Effective negotiating


Think for a moment about the last few jobs you’ve had, and the job interviews that got you there. Did you get the salary you wanted? What about vacation time, flex time, a company parking spot and other benefits? Chances are you walked away with less than what you wanted.

You’re certainly not alone. Negotiating is a skill that eludes many of us, for many different reasons — and the result is that we often lose out at the bargaining table.

Three myths

Kevin Tasa, assistant professor of organizational behaviour at McMaster University’s DeGroote School of Business, says becoming an effective deal maker starts with understanding the three biggest negotiating myths:

– Good negotiators are born.

– Experience is a great teacher.

– Good negotiators take risks or they are tough and hard-nosed.

“None of us are innately good negotiators. It’s a skill set, and the way to learn that skill set is through training,” Tasa says. “Experience is not a great teacher, because most situations are quite different. My experience of buying a car might give me an experience, but does that experience help me when I want to purchase a house?”

As for the last point, Tasa emphasizes the difference between being aggressive and being firm, and the benefits of the latter.

“Aggressiveness is using tactics that are competitive and not listening to the other party when they’re trying to find alternative options. Firmness is sticking to your goals and interests.”

Settling for too little is one of the most common mistakes we make when negotiating, Tasa says.

“A lot of us are uncomfortable with negotiation — we think of it as being confrontational — so we hasten to reach a quick agreement,” he says. “However, we’re often not happy with the terms that were reached when we evaluate them afterwards.”

To master the art and skill of negotiating, and how we can use it to advance our careers, we first need to understand the two main types of negotiating scenarios. Distributive situations revolve around one issue, while integrative situations are multi-issue.

“The reality is that most negotiation situations are not the distributive, win-or-lose type, but ones where both parties leave better off and it’s possible to create value,” he says.

Creating integrative situations where you have as many issues as possible to negotiate is ideal, Tasa says. The more bargaining chips there are on the table, the more room both parties have to manoeuvre and create the best mutually satisfying deal.

At the crux of effective negotiating, Tasa says, is having a good idea of your best alternative to a negotiated agreement, or BATNA, for short; for example, if you’re about to negotiate for a new job, have in mind all your alternatives should the deal not meet your criteria, such as a job opportunity at another company, staying at your current job, switching careers entirely, etc.

“The better your plan B, the more confident you’ll be and the greater chance that you’ll get a reasonable deal,” Tasa says.

Another key consideration to determine before the job interview is your bottom line — what Tasa refers to as your reservation price. This is the point at which you are indifferent to whether an agreement has been reached and you’re ready to walk away.

“Think about the package as a whole — the salary, holiday time, the possibility of telecommuting, etc., and your minimum threshold for all of these items combined,” Tasa says.

Whatever you do, Tasa says, don’t reveal your reservation price to the other party — this can lead them to push for a deal that’s only marginally better than your minimum threshold.

In the end, he says, remember that a key aspect of negotiating is relationship building; if you’re too aggressive in your tactics, you may broker the deal you want, but you may also alienate a contact whom you may have to deal with again in the future.

“You can’t lose sight of the fact that relationships are ongoing, and in most business situations, we have ongoing relationships with clients, customers and so on,” Tasa says. “So be firm, but be open to considering other options.”

Reaching a mutually beneficial deal

Integrative negotiating situations with multiple issues at stake are ideal, because they afford more flexibility to both parties and make it easier to reach a mutually beneficial deal, says Kevin Tasa, assistant professor of organizational behaviour at McMaster University’s DeGroote School of Business. To promote integrative negotiations, Tasa advises to:

– Be co-operative and seek out information.

– Use the negotiations to collect information about integrative possibilities.

– Build trust and share integrative information.

– Ask questions.

– Make a proposal incorporating all issues.

– Ask what is wrong with your proposal. Ask for a proposal in response.

– Make multiple equivalent proposals.

– Be firm on interests, but open to options.