Tag Archives: negotiation

Have You Agreed to Every Bad Deal You’ve Gotten?

Facebook COO Sheryl Sandberg wasn’t inclined to negotiate her proposed salary until she was emphatically urged by her late husband and brother-in-law.

Accenture

Accenture

In contrast, most respondents to Accenture’s 2016 online survey of 4,100 business executive women and men across 33 countries said they had asked for a pay increase.

Almost as many women as men asked for more salary, and the number of women who negotiated increased by 10% from earlier surveys.
These negotiation efforts were effective: Four out of five respondents who negotiated said they received a pay increase, confirming the mantra “Just Ask” while being prepared for “No.”

Linda Babcock

Linda Babcock

This result is more encouraging than Linda Babcock’s earlier finding that women tend not to ask for raises, and are less likely to receive salary increases when they do ask.

The Accenture study also found that nearly half of women and men respondents reported asking for a promotion to greater job responsibility, suggesting willingness to advocate for themselves to achieve monetary rewards.

Emily Amanatullah

Emily Amanatullah

Gender differences in negotiations reflect women’s “contextually contingent impression management strategies,argued University of Texas’s Emily Amanatullah and Michael Morris of Columbia University.
Translated, this means that women’s assertive bargaining behavior is judged as congruent with female gender roles in some contexts.

As a result, many women consider this “contextual variation” and potential “backlash” against perceived incongruity when negotiating.
They adjust bargaining behavior to manage social impressions in contexts where assertive bargaining behavior is seen as incongruent with female gender roles.

Michael Morris

Michael Morris

Women who advocated for themselves reduced assertive behaviors and competing tactics, resulting in poorer negotiation outcomes.
In contrast, women advocated for others achieved better outcomes because they did not reduce assertive behaviors or engage in “hedging.”

Margaret Neale

Margaret Neale

Negotiation is interdependent process – every bad deal you’ve gotten, you’ve agreed to,” argued Margaret Neale of Stanford Graduate School of Business.
If true, this outcome can be counteracted by adopting a mindset that “everything is negotiable.

Her empirical research informed her recommended structure to achieve more effective negotiation outcomes, summarized by the acronym APAP:

–          What are the Alternatives or fall-backs to negotiating?

–          What are the Aspirational goals for the best possible outcomes?

-How realistic are these goals?
-What’s the “walk-away bottom line“?

–          Assess: How much influence do you have?
– How might the benefits of negotiating outweigh the costs?

–          Prepare: What are your interests (not positions, or proposed outcome)?
– What are the other person’s interests?

–          Ask: Propose a solution that packages issues with benefits to the other, the group, and you
Share information.

–          Package:  Avoid issue-by-issue negotiation by trading among issues.
Use If-then statements for counter-proposals,
Bundle alternative proposals.

Deborah Kolb

Deborah Kolb

An alternate model of three types of negotiation maneuvers was proposed by Simmons College’s Deborah Kolb and Carol Frohlinger of Negotiating Women, Inc.:

Power Moves attract others to participate in negotiation discussions:

  • Offer incentives,
  • Raise the cost of not negotiating,
  • Enlist support.

      Process Moves structure the negotiation interaction:

  • Take control of the agenda,
  • Seed ideas.

    Appreciative Moves
     enable the negotiation conversation to continue:
  • Solicit new perspectives,
  • Enable the conversation to continue,
  • Help others “save face.
Carol Frohlinger

Carol Frohlinger

Kolb and Frohlinger advocated:

-Skill building (including mutual inquiry to co-construct solutions to replace traditional Distributive Exchange and Integrative Exchange models),

-Organizational development to overcome structural barriers to women’s advancement.
These interventions may also reduce unconscious bias that excludes women from developmental assignments and advancement.

A counterpoint argument is that women can control their self-development, but they have less control over their organization’s willingness to transform its culture, practices, and awareness of bias.

-*How likely are you to ask for a salary increase or promotion?

-*What factors do you consider before making a request for more money or an expanded role?

-*What is the best negotiation pitch you’ve heard for a job-related salary increase or role promotion?

-*How did the person overcome objections?

-*How did the person manage the relationship with the negotiating partner?

-*How do you ask for what you want at work?

-*What power tactics do you employ to influence your negotiation outcomes?

-*How do you prepare for negotiations and overcome objections during negotiations?

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Women Balance on the Negotiation Tightrope to Avoid Backlash

Linda Babcock

Women negotiate initial salaries less frequently than men, leading to a long-term wage disparity, found Carnegie-Mellon University’s Linda Babcock.

Hannah Riley Bowles

And when women asked for higher salaries in a laboratory simulation, they were negatively evaluated by both men and women participants, reported Harvard’s Hannah Riley Bowles and Lei Lai.
In addition, other volunteers reported less desire to work with women who asked for more money.

Lei Lai

Lei Lai

Both male and female evaluators responded negatively to perceived “demandingness” among women who negotiated, preferring the “nicer” non-negotiators.
However, reducing women’s degree of assertiveness did not improve evaluators’s perceptions of women negotiators.

These finding support Babcock’s original results:  When male and female volunteers asked for salary increases using identical scripts in laboratory situations, participants  liked the men’s style, but disliked the same words from women.
Women negotiators were considered “aggressive” unless they smiled, or displayed a warm, friendly manner.

The social reaction others had to women negotiators, but not the negotiation outcome was improved when female participants:

  • Justified the salary request based on a supporting “business case,”
  • Communicated concern for organizational relationships.

However, neither of these tactics used alone or together, improved women’s negotiation outcomes.

Another approach was more effective in improving both social and negation outcomes:

  • Justifying the salary request based on the relationship.

Women who smile and focus on the interpersonal relationship enact role-based expectations, leading to greater comfort with these women negotiators and more favorable assessments by male and female observers.

 

Kathleen McGinn

Kathleen McGinn

Bowles, with Harvard colleague Kathleen McGinn and with Babcock, suggested that “situational ambiguity” and “gender triggers” modify women’s willingness to negotiate.

However, when women have more information about the potential salary range and are told that the salary is negotiable, they are more likely to negotiate.
Therefore, women benefit from asking:

  • the salary range,
  • which elements of the compensation package are negotiable.
Daniel Pink

Daniel Pink

Effective negotiation is a survival skill, according to Dan Pink:
The ability to move others to exchange what they have for what we have is crucial to our survival and our happiness.
It has helped our species evolve, lifted our living standards, and enhanced our daily lives.

Effective persuaders and “sellers” collaborate in “inspecting” a negotiation and “responding” to the negotiation through “interpersonal attunement.”

Foundational skills for negotiation include Pink’s ABCs:

Attunement:  Harmonizing actions and attitudes with others,

Buoyancy:  Asking questions, “positivity,” and an optimistic “explanatory style,”

Clarity:  Helping others freshly re-assess situations to identify unrecognized needs that can be addressed by the negation proposal.

Joan Williams

Joan Williams

UC Hastings College of the Law’s Joan Williams offered strategies to address documented wage discrepancies.

As more women negotiate salaries, managers may view this as an expected practice.

  • What is the best negotiation pitch you’ve heard for a job-related salary increase or role promotion?
  • How did the person overcome objections?
  • How did the person manage the relationship with the negotiating partner?

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“Everything is Negotiable”: Prepare, Ask, Revise, Ask Again

Anna Beninger

Anna Beninger

Alixandra Pollack

Alixandra Pollack

Persistent compensation gaps continue to occur for women MBA graduates from 26 leading business schools in the United States, Canada, Europe, and Asia, reported Catalyst’s Anna Beninger and Alixandra Pollack.

Women still make about 80 percent of their male peers in a study of salaries in academic medicine by Harvard’s Catherine DesRoches, Sowmya Rao, Lisa Iezzoni, and Eric Campbell with Darren Zinner of Brandeis.

Catherine DesRoches

Women worked more hours, spent more time in administrative tasks, were awarded fewer grants, held fewer top titles, had fewer publications, and were paid less than their male counterparts.

These findings reinforce estimates by Carnegie Mellon’s Linda Babcock, that women MBAs earn USD $500,000 – USD $2 million less than their male classmates over the course of a career because women tend not to negotiate the starting salary or those offered on transfer or promotion.

Linda Babcock

Linda Babcock

In contrast, Babcock found that men are four to eight times more likely to negotiate both salary and promotions.
They also obtain better results in most negotiations.

women dont askBabcock, with Sara Laschever, outlined precursors of these negotiation differences based on differences in typical gender socialization.

They posited that many parents encourage boys to take risks, earn money in part-time jobs, and participate in competitive team sports.
In contrast, parents are more likely to encourage girls to play collaboratively and value interpersonal affiliation.

Sara Laschever

Sara Laschever

These differences enable boys to practice negotiating and competing, and to tolerate disrupted interpersonal relationships, according to Babcock and Laschever.

John List

John List

This suggestion was supported by findings that the gender-based wage gap is associated with women’s tendency not to negotiate salaries and to avoid competitive work roles, in research by University of Chicago’s John List, Andreas Leibbrandt, and Jeffrey Flory.

They posted two identical job ads on internet job boards with different wage structures:  One offered hourly pay whereas the other had pay dependent on performance compared to their coworkers.
More women than men applied to the hourly wage role.

Andreas Leibbrandt

Andreas Leibbrandt

Men were 94 percent more likely than women to seek and perform well in competitive work roles in a study of nearly 7,000 job seekers across 16 large American cities.
This gender gap “more than doubled” when the reward for performance rose.
Women significantly more likely to walk away from a competitive workplace if they saw few alternative employment options.

Jeffrey Flory

Jeffrey Flory

In contrast, women were more likely to apply if the performance relied on teamwork, not on the individual, or if the salary was a flat fee independent of their performance.

When there was no explicit statement that wages are negotiable, men were more likely to negotiate than women.
However, when wages were “negotiable,” this difference reversed when women had explicit “permission” to ask for higher salaries and job titles.

Babcock also found that women and men evaluate negotiation and interpersonal behavior differently:  Negotiation practices that are generally judged “acceptable” for men are frequently assessed as “overly aggressive” when women use them.
As a result of this differential evaluation of negotiation practices, Babcock and Laschever advised women to:

  • Define goals, acknowledging that “everything is negotiable,”
  • Research personal “market worth” in comparative job using online resources like Salary.com and Glassdoor.com,
  • Reconsider low sense of entitlement to higher salaries and job roles,
  • Challenge potential anxiety about negotiation,
  • Plan negotiation rationale, citing specific accomplishments, results, value to the organization,
  • Practice a positively-stated, confident negotiation “pitch,” offer timing, set an advantageous anchor point, and provide counterarguments to mitigate objections,
  • Plan counter-offers and self-supporting thoughts to manage anxiety while maintaining negotiation position and interpersonal rapport.

Collaborative negotiation by cooperative bargaining enables both people to derive value from the negotiation conversation.
They suggest building negotiation courage, comfort, skill, stamina, and strength while focusing on the negotiation goal and delivering value for all parties through a “Negotiation Gym” program.

Foundational negotiation principles were summarized in Getting to Yes: Negotiating without Giving In by Harvard’s Roger Fisher and William Ury.
More recently, Ohio State’s Roy Lewicki, David Saunders of Queen’s University, and Vanderbilt’s Bruce Barry of Vanderbilt detailed their research-based guide to Negotiation.

Leigh Thompson

Leigh Thompson

More than 90% of all negotiators fail to ask “diagnostic questions” that uncover the negotiation partner’s most important needs, priorities, preferences, and even fears, found Leigh Thompson of Northwestern.
Eliciting this information is associated with significantly improved negotiation outcomes, she found

Knowing Your ValueTelevision journalist Mika Brzezinski echoed Babcock and Laschever’s recommendations based on interviews with prominent women and men about the persistent gender wage gap.
She distilled disconcerting labor statistics and suggested a model for negotiation:

  • Research,
  • Leverage,
  • Negotiate,
  • Re-negotiate.Hardball for Women
Pat Heim

Pat Heim

Women’s reluctance to negotiate may be related to gender differences in attributions of success and failure, suggested Pat Heim:
Women attribute failures to themselves (“internalizing,” “taking it personally) whereas men identify external factors (“blaming”, “rationalizations”) associated with their shortcomings.
In contract, women attribute success to external factors (“deflection of merit”). Men, in contrast, typically attribute their effective performance to to themselves (“self-bolstering”).

Men are typically promoted because they are seen to have “potential,” whereas women are typically promoted based on their results and accomplishments, noted Heim.
Even factors like attire can influence perception of authority:   Men judged women but not other men as less authoritative when wearing “business casual” attire.

Women can systematically develop skills and behaviors required to close the well-documented wage gap between professional women and men.

-How do you prepare for negotiations and overcome objections during negotiations?

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Range Offers vs Point Offers in Negotiation for Advantageous Settlements

Daniel Ames

Daniel Ames

Many people hesitate to present a negotiation offer as a range of values because they are concerned that co-negotiators will anchor on the lower value in the range as a “reservation price” or “bottom line.”

Malia F Mason

Malia F Mason

In fact, range offers may lead to stronger outcomes, according to Columbia University’s Daniel R. Ames and Malia F. Mason.
They compared range offers with point offers in laboratory studies of negotiations.

First offers can be powerful anchors, despite their risk of bias and marginal accuracy, reported University of Chicago’s Nicholas Epley and Thomas Gilovich of Cornell.

Nicholas Epley

Nicholas Epley

Even more influential aredual anchors” in range offers because they signal a negotiator’s knowledge of value as well as politeness.
Ames and Mason suggested that
negotiator credibility and knowledge of value increase anchor potency. 
Coupled with interpersonal relationship “capital”, these factors determine settlement outcomes.

Thomas Gilovich

Thomas Gilovich

Range and point opening offers can have varying impacts, depending on perceived preparation, credibility, politeness, and reasonableness of the proposer.

Ames and Mason tested three types of negotiation proposal ranges:

  • Bolstering range, which includes the target point value as the bottom of the range and an aspirational value as the top of the range.
    This strategy usually yields generous counteroffers and higher settlement prices, and is a recommended approach.
  • Backdown range, which features the target point value as the upper end of the range and a concession value as the lower offer.
    This approach often leads to accepting the lower value and is generally not recommended.
  • Bracketing range, which spans the target point offer and tends to have neutral settlement outcomes for the offer-maker.
    Compared with point offer-makers, bracketing range offers provided some relational benefits because they were seen as less aggressive.
Martin Schweinsberg

Martin Schweinsberg

Extreme anchors can be seen as offensive, and may lead to negotiation breakdown, according to INSEAD’s Martin Schweinsberg with Gillian Ku of London Business School, collaborating with Cynthia S. Wang of University of Michigan, and National University of Singapore’s Madan M. Pillutla.
Somewhat surprisingly, they found that negotiators with little power were more likely to walk away from extreme anchors.
Also surprisingly, high-power negotiators were equally offended.

Gilliam Ku

Gilliam Ku

Previously, Mason and team showed the benefit of precise single number offers, and the current research shows the value of less precise range offers.

Mason and team argue that point offers and range offers are independent and interactive informational processes with influence on settlement values: “…bolstering-range offers shape the perceived location of the offer-maker’s reservation price, (and) precise first offers shape the perceived credibility of the offer-maker’s price proposal.

  • When do you prefer to present a precise, non-rounded negotiation offers instead of a negotiation range?

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Nothing to Lose: Effective Negotiating Even When “Powerless”

Michael Schaerer

Most negotiators prefer to have alternatives as a “fall back position.”
However, having no alternatives and less power than co-negotiators can improve outcomes, found INSEAD’s Michael Schaerer and Roderick Swaab with Adam Galinsky of Columbia.

Alternatives enable negotiators to gain concessions from co-negotiators because they have a BATNA – Best Alternative To a Negotiated Agreement, defined by Harvard’s Roger Fisher and William Ury.

Roger Fisher

Roger Fisher

When an alternative is weak, it can undermine negotiating outcomes more than having no alternative because it establishes an “anchor point” based on competing options.

Anchoring is a frequent cognitive bias characterized by overvaluing one piece of information, according to Hebrew University’s Amos Tversky and Daniel Kahneman of Princeton.

William Ury

William Ury

Typically, negotiators anchor on the value of their alternatives when making their first offer, so people with weak alternatives generally make lower first offers than those with no alternative.
“Lowball” first offers based on few or poor alternatives usually undermine a negotiator’s final outcome.

Professional athletes and their agents provide many anecdotal examples of negotiating better deals when they have no “back up” offers and “nothing to lose” because they can set ambitious anchor points.

Amos Tversky

Amos Tversky

In a separate study of job negotiation, Schaerer and team asked a hundred people whether they would prefer to negotiate a job offer with a weak alternative or without any alternative.
More than 90 percent indicated that they would prefer to enter the negotiation with an unattractive alternative offer, confirming the popular assumption that any alternative is seen as better than no alternative.

Another of Schaerer’s lab studies asked volunteers to imagine they were selling a used music CD by The Rolling Stones.
They randomly assigned participants to three groups and gave each group different information about their alternatives, ranging from:

  • No offers (no alternative),
  • One offer at USD $2 (weak alternative),
  • A bid at USD $8 (strong alternative).
Roderick Swaab

Roderick Swaab

Volunteers in each group proposed a first offer, and rated the degree of power they felt.
Not surprisingly, people with the strong alternative felt the most powerful and those with no alternative felt the least powerful.

However, people with a weak alternative felt more powerful than those with no alternative, but they made lower first offers, signaling less confidence than participants with no alternative.
Having alternatives, whether poor or attractive, may make people feel powerful but can undermine negotiation performance.

Schaerer’s team further explored this paradox by pairing participants as a  “seller” who was offering a Starbucks mug during a face-to-face meeting, and a potential “buyer.”

Adam Galinsky

Adam Galinsky

Before the meeting, the seller received a phone call from “another buyer,” who was actually a confederate.
For half of the “sellers,” the potential buyer either made a low offer or declined to bid.

“Sellers” without an alternative offer said they felt less powerful, but made higher first offers and received considerably higher sales prices than negotiators with a an unattractive alternative.

In another situation, half of the “sellers” concentrated on available alternatives (none, weak, or strong) and the remaining negotiators focused on the target price.

Volunteers with unappealing alternatives negotiated worse deals than those without other options when they focused on alternatives, but “sellers” avoided this pitfall by concentrating on the target price.
This is another validation of focusing on the goal when alternatives are weak, and of the power of first-offer anchors.

Negotiators with non-existent or unappealing alternatives benefit from caution in setting modest first offers driven by feeling powerless.
Instead, the situation can be reconstrued as an opportunity to set audacious goals, reflected in an ambitious opening offer.

  • How do you overcome lowball anchoring when you have few negotiation alternatives?

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“Precise” Offers Provide Negotiation Advantage

Malia F Mason

Malia F Mason

Opening negotiation offers typically “anchor” the discussion and shape settlement values.
Many people make opening offers in “round” numbers like $10 instead of “precise” numbers like $9.
However, “round number offers” were less powerful than “precise” offers in negotiations, found Columbia’s Malia Mason, Alice J. Lee, Elizabeth A. Wiley, and Daniel Ames.
This finding suggests that negotiators can improve their outcomes by specifying offers more precisely, such as $103.

Y Charles Zhang

Y Charles Zhang

Precise first offers more potently anchored the negotiation range than round number proposals, perhaps because those who proposed precise offers were perceived as more confident, credible, and “well-informed” regarding actual value.

Norbert Schwartz

Norbert Schwartz

This finding complements observations by University of Michigan’s Y. Charles Zhang and Norbert Schwarz of University of Southern California that consumers have less confidence in precise estimates when they doubt the communicator and when they engage in less “cooperative conversational conduct norms” during negotiations.

H Paul Grice

H Paul Grice

These norms, defined by Berkeley’s H. Paul Grice in Grice’s maxims, which advocate communicating:

  • Briefly,
  • Clearly,
  • Relevantly,
  • Truthfully,
  • Offering only as much and content as required.

Despite the apparent advantages of more precise offers, these could signal “inflexibility” to some co-negotiators.
As a result, people who received precise offers generally made more conciliatory counter-offers, leading to smaller adjustments and more favorable final settlements.
Precise offers also led to better final deals even when the negotiator opened with a less ambitious, but precise offer.

Martin Schweinsberg

Martin Schweinsberg

Another benefit of precise offers is that they are less likely to offend a co-negotiator by signaling aggression or greed, according to INSEAD’s Martin Schweinsberg collaborating with Gillian Ku and Madan M. Pillutla of London Business School’s and Cynthia S. Wang of Oklahoma State University.
Ambitious first offers may lead a negotiation partner to walk away from the discussion, resulting in an impasse or stalled progress toward a final settlement.

Gillian Ku

Gillian Ku

In addition, negotiators who see themselves in a lower-power position are more likely to walk away, even though both low-power and high-power negotiators were equally offended by extreme offers.
Though an extreme offer may result in high rewards, it can be a more risky strategy than offering a more moderate precise offer.

Manoj Thomas

Manoj Thomas

Another advantage of more precise offers is that buyers may not recognize their actual magnitude:  Buyers underestimated the size of precise prices, particularly under uncertain conditions in studies by Cornell’s Manoj Thomas and Vrinda Kadiyali with Daniel H. Simon of Indiana University.

In fact, U.S. homeowner participants in their lab said they would pay a higher price quoted in precise numbers than when stated in round number in the team’s analysis of actual residential real estate transactions in two U.S. markets.
In fact, buyers actually paid more when list prices were precise in experiments by Thomas and team.

Vrinda Kadiyali

Vrinda Kadiyali

Precise offers provide some of the benefits of favorably anchoring negotiation discussions while reducing risks of extreme offers.

-*How effective have you found “precise” opening offers in achieving your negotiation goals?

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Women May Undermine Salary Negotiations with Excessive Gratitude

Negotiators and poker players know the value of limiting full self-disclosure in words and non-verbal expressions.

Andreas Leibbrandt

Andreas Leibbrandt

However, some women undermined their salary negotiations by revealing their gratitude for a salary that exceeded their expectations in an experiment by Monash University’s Andreas Leibbrandt and John A. List of the University of Chicago.

John List

John List

Participants were women applying for administrative assistant jobs with a posted wage of $17.60 USD per hour.

Researchers told some volunteers that the wages were “negotiable,” and these women negotiated their pay upward by a ratio of more than 3 to 1.
This result echoes previous findings that women frequently do not negotiate unless given explicit permission, and consequently, have lower salary offers than those who negotiate.

Leibbrandt and List tested this hypothesis by not mentioning negotiation to the remaining participants, and these women typically provided “too much information” by remarking that the posted wage “exceeds my expectations. I am willing to work for a minimum of $12.”

-*Could this comment be “strategic ingratiation” to effectively influence a negotiation partner?

Edward E. Jones

Edward E. Jones

Consider three methods of ingratiation, outlined by Duke University’s Edward E. Jones:

  • Self-presentation (self-enhancement or “one-down” humility, providing favors or gifts),
  • Flattery (“other-enhancement” either directly or ensuring word-or-mouth report of positive yet credible comments),
  • Agreement (opinion-conformity, non-verbal matching-mimicry).

Although the ingratiator’s intent may be to enhance the future working relationship, this approach may be seen as “overselling” after a sales prospect agrees to a deal – and may lead to undoing the proposal.

In this case, the negotiation partner may question the applicant’s judgment, qualifications, and confidence, and may delay salary increases because the candidate appears satisfied with the offer.

Steven H. Appelbaum

Steven H. Appelbaum

When discerningly applied, ‘strategic ingratiation’ in organizations may result in personal rewards including promotion or pay increase, according to Concordia University’s Steven H. Appelbaum and Brent Hughes.

They found that effective use of “strategic ingratiation” was influenced  by situational factors and individual variables including:

  • Machiavellianism,
  • Locus of control,
  • Work task uniqueness.
Jeffrey Flory

Jeffrey Flory

In another of Leibbrandt and List’s randomized field studies, collaborating with Concordia colleague Jeffrey Flory, they found that among nearly 2,500 job-seekers, men did not wait for permission when no statement was made about salary negotiation, and in fact, male participants said they prefer ambiguous salary negotiation norms.
Despite women’s general hesitance to negotiate without an invitation, women advocated for more favorable salaries at about the same rate as men when they were invited to negotiate.

The team extended these findings by analyzing nearly 7,000 job-seekers with varying compensation plans.
In “competitive work settings,” salary negotiation was typically expected, and men stated a preference for these work environments.

Leibbrandt, List and Flory concluded that women accept “competitive” workplaces provided “the job task is female-oriented” and the local labor market leaves few alternatives.

Women looking for better salary outcomes benefit from proposing their “aspirational salaries” rather than waiting for permission to negotiate.
In addition, women negotiators can achieve better outcomes when they offer moderate expressions of gratitude and avoid revealing their “reserve” salary figure.

-*In what work situations have you benefitted from applying ‘strategic ingratiation’?

-*To what extent have expressions of gratitude in negotiation undermined bargaining outcomes?

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