Effective Salary Negotiations by Elena Seryapina

Elena Seryapina

When I got my first job offer after graduating the law school I was very happy and accepted it right away without conducting proper salary negotiations. Half a year later I found out that the guy, who sat right next to me in the office, held exactly the same position at my law firm and did exactly the same work as I did, was making 30% more money than me. I felt miserable. The time when employees doing the same type of work were paid equally is gone without leaving a trace. Now your salary totally depends on how you manage to negotiate it during your job interview or the latest performance review. This process is not easy. Conversely, it might be very stressful, challenging and even scary if you are negotiating your future salary for the first time. When I started looking for the next job I made a small research in order to avoid my prior mistakes and get a fair wage. Let me share my findings with you and briefly define the factors, which significantly influence effective salary negotiations. Then I would like to recommend some negotiation tactics and techniques which might be helpful for the job-applicants to negotiate a prospective salary successfully.

Patrick Gavan O’Shea and David F. Bush in their article “Negotiation for Starting Salary: Antecedents and Outcomes Among Recent College Graduates” note that there are two types of factors which influence the outcome of salary negotiations.[1] The first type is “personal factors”, which mainly refer to the gender of prospective employee, his/her personal negotiation style and strategy, emotional stability or level of anxiety, and also SWOT (strengths, weaknesses, opportunities, and threats). The second type is “situational factors”. There might be a huge variety of situational factors, which reflect certain conditions and circumstances surrounding the applicant in the process of negotiations. For example, such factors might be current employment status of the applicant, existence of other job offers, market value of the applicants, market demand, negotiation style and strategy of the employer, etc. Let me first describe all these factors more explicitly so it will be easier to develop strategic ideas and tactics for effective negotiations.    


Patrick Gavan O’Shea and David F. Bush mark that gender is the most well-researched factor in negotiations. They refer to several laboratory studies, which demonstrated that women usually have lower salary expectations than men, and therefore are ready to settle for the lower salary offers without any further negotiations.[2] Such approach to salary negotiations, widely utilized by women, inspired employers to speculate with salary offers. Apparently this is exactly what happened to me at my first job interview. Employers make initially lower salary offers to women than to men applying for the same position. Another laboratory research demonstrated that men are more inclined to apply active or aggressive techniques in negotiations, such as rejecting a low offer, anchoring, and insisting on the salary level they need. Women, on the other hand, are more inclined to use traditional or soft negotiation tactics, such as telling the employer about their relevant education and work experience, or emphasizing their special skills or high motivation to hard work.[3] As a result women get worse outcomes of salary negotiations than men. Employers are aware that gender differences influence the negotiation styles of the applicants, and, therefore, they actively adjust their own negotiation strategies in response. So women, while preparing for an interview, should adjust their wish lists and bottom lines to the double-standard game usually played by the employers.  



Obviously, a person is more likely to experience stress or emotional pressure when the negotiations get personal. When the person knows that he or she has kids at home to take care of, a house mortgage, and a lot of different bills to pay, he or she will be much more nervous and anxious talking about what salary he or she will be willing to settle for. J. Gray in his article defines “anxiety as a state emotion which might include fear, frustration, stress, tension, worry, apprehension, and nervousness and arises in response to a threat.”[4] Anxiety influences negotiations drastically. Professor J. Rosenberg in his article “Interpersonal Dynamics: Helping Lawyers Learn the Skills, and the Importance, of Human Relationships in the Practice of Law” even notices that anxiety influences thoughts: what the person thinks and the way he thinks.[5] For example, the anxious applicant might get too nervous or angry and make the decision to leave the negotiation table without reaching a deal. Another option for the anxious applicant is avoiding his or her uncomfortable zone and, therefore, settling as soon as possible at any salary level offered. Sometimes you can see that high anxiety also helps applicants to pursue their goals. It helps them to speak up and to insist on the salary level they wish to receive. Nevertheless, this happens extremely rarely.


Another unavoidable factor, influencing inter alia any type of negotiation, is personal negotiation style. This factor is closely linked to the characteristics of the potential applicant: extravert/introvert, thinking/feeling, sensing/intuitive, or judgmental/perceptive. Which negotiation techniques the person is more likely to use directly depends on his or her personality. Feelings of comfort and confidence may be present only if the person uses negotiation tactics corresponding to his/her style: aggressive and tough face to face negotiation v. quiet presentation of facts and figures. Employers, as companies in general, also have preferred negotiation styles, strategies and HR policies. It might be very useful to learn about them before going to the actual interview.


One more personal factor that every applicant should think about before going to the interview is his/her strengths, weaknesses, opportunities and threats (SWOT model). Knowing personal advantages and weaknesses will help the applicant to choose a better strategy for salary negotiations. It is important to present relevant education, skills and experience at the right moment to the right people. This factor is closely related to one basic strategic idea in negotiations, which is “linkage”. Linkage is a tactic of bringing unrelated issues together to expand negotiation topic and to make your position plausible.[6] For example, the applicant can support his/her position by providing the employer with information about other developed projects or experiences which might not be directly related to what the employer is looking for, but will definitely emphasize the applicant’s strengths.        


Besides personal factors, which, as we see, significantly influence the ability of negotiators to reach the agreement and the outcome of the process, there is an open list of situational factors. Patrick G. O’Shea and David F. Bush also talk about the most widespread situational factors in their research.[7] Availability of alternative job offers is one of them. A potential candidate feels much more confident in negotiations when he/she has an extra job offer in his/her pocket. This gives him/her a room for bargaining without feeling desperate. This situational factor is also linked with the BATNA (the Best Alternative To Negotiated Agreement)[8] concept, which I will cover later.


Another quite influential situational factor, which is worth of mentioning here, is general market situation and demand for specific professions/qualifications. For example during the market recessions in 2007-2009 in Russia a lot of highly-paid professionals lost their jobs, since their companies could not afford to pay huge bonuses and high salaries to the top managers. On the other hand, market demand for professionals in the sphere of collecting debts was extremely high. This factor highly influences the type of negotiation strategy, which will be used by the candidate as well as by the employer. The candidate, for example, will not likely be using aggressive techniques knowing that market is low and there are hundreds of unemployed professionals applying for the same position. It is an opposite situation for the employer, though. 


Employment status of the applicant is also a driving power of negotiation. People tend to behave differently depending on the employment situation they are currently going through. Obviously, unemployed candidates will behave more compliantly and use a “traditional” style of negotiation. On the other hand, currently employed candidates will feel much more confident and apply aggressive, competitive tactics: rejecting low salary offers or alternative bonuses (health insurance, pension programs, house facilities, vacation package, etc.) and insisting on high salaries.


Among other situational factors Patrick G. O’Shea and David F. Bush also mention that:

“- individuals, whose current job is not their first job, will be more likely to negotiate than those whose current job is their first job;

- individuals, who have been given the option to present their salary needs, will negotiate more frequently than those who are not given this option;

- individuals, with lower initial salary offers will be more likely to negotiate than individuals with higher initial salary offers.”[9]

So these are the main personal and situational factors, which influence salary negotiations drastically and, therefore, must be analyzed by the candidates very carefully. Before moving on to description of the best negotiation tactics for the potential job applicants, I would like to mention one more factor: time. It is extremely important to conduct salary negotiation with your employer only after you receive a job offer from him. Candidates may destroy the employer’s interest in them by initiating money negotiations and/or stating the extreme salary position too early. Jayant Neogy in his book “Mastering Salary Negotiations” says the following about the best time for salary negotiations: “Remember, you are not in the position to negotiate money (and/or other benefits) until after the “sale” is made.  … The sale is completed only when you have the job offer in your hand.”[10]


Those times when salaries were fixed and nonnegotiable are gone. There is nothing embarrassing, bad or scary in stating your financial requests and bargaining over your yearly income during the interview. It is important to keep in mind that salary negotiation is a “win-win” situation: each side will be happy when the agreement is reached. The employer will fill in the position by hiring a highly qualified person to carry out the project, and the employee will get a job and a salary which meets his/her demands. Therefore, it is quite reasonable to consider salary negotiations interest-based bargaining. Interest-based or collaborative bargaining has been researched a lot last two decades. Most of the scholars define it as a cooperative conflict management technique developed to create mutual value for both of the parties.[11] It assumes that the parties should expand sources, which they eventually might have to divide in order to reach the agreement.

a)    establishing effective communication

As the candidate sits at the negotiation table with the employer, his first priority should be establishing effective communication between them. By communication I understand, first of all, exchange of relevant information. The employer will have at least a resume and a cover letter from the candidate and probably some additional information provided by the HR department as background research. Therefore a potential candidate should gather as much information about the company as possible: the employer’s salary range for the position, corporate policy on salary review and increase, company’s negotiation style and preferred strategies. I must admit though, that some information would be quite difficult to obtain from outside of the company. A potential candidate should also have realistic information about his/her market value for the job, about the market/industry situation in general, and the level of competition, which I was talking about earlier.

b)    effective listening and questioning

Some information a potential candidate might be able to obtain in the actual interview by using effective listening and questioning techniques. There are some facts, which the employer will never talk about unless the candidate asks. It is very important to ask the right questions at the right moment. Candidates should learn how to ask open-ended, direct and concise questions. Their ability to ask the right questions and therefore demonstrate their interest in the position is also evaluated by the interviewer. By asking questions potential candidate will also be able to get an idea about employer’s negotiating style and respond properly. It is also important to listen to the unstated and seek clarifications of incomplete information. Potential candidates will be able to get some information during the interview even if the employer does not speak about it out loud: it is useful to pay attention to interviewer’s behavior, emotions, nonverbal signs, and to think beyond the stated facts.

c)     “nonspecific compensation”

It is important to understand the area of potential negotiation. While preparing for the salary negotiations, the candidate should set his/her clear goal – the level of desirable salary or compensation package. Studies show that people who have such clearly stated and aggressive targets tend to negotiate better outcomes than those people who do not have such targets or set lower expectations.[12] Candidates should also know the lowest offer which they will be able to accept. Nevertheless, it was mentioned earlier that salary negotiation is a collaborative bargaining process, so the lower salary offer might be easily compensated by the employer with some alternative benefits (health insurance, corporate car, etc.). Dean G. Pruit calls such techniques  “nonspecific compensation”: as a result of negotiations one party gets what is desired and the other party is compensated with some unrelated values.[13] 

d)    logrolling

Another very effective technique in collaborative bargaining which might be useful in salary negotiations is logrolling. Logrolling is possible when the parties have different issues under considerations, but they prioritize them differently[14]. So as a result, each party will get the part of his/her demands which he/she finds the most important. Logrolling assumes that the parties have clearly identified their various interests and clarified where they are ready to trade-off. Let’s say our candidate defined that his first priority is yearly income, but it is not essential for him how this money will be spread out during the year. So the employer might offer him a lower monthly salary, but a higher percent of the annual bonus paid on the basis of annual corporate income.

e)    first offer

Unlike in competitive bargaining where the first move (meaning the first offer) is the most important one, in interest-based salary negotiations this rule might harm the candidate. It is not recommended to begin negotiations by telling the employer your salary expectations.[15] The employer’s first interest is cost-cutting, so if the candidate’s figure is low enough, the employer will gladly agree to it or will start bargaining even lower. It is important not to let the employer  gauge the expected salary. It is rare nowadays, that companies have rigid nonnegotiable salary structures. But even if some of them do, then there are a lot of alternative options for the employee to negotiate compensation for lack of financial income. 

f)     bottom line and BATNA

To some people the process of salary negotiations might seem to be unfair. Obviously the employer often has a stronger bargaining position than the potential employee. It is especially true now, bearing in mind current economic situation in the world: a lot of unemployed people apply for the same positions making the level of competition surprisingly high. Roger Fisher and William Ury recommend two instruments for the weaker position to feel stronger in negotiations.[16] The first is setting the bottom line, which I have mentioned before. Professors R.Fisher and W. Ury say that by defining the lowest offer they could accept, the potential candidate will never make a very unprofitable deal. The problem here is that negotiators are often inclined to set relatively high bottom lines, which may prevent making a relatively beneficial agreement. The other tool, which professors offer is BATNA (the Best Alternative To a Negotiated Agreement). BATNA is a certain standard for the candidate to measure the proposed offer. BATNA is an alternative set of benefits which the candidate will have without negotiating. It might be the current level of income he/she has, or the other job offer he/she will accept in case these negotiations do not bring the desired outcome. So the professors claim that the stronger your alternative options are the stronger your negotiating position is. BATNA is the only tool which protects the candidate from making agreements which are too unfavorable or rejecting terms and conditions which might be relatively interesting to accept. Therefore every job applicant should have in their pocket a clearly stated BATNA before going to salary negotiations. This will also increase their self confidence and decrease unfavorable anxiety.        

These are the main negotiating tactics, which might be useful in salary negotiations. Every case is unique. The parties should adjust their strategies depending on given circumstances. It is also important to remember that decisions must be made in the face of uncertainty. Getting a new job and negotiating a new salary is a very sensitive issue. One should think twice before making a commitment or rejecting a good offer. Sometimes it is better to accept a lower offer than to be without a job for an indefinite period of time. This rule works the same way for employers as well. Sometimes it is better to pay more and to hire a responsible and smart employee then to pay less and to get a lazybones.   

[1] O’Shea P., & Bush, D. (2001). Negotiation for starting salary: antecedents and outcomes among recent college graduates. Journal of Business and Psychology, Vol.16, No. 3.

[2] Major, B., & Konar, E. (1984). An investigation of sex differences in pay expectations and their possible causes. Academy of Management Journal, 27, 777-792.

[3] King, W. C., & Hinson, T. D. (1994). The influence of sex and equity sensitivity on relationship preferences, assessment of opponent, and outcomes in a negotiation experiment. Journal of Management, 20, 605–624.

[4] Gray, J. (1991). Fear, panic, and anxiety: What’s in a name? Psychological Inquiry,  21, pp. 77–78.

[5] Rosenberg, J. (2004). Interpersonal dynamics: helping lawyers learn the skills, and the importance, of human relationships in the practice of law. University of Miami Law Review, 1225-83.

[6] Goodpaster, G. (1996). A premier on competitive bargaining. Dispute Resolution, 325, 349-63.

[7] O’Shea P., & Bush, D. (2001). Negotiation for starting salary: antecedents and outcomes among recent college graduates. Journal of Business and Psychology, Vol.16, No. 3.

[8] Fisher, R. & Ury, W. (1981, 1991). Getting to YES. Negotiating Agreement Without Giving In. Penguin books. New York. 

[9] O’Shea P., & Bush, D. (2001). Negotiation for starting salary: antecedents and outcomes among recent college graduates. Journal of Business and Psychology, Vol.16, No. 3. p.6.

[10] Neogy, J. (2004). Mastering salary negotiations. Retrieved Nov.1, 2011 from http://books.google.com/books?hl=en&lr=&id=WskrR6lqdr4C&oi=fnd&pg=PA5&dq=how+to+negotiate+a+better+salary+in+legal+profession&ots=R88uCrOf3s&sig=1qu1IXFAptVN_6A4gfKXmwwSH4I#v=onepage&q&f=false

[11] Wiggins, Ch. & Lowry, R. (2005). Negotiation and Settlement Advocacy. Thomson West. St. Paul, MN.

[12] Neogy, J. (2004). Mastering salary negotiations. Retrieved Nov.1, 2011 from http://books.google.com/books?hl=en&lr=&id=WskrR6lqdr4C&oi=fnd&pg=PA5&dq=how+to+negotiate+a+better+salary+in+legal+profession&ots=R88uCrOf3s&sig=1qu1IXFAptVN_6A4gfKXmwwSH4I#v=onepage&q&f=false

[13] Pruitt, D. G. (1983). Achieving integrative agreements. In Max Bazerman & Roy Lewicky, eds. Negotiating in Organizations, pp. 36-44.

[14] Pruitt, D. G. (1983). Achieving integrative agreements. In Max Bazerman & Roy Lewicky, eds. Negotiating in Organizations, pp. 36-44.

[15] Neogy, J. (2004). Mastering salary negotiations. Retrieved Nov.1, 2011 from http://books.google.com/books?hl=en&lr=&id=WskrR6lqdr4C&oi=fnd&pg=PA5&dq=how+to+negotiate+a+better+salary+in+legal+profession&ots=R88uCrOf3s&sig=1qu1IXFAptVN_6A4gfKXmwwSH4I#v=onepage&q&f=false

[16] Fisher, R. & Ury, W. (1981, 1991). Getting to YES. Negotiating Agreement Without Giving In. Penguin books. New York.  

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