04 Salary Negotiation UG NF r7 pt1

NEGOTIATING A JOB OFFER
Prof. Stephen W. Nason

Professor of Business Practice
© Prof Stephen W. Nason – All Rights Reserved

Negotiation Outline: Where are We Going?
Negotiation
Fundamentals Processes Contexts Remedies
Nature of Perception Salary Negotiation

Negotiation & Biases Negotiations Envelope
Distributive Email
Negotiating Style Video Analysis
Negotiations Negotiations
Integrative Hard Ball Tactics Disputes Persuasion

Negotiations
International Auctions Best Practices
Strategy
Negotiations
& Tactics
Difficult Groups Conclusion
Negotiations
Bus./Gov. Coalitions &
Negotiations Multiple Parties
© Prof Stephen W. Nason – All Rights Reserved 2
What is Different About Employment/ Salary
Negotiations?
Fear! Very stressful
 Important
 Long term implications
– Salary increase affects you every month for the rest of your life!
 People equate salary with “self worth”
– Makes negotiations very emotional
 Consequences of bad feeling even more severe
Negotiating a Job Offer

Common emotions in negotiations
Anxiety
– Most likely felt before the negotiation begins and in early phase of the
negotiation
Anger
– Most likely in the heat of the discussion
Disappointment
– Most likely in the aftermath
Happiness/excitement

Anxiety
When experiencing anxiety in negotiations people

 Make weaker first offers
 Respond to offers quicker with less thought
 More likely to accept poor offers
 More likely to exit the negotiation early
 Less confident
Conclusion:
Anxious negotiators end up with worse outcomes?

Anxiety, Confidence, and Advice
When experiencing anxiety in negotiations people

 Less confident so more likely to seek advice
 This can be good, but …
Who do anxious people go to for advice
 More likely to accept advice from poor sources
– Friend of family member that may not have expertise
– Memories of negotiations on TV/movies
– Counterpart in the negotiation
• When negotiating for a job who is your counterpart?
 Less likely to discount poor advice
– Particularly from someone with a conflict of interest
Do tricky negotiators often make their counterpart feel nervous on purpose?

How can we minimize anxiety
1. Preparation!
– The more comfortable you are with the details the less anxious
2. Anxiety is a response to novel situations
– The more experience negotiating the less anxiety
– Like this class!
3. Negotiate in a comfortable setting
4. Have a support crew
5. Bring in an outside expert, agent
– Pretend that you are the outside expert negotiating for someone else

How Should You Behave in a Salary Negotiation?
 Conciliatory and demonstrate that you want the job?

 Forceful and proactive?

Is a Salary Offer Negotiable?
In General (US and Europe)

 80+% Recruiters willing to negotiate over pay and benefits
 81% Applicants do not even attempt to negotiate

Is a Salary Offer Negotiable in Asia?
In Hong Kong
 75% Recruiters willing to consider negotiating over pay and benefits
 90% Applicants do not even attempt to negotiate
In PRC at MNCs
 95% Recruiters willing to negotiate over pay and benefits

How Will You be Perceived if You Do Not Try to
Negotiate?
Recruiter may think you are:
 Not active
 Not a “go-getter”
 Too passive
 Do not value yourself
 Are desperate

Skills Recruiters Look For in Candidates
Recruiters in HK want people who:

 Are creative problems solvers
 Can think on their feet and
 Can present ideas convincingly
Demonstrate these qualities
 In your interviews and
 When negotiating your job offer

What Are the Risks of Negotiating Over Salary?
1. Recruiter has all the power

– People do not negotiate because they undervalue their skills and worth
2. Afraid will look greedy
– But firms expect negotiation and leave room for it
• by not trying you just look desperate and passive
– If prepare, have good info about what you are worth, and ask for it,
• you just look competent!
3. Afraid lose an offer
– Losing an offer due to negotiating is extremely rare
– Only occurs when negotiate completely inappropriately

What if You Try to Negotiate and the Recruiter
Says No?
 Don’t immediately give up
 Explore options
 Do not keep trying to negotiate more than 2 or 3 times
 Accept graciously

Your Results!
© Prof Stephen W. Nason – All Rights Reserved

What Are Your First Three Steps When
Negotiating Over a Job Offer?
Preparation, Preparation, Preparation!
Preparation I: First Steps
 Figure out what you really want
– Consider more than just high pay
 Determine your BATNA
 Clearly calculate your reservation point
 Don’t forget your target
 Research the employer, particularly their BATNA
– Do your homework

Preparation I: What do you want?
Develop a clear idea of all your issues.
Determine the issue mix
 List all your issues (interests)
– Rank each issue on its importance to you
Identify your BATNA
 Compare your issues to your BATNA
Determine your Bottom Line

What is Hayden’s Bottom Line?
 $60,000
– SF job
 $70,000?
– Friends say accept it
 $50,000 – 55,000
– Industry average
 $70,000?
– Industry max

How to Determine the Reservation Point?
BATNA, Job in SF
 $60,000
 No fiancée
 3 month summer vacation
 Poor vacation
 No moving expenses
 Stock Options
 Not your ideal job
How much is this worth?

Candidate’s (Hayden’s) Reservation Point:
BATNA = Job in SF
San Francisco NY comparison
 Salary $60,000  $60,000
 No fiancée  - $5,000?
 Consulting not Marketing  - $5,000
 3 mo trip before start  No trip
– Cost - $1,000
– Fun + $3,000
 Poor annual vacation  - $2,000
 No moving expenses  + $2,000
 Good Boss  - $5,000
 No Stock Options  +$3,000
 = $50,000
Is 50,000 a legitimate number?

Boss’ (Riley) Reservation Point:
BATNA = Current Intern
Hayden Intern
 $56,000 = Intern’s Salary  $56,000
 Uncertain performance (not intern)  - $4,000?
 Little industry experience  -$4,000
 Find employee fast  - $2,000
 No sabbatical  - $10,000
 Dynamic personality  +$4,000
 Fit with company  +$4,000
 = $44,000
Is 44,000 a legitimate number?

Salary Exercise: A Possible Bargaining Zone
Boss Boss
Initial Offer $44,000
Candidate Candidate
$50,000 Initial offer
No Bargaining Zone

Preparation II: After the RP?
Determine the issue mix

 List all your issues (interests)
– Rank each issue on its importance to you
Identify your BATNA
 Compare your issues to your BATNA
Determine your Bottom Line
Prepare for Trades

 List all your opponents issues (interests)
– Rank each issue on its importance to your opponent
 Start thinking about possible trades
What Issues Should You Consider For
Any Job Negotiation?
Anything That Is Important To You
 Salary  Direct supervisor
 Start Bonus  Number of subordinates
 Other pay  Assistant
 Stock Options  Job assignment/rotations
 Retirement  Flextime
 Training/Education
 Saving plan
 Insurance (auto, home, life, work)
 Pension Plan
 Maternity/Paternity leave
 Rapid Review
 Child Considerations (schooling)
 Vacations
 Pet Considerations
 Conferences
Stephanie & Ellie

04 Salary Negotiation UG NF r7 pt1

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NEGOTIATING A JOB OFFER

Prof. Stephen W. Nason

© Prof Stephen W. Nason – All Rights Reserved

Fundamentals Processes Contexts Remedies

Nature of Perception Salary Negotiation

Integrative Hard Ball Tactics Disputes Persuasion

Negotiating a Job Offer

Negotiating a Job Offer

When experiencing anxiety in negotiations people

Anxious negotiators end up with worse outcomes?

Negotiating a Job Offer

When experiencing anxiety in negotiations people

Negotiating a Job Offer

Negotiating a Job Offer

 Conciliatory and demonstrate that you want the job?

Negotiating a Job Offer

In General (US and Europe)

Negotiating a Job Offer

Negotiating a Job Offer

Negotiating a Job Offer

Recruiters in HK want people who:

Negotiating a Job Offer

1. Recruiter has all the power

Negotiating a Job Offer

Negotiating a Job Offer

© Prof Stephen W. Nason – All Rights Reserved

Negotiating a Job Offer

Negotiating a Job Offer

Negotiating a Job Offer

How much is this worth?

Negotiating a Job Offer

Is 50,000 a legitimate number?

Is 44,000 a legitimate number?

Negotiating a Job Offer

Negotiating a Job Offer

Determine the issue mix

Prepare for Trades

 Stock Options  Job assignment/rotations

© Prof Stephen W. Nason – All Rights Reserved 25

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