Salary Negotiation: A Role-Play Exercise to Prepare for Salary

Negotiation
Abstract:
Although most employers report room for negotiation in their job offers to recent
graduates, fewer than half of recent graduates report attempting to negotiate. Considering
that every raise employees receive throughout their career will be a percentage of their salary
at the time, failure of new employees to maximize starting salary through negotiation is a
serious omission. Developing business students’ negotiation skills should be an objective
incorporated into business curricula allowing students to succeed in their job offer
negotiations. The role-play exercise herein is designed to provide business students a
foundation in basic negotiation through a scenario that boosts student interest and
engagement and allow quick applicability in their professional lives. The exercise is designed
for use in courses that focus on negotiation, management, or business communication, but it
is adaptable for nearly any upper level business course.

Objectives:
1. Understanding the basic principles, theory, and practice of ethical professional
negotiation.
2. Analyzing and adapting negotiations based on new information revealed by other
negotiators during negotiations.
3. Differentiating between effective negotiation techniques to support negotiation strategy.
4. Critically listening to and evaluating business negotiation arguments.
5. Maintaining goodwill with the opposing party while simultaneously working to achieve
their independent objectives.
 Essential Terms of Negotiation
Best alternative to a negotiated agreement (BATNA): BATNA represents the option
that one exercises if the negotiation breaks down. It is, in short, the back-up plan for the
negotiator that would be taken in the event that the negotiation does not go well. It should
be noted that, most often, the BATNA is not a monetary amount. Rather, it is an option of
what one will do in the event that the reservation point (RP) is not achieved.
Distributive approach. The distributive approach focuses on dividing the available
resources in a manner that best suits the negotiator with little or no consideration of the
needs of the opponent. This approach is typically highly competitive and characterized by a
“win-lose” mindset. Negotiators using this approach are striving to maximize their own
returns while minimizing the gains of competitors. For example, if you and other
department managers were negotiating for a portion of the professional development
money pool, you would likely use a distributive approach because if your department were
to receive more of the available money, another department would necessarily receive less
because the amount in the money pool is finite.
Integrative approach. The integrative approach seeks out agreements that are
mutually beneficial to all parties. This approach is typically more collaborative and is
characterized by a “win-win” mindset. The negotiator using this approach is striving to
develop an agreement that maximizes the gains of all participants. For example, if your
team is planning to host a client at the office on the same day as another team is planning to
host a client, you might negotiate with the other team’s leader using the integrative
approach to develop a schedule for each team that shares office resources (meeting rooms,
food catering, presentation tools, etc.) and accommodates each other’s needs throughout the
day.
Reservation point (RP). The RP is the break-off point for negotiations, that is, the
time when the negotiator will exit the negotiation without an agreement. The RP is, in the
mind of the negotiator, the worst-case scenario for the negotiated outcome. It should be
noted here that the RP is a very firm position set during the pre-negotiation planning phase
and is completely immune to the influx of new information presented by negotiators during
the negotiation itself.
Target point (TP). The TP is the aspirational point set by a negotiator during
preplanning. The TP is, in the mind of the negotiator, the best-case scenario that he/she
hopes to achieve during the negotiation process. A key criteria for setting this point is that
the TP must be aggressive but realistic. Setting an appropriate TP results from assessment
of the scenario faced and proper outside research.
 Pre-Negotiation Plan Template

Name: ______________________________
Date: ___________
Role-Play Position: ____________________________________________________
Summary of Negotiation
1. Who are the participants in the negotiation?
2. What is the situation?
3. What is the reason for the negotiation?
Issues
1. What are the issues for you in this situation?
2. What might the issues be for the other party(s)?
Strategy 1. What is your BATNA(s) and why?
2. What is your Target Point and why?
3. What is your Reservation Point and why?
Goals (Content, Relational, Identity, Process)
1. What are your goals?
2. What are the goals for the other party(s)?
Problems and Planning
1. What potential problems and roadblocks can you envision?
2. What are your plans to deal to with any roadblocks?