They may feel that they are not being treated fairly or respectfully.

•Recognizing and controlling emotions is an aspect of “emotional intelligence.”

•In a negotiation, emotional intelligence involves recognizing how you and the other party are responding emotionally to the discussion.

•You will recognize when the emotional temperature is rising beyond where it should be, because discussions will become less focused, voices will be raised and the silences will be all the more silent.

It’s time to walk away from a negotiation if:

•The other party makes you feel threatened or extremely uncomfortable.

•The other party uses unfair tactics that make it impossible to have an equitable negotiation.

Two departments at a tech company, Software Development and Quality Assurance (QA), are being merged into a single team to streamline processes. However, tension arises when deciding on leadership. Both department heads, Alice (Software Development) and Ben (QA), believe they are best suited to lead the combined team. The CEO appoints Clara, the HR manager, to mediate the negotiation. How did Clara succeed? The Case study illustrates.

Liam, a procurement manager for a manufacturing company, is negotiating with Maya, the sales representative for a key supplier, regarding a contract for raw materials. The supplier recently increased their prices by 15%, citing rising operational costs. Liam’s company cannot absorb the increase without impacting their bottom line. The negotiation has reached a boiling point, with both parties feeling frustrated and defensive.

Background: The Johnson siblings—Mark, Sarah, and Rachel—are faced with a difficult family issue. Their mother, who recently suffered a stroke, needs increased care and support. The siblings disagree on how to handle her care, creating tension and unresolved conflict during family discussions.

• Mark’s Position: "We should move Mom into an assisted living facility so she can get professional care."

• Sarah’s Position: "Mom would hate leaving her home. I’m willing to take care of her myself, but I’ll need financial help."

• Rachel’s Position: "We need a professional caregiver to come to her home so she’s comfortable and safe."

The arguments have become personal, with each sibling accusing the others of not doing enough.

Negotiating isn’t just something that takes place in conference rooms with powerful forces aligned on either side of a table. People have informal negotiations every day — with their coworkers, merchants, even family members.

•Separate the people from the problem. Don’t let personalities get in the way of negotiating.

•Focus on interests, not positions. Consider what both parties want and need.

•Expand the range of options. One way to overcome an impasse in a negotiation is to expand the range of the discussion.

•State the terms of an agreement in specific, clear terms.

•Pay attention to particular points.

•Listen Actively. Don't interrupt the other party; don't spend your 'listening time' figuring out how you're going to respond to them when they finally stop talking. The better you listen, the better you can learn, and the more likely you will be able to respond in a way that improves the negotiation's result.

•Don't let the immediacy of a telephone call force you into fast, unwise decisions. There is nothing wrong with requesting more time to think about the terms discussed.

It is appropriate to use email in a negotiation:

•When the topic is clearly defined.

•When the topic does not require extensive discussion

•When the expected response is relatively simple

•When there is little possibility of misunderstanding

It is not appropriate to use email:

•When the topic is complex

•When the topic requires extensive discussion

•When the topic has great personal significance for the parties involved

•When the topic is likely to stir up strong emotions

Chris and Jamie are next-door neighbors in a suburban neighborhood. Over the past year, Chris has become frustrated by Jamie’s overgrown trees, which have started to drop branches and leaves into Chris’s yard. Chris wants Jamie to trim the trees but is unsure how to bring it up without causing tension. This is a classic informal negotiation scenario. Let's see what challenges Chris and Jamie face and how they solve them.