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Professor Cracks the Code to Negotiating a Bigger Salary

Interesting article. Check it out.


Professor Cracks the Code to Negotiating a Bigger Salary

By: Paul Kix AOL News

(Sept. 19) — A forthcoming study lays all out all you need to know about haggling for a better salary: the five tactics people most often use; what works; what doesn’t. Given how meh the economy’s been, it’s probably the most useful academic research you’ll read in some time (next to, of course, this).

“We wanted to open up the black box of the negotiating process, if you will,” Crystal Harold, an assistant professor at Temple’s Fox School of Business, and co-author of the study, tells AOL News.

She succeeded.

Temple’s first point: It’s all right to negotiate. “Avoiding the negotiation,” Harold says, “left people feeling terrible.”

She says that “risk-averse” types often do this — just accept whatever terms the employer offers. That’s a bad strategy. You’ll come to hate the organization, thinking it doesn’t value you yet doing nothing to change its perception of you.

Some of the 149 people Harold and her colleague Michelle Marks polled for the study were academic types, where the risk-averse personality reigns. The universities had to “almost prompt” the academics into negotiating, Harold says, because they didn’t want soured future employees. So Harold says some university administrators showed their hand, basically letting potential academics know they were getting low-balled. (“No, that doesn’t happen in corporate America,” Harold says.)

Point No. 2: Being aggressive is the best way to get the most money. Harold likes to call this the “competitive” strategy, but that’s really just another way to say, “I have a better offer from another firm, can you match it?” Or “If you don’t pay me more money, I’ll go public with your office-hours porn habit.” (Actually, no: The latter wasn’t a tactic Harold studied.)

“The competitive strategy did lead to more money,” she says — on average, about $5,000 more. And every dollar counts. The study points out that a 25-year-old who starts at $50,000 and gets a 5 percent pay increase each year for 40 years will earn a whopping $634,198 less than a 25-year-old who starts at $55,000 a year.


Point No. 3: The competitive strategy does carry risks, especially if taken too far. Anecdotally, Harold heard from employers who acquiesced to the burn-it-all negotiating tactics of their most “competitive” employees. The employers really resented these people. When they started working, maybe the boss didn’t cut them any slack or assist them with a difficult assignment. And so the employee came to resent the place anyway.

A better tact may be “collaboration,” Harold says. Tell the boss your demands, but acknowledge that times are tough and that perhaps not all the demands can be met. This is a true negotiation and, Harold says, “probably the best tactic.”


Written by David Frederick

September 21, 2010 at 9:12 AM

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