The ability to successfully negotiate your salary, benefits and promotions will have a huge impact on your finances, both in the present and in the future.
In this article, you will learn why negotiation is so important and how you can develop or improve this important skill.
Why is Negotiation Important?
A study conducted by George Mason University and Temple University researchers found that if one negotiated his or her first salary higher by $5,000, assuming 5% raises, that person would earn $600,000 more over a 40 year career. That would significantly increase your lifestyle and allow you to save and spend towards your goals!
You can negotiate more than just your salary. If you are interviewing for a firm, and the salary is already settled, you could negotiate for a day each week that you tele-commute, a few more vacation days, or even bonuses that weren’t included before.
I’ve Never Negotiated; What Do I Do?
“Crucial Conversations: Tools for Talking When Stakes are High” by Patterson, Grenny, McMillan, Switzler teaches you not just how to communicate during a negotiation, but also how to communicate any time that the stakes are high, opinions vary, and emotions could run strong. I would highly encourage you to read it in its entirety, but I will summarize the key takeaways here.
The book talks about how to:
- Recognize if you are in a crucial conversation
- Focus on what is important
- Notice when the other person is feeling uncomfortable or defensive and how to bring him or her back
- Control your emotions
- Speak persuasively
- Produce actions from the conversations.
Those are some pretty great skills to have in a negotiation!
The book proposes that a successful negotiator finds a way to get all relevant information out into the open, because when people share their ideas, they are much more likely to act on whatever decision is made. The next major point was “start with the heart” or “work on me first.” This means that you enter a conversation knowing what you want and you don’t make sucker choices. The way to avoid making sucker choices is to clarify what you want, clarify what you don’t want, and search for the third option that satisfies both of these.
Next, the book talks about watching for changing conditions of the conversation to catch problems before they get too severe. It also discusses how people react when they are under stress; most go to either silence or violence. The book has a quiz to assess your style under stress. In case you are wondering, the results of my quiz showed that I either mask (sarcasm, sugarcoating, and couching) or control (forcing views on others or dominating the conversation). I promise that I’m now working on those! It is important to recognize when you are defaulting to your style under stress so you can control your emotions and return to productive dialogue.
I enjoyed the chapter about making it safe for others to communicate. It suggests stepping out of the conversation, making it safe, and then stepping back into the conversation. My favorite method was to contrast, where you contrast the concern that the other person has with a hypothetical malicious purpose, then clarify your real purpose. It also talked about finding a Mutual Purpose.
In Chapter 6, Master My Stories, the book explains how to recognize and get control of your emotions. I highlighted this quote: “The best at dialogue influence and often change their emotions by acting them out.” It explains that we tell ourselves a story, add motive and add judgment to other’s actions.
The chapter about speaking persuasively, not abrasively was insightful. It says to blend confidence, humility and skill by using STATE- Share your facts, Tell your story, Ask for others paths, Talk tentatively, and Encourage testing.
The Exploring Others Paths chapter talks about how to sharpen listening skills and how to get the other person to share. The skills were to Ask, Mirror, Paraphrase, and Prime. It also reviews the three skills when refuting an idea: Agree, Build and Compare. I really liked the idea of Build, because you agree in theory, and then add the detail that is missing. This is a great way to politely correct what was said without being abrasive.
The Move To Action chapter talks about the four ways that you can decide how to decide: Command, Consult, Vote, and Consensus. I liked the idea of deciding who is going to what by when and setting a follow-up time.
Crucial Conversations is an excellent book with great examples and is a must-read for anyone who needs to know how to talk under pressure.
I Just Need To Know What To Say In a Negotiation
Well, you’re in luck. This handy article, The Exact Words to Use When Negotiating Salary by Rebecca Thorman, walks you through a sample negotiation and what exact words you should say to make it a win-win.
In summary, negotiation is a very important skill to build and your ability to do so effectively has a significant impact on your career and personal life. I hope the resources listed in this article are helpful to you. Make sure to stay tuned for the final article in the series 5 Financial Must-Haves for Gen X and Gen Y.