Over the last three months, an average of 20,000 Americans have lost their job each day. In these times, if you are lucky enough to get a job offer, shouldn’t you just take what you are offered?

Absolutely not!  Even in tough times, most companies expect you to negotiate.  They won’t show their eagerness to negotiate.  After all, they are hoping that you will accept their first offer.  You need to watch for subtle signals that hiring managers are open to negotiation.  For example, many managers may say “why don’t you look over the offer and call me if you have any questions”.  This is an invitation to negotiate.  It is acceptable to ask the manager whether parts of the contract are negotiable.  They may not give a resounding “yes” but will ask you what you had in mind (another invitation) or state what isn’t negotiable “we don’t negotiate salary”.

Especially in hard times, negotiating non-salary compensation is a great way to increase the value of a compensation package.  Some items that employers may be particularly amenable to negotiating in tough times include:

• Vacation, sick days, personal days
• Maternity / family leave
• Flex-time
• Professional training
• Job sharing
• Start date
• Frequent flier miles
• Stock options
• Performance bonuses
• Accelerated review time with potential salary increase
• Job duties

The most important thing you can do prior to negotiating any part of your offered compensation package is research.  What you earned in your last job may no longer be relevant during a recession.  Visit salary.com to see how your offer compares with others in similar industries / positions.  Call competitor companies and ask about their salary structures and ranges.  Talk to friends and friends of friends.  Try to get a sense of how many people were vying for the position you are being offered.  Uncover what other recent offers have been made in similar industries / positions.  Knowing what you should realistically aim for is the most important starting point of any negotiation.

Some other resources on Negotiating in tough times:

• 7 Tips for Negotiating Your Salary in a Troubled Economy (PayScale for Yahoo)
• How to Handle Salary Requirements When Applying for a Job (The Salary Reporter)
• Does Your Salary History Really Matter to a Future Employer? (The Salary Reporter)

To learn more, we invite you to attend our two day UC Berkeley Center for Executive Education Negotiation program

I have several consultant friends who are continuing to hold out for the same amount of money they made a year ago, in better economic times.  They are mostly unemployed.  Unless they have more savings than I know about, they have committed perhaps the largest negotiating sin—lack of research.  Research shows that you can achieve the best negotiation outcomes by spending 5x longer preparing for a negotiation than you will actually spend in a negotiation.  My friends have not done their research.  If they had, they would know that consultant pay is plummeting and they have more competition than ever over for their services.  Other major sins of negotiating include: 

• Leaving money on the table
• Walking away from the table when there is a good offer
• Settling for terms that are worse than walking away 

An interesting data point on this last sin: 97% of students in my classes don’t recognize when the best deal is no deal.  After working hard through a negotiation, they don’t want to “fail” to reach one.  They have expended time and effort and want this to be worth something.  It may help to remember that the other side has incurred these same “sunk costs”. 

Who should make the first offer?

Who should put the first offer on the table in a negotiation?  You, or the other side?  In my UC Berkeley Executive Education Negotiation class, generally about 80% of participants say “the other side should”.  This is a common misperception.

The opening offer creates the focal point or the “anchor” around which discussion takes place.  Research in the field of negotiations shows that the outcome of the negotiation will tend to settle around that initial anchor.

Why do most people like to have the other side open first?  Usually because they want to know what the other side is thinking and adjust around that offer.  However, adjusting one’s offer based on what the other party has said, gives away power.  The burden of adjusting away from the initial anchor also now sits squarely on the shoulders of the recipient of the offer—a challenging task.  Some hope that the other side will make a too good to be true offer—but how often does that occur?  Less than 1% of the time?  Does it then make sense to give away power 99% of the time?

A skilled negotiator will always prepare thoroughly before starting a negotiation in order to set the initial anchor.  In many industries, especially high tech, there is uncertainty around what a service/product should be valued at.  As a result, there is a feeling that the first person to make an offer loses.  This is not true.  The other side has no idea what the value should be either.  Thus, the person who makes the initial offer sets expectations and will have power over the negotiated outcome.  The only exception to this guideline is in salary negotiations– where it is often better to have the other side make the first offer.  We will discuss this in more detail in an upcoming blog.

In upcoming posts we will also discuss when to make an offer, how to make your first offer (package multiple items!), and what to do about extreme offers.

Language and Emotions in Negotiations

Have you ever told someone in a negotiation that you thought they were being unfair?  My research (with Jon Bain-Chekal and David Caldwell) has shown that the words and phrases we choose to use during a negotiation interaction can trigger an emotional reaction in the other party, which can negatively impact the relationship and the outcome of the interaction.   The emotions most likely to be evoked were anger and frustration.  We were not able to find any words that evoked positive emotions.  Of the different types of words and phrases we identified, those that labeled the other party negatively or told the other party what he or she should do, triggered the greatest anger and frustration.  

It is important to recognize the words we use that can trigger these negative emotions in the other party and try to avoid using them.  The following is a list of some of the more common words and phrases that negotiators use that may have a negative impact on the interaction:

“Yes, but…”
“In all due respect…”
“I’m trying to make you understand”
 “Honestly”
“Obviously”
“You should…”
“This is how we have always done it”
“I’m being reasonable”
“This is a good deal”

Holly Schroth, Senior Lecturer, Haas School of Business, UC Berkeley
Check out our intensive two day Negotiations class at UC Berkeley: www.galimagroup.com/negotiations

Desperate times call for desperate measures. Or do they? Many feel that in order to get an “edge” in negotiation, they need to resort to the use of gambits. Gambits are essentially negotiating tricks that help the negotiator gain value in the short term but damage the long-term relationship and the opportunity to achieve future gains. I do not advocate ever using gambits. However, it is inevitable that you will encounter people who use gambits. As a result it is very important for you to be able to recognize and counter them. Below are some gambits and suggested countermeasures.

Negotiation Gambits:

Hello and welcome back to our Negotiations blog where we share with you strategies to make you a great negotiator.

In our last post, we talked about ways to handle anger when it is real vs. when it is feigned. But how can you tell? There are a few contextual cues and methods that negotiators may use to help determine whether the anger they are receiving is genuine or tactical.

1. Reputation of the negotiator. Is this a person who commonly uses anger as an intimidation or power tactic? The prudent negotiator will research the other party prior to negotiating to anticipate the attitudes and behaviors that the party may use at the negotiation table. A good negotiator spends five times longer preparing a negotiation than actually negotiating.

2. Type (deal-making vs. a dispute) and stage of the negotiation. Negotiators approach deal-making with optimism. On the other hand, negotiators are likely to approach dispute resolution with pessimism. Genuine anger, then, may occur in the very early stages of dispute resolution negotiations because face has been lost due to the rejection of the claim. In deal making negotiations, genuine anger may emerge in the middle or latter stages of the negotiation as a reaction to emerging conflict or disillusionment over the other party’s behavior.

3. Test the other side. Another way to determine whether anger is genuine or tactical is to test it. Genuine anger should subside when venting is allowed, when breaks are taken, or when the concerns of the angry negotiator are acknowledged. Negotiators using tactical anger to influence the other party to make concessions may continue the emotional assault regardless of these events. Tactical anger cannot be thwarted until the perpetrators recognize that their anger is not generating concessions and their strategy needs to be adjusted.

To review different strategies for dealing with tactical vs. genuine anger, check out our first blog post.

To become an expert negotiator, join our upcoming Negotiations workshops with Holly Schroth:

* November 20, 21, 2008 at UC Berkeley
* January 12, 13, 2008 in San Francisco

NOTE: Excerpt from “Some Like It Hot: Teaching Strategies for Managing Tactical versus Genuine Anger in Negotiations” by: Holly A. Schroth. The full article with citations will be published in Negotiations and Conflict Management Research

Hello and welcome to the new Negotiations blog brought to you by the Center for Executive Education at UC Berkeley.  In this blog, we will be sharing with you strategies to make you a better negotiator.  

In negotiations, anger may be genuine or it may be tactical—feigned for the purpose of gaining leverage or to intimidate the other side for immediate advantage.  Recipients of anger should respond differently depending on whether the anger is genuine or tactical (stay tuned next week for how to determine the difference).  Having the right response will determine your success in a negotiation.

The four approaches below are strategies that recipients may use to manage an anger attack.  Although all four may work in either tactical or genuine anger situations, the first two, labeling the anger and matching and de-escalating are particularly useful when the anger is tactical.  The second two, controlling the process and building a relationship, are particularly useful when the anger is genuine.

·         Labeling Anger.  The credibility and power of the instigator will be lost if the anger is identified as a tactic of intimidation and the “angry” negotiator is called out on the tactic. 

·         Matching with Firmness and De-escalating.   To equalize power with the perpetrator, it is important to match the power of the expressed anger (e.g., using intensity of tone of voice or posture), before engaging in a de-escalatory move to continue progress in the negotiation.  Responding in a manner that shows that you, the recipient of the anger attack, can be just as powerful or angry without being genuinely angry. 

·         Control the Process (Strategic Breaks).  Calling for a break can disrupt the negative intensity and agenda of the negotiator who uses anger as a tactic.  The break also allows the recipient of the anger to regain mental balance and plan a strategic response given the information collected from the angry outburst. 

·         Communicate and Build a Relationship.  When a negotiator feels genuinely attacked it is important not to yield to the natural reaction of striking back, giving in, or walking away.  None of these natural reactions will help to resolve the conflict.  Instead, the negotiator can refocus the angry party on interests by demonstrating an understanding of their concerns without agreeing with their arguments. 

Excerpt from:

“Some Like It Hot: Teaching Strategies for Managing Tactical versus Genuine Anger in Negotiations” by: Holly A. Schroth (The full article with citations will be published in Negotiations and Conflict Management Research)

 **Stay tuned for our next post on how to tell if anger is genuine or tactical**