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Companies need to encourage merit-based negotiations or they run the risk of losing top talent, according to an expert. Here are 3 ways managers can build up a healthy negotiation culture.

Apr. 11, 2021
Companies need to encourage merit-based negotiations or they run the risk of losing top talent, according to an expert. Here are 3 ways managers can build up a healthy negotiation culture.

I recently led negotiation training for new sales managers in a large global organization. The focus was on the sales-customer relationship, but very quickly, the Q&A session turned to salary negotiations and the smart group quickly realized that all of their negotiation skills could be used in their own salary negotiations.

I later learned that some participants immediately initiated negotiations with their bosses to get raises.

What's the bottom line? If companies want their people to be skilled negotiators with customers, clients, suppliers, and business partners, they need to be ready for it to be turned back around on them.

Scripted negotiations are planned and orchestrated, such as buying a house or negotiating a car or job offer.

Unscripted negotiations do not come with an outline and are typically self-initiated. For example, an unscripted negotiation is asking for a raise outside of the performance review cycle. Bold people are most likely to initiate unscripted negotiations.

However, most companies don't simply want to reward the bold, but instead, reward the talented. The problem is that bold people initiate negotiations; talented people spend their time doing their job.

I ask business leaders, "Do you want to reward based on performance or someone who is a self-promoter?"

It's important because there's a lot of people who are very talented but they don't knock on doors. They have high emotional intelligence and can think of reasons not to, such as they don't want to bother their boss, etc.

In the absence of a script, talented people may become disheartened and leave the company — or they may be poached by competitors.

So, what do managers and companies need to know when it comes to scripted and unscripted negotiations?

I have three key pieces of advice to managers and companies wanting to level the playing field:

In other words, encourage everyone in your organization to take negotiation courses as a group or in teams. By engaging in shared learning, the culture of negotiation can be built and reinforced as a team sport, not an individual sport.

That is equivalent to reading a book about tennis and then expecting to perform well on the court. Instead, my own work on negotiation behavior and performance, dramatically shows that role-play experiences with feedback increase performance and confidence.

Negotiation should not just be considered a competitive sport. Contrary to what many think, when we tell people that negotiation skills involve the ability to listen, hear feedback, communicate, and empathize, women perform dramatically better than when negotiation is described as a "competitive, assertive, tough" enterprise.

Chances are, whether you're in sales marketing or operations, you will be on the negotiating bench for your company at some point. That means being a strong negotiator is both good for you and good for the organization.

Leigh Thompson is a professor at Kellogg School of Management at Northwestern University and the author of the new book "Negotiating the Sweet Spot: The Art of Leaving Nothing on the Table."


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