Much of the advice you read about how to negotiate your salary is rubbish.
It's not just that salaries are a touchy subject and so they're difficult to investigate accurately, it's also that the same old clichés get repeated over-and-over again by lazy writers.
But a few recent psychology studies do provide a scientific insight into how to get paid more. Here's what you need to know:
1. Open negotiations
If you don't ask, you won't get. It's surprising how many people hardly negotiate at interview and, during employment, fail to negotiate a pay rise. Initial very low offers may force us to negotiate but those who are always ready to negotiate, whatever the situation, are likely to achieve higher salaries.
One early study of graduating MBA students found that those who were prepared to negotiate achieved better starting salaries (Gerhart & Rynes, 1991).
It's pretty obvious advice but it's amazing how many people fall at the very first hurdle.
2. You should set the anchor
Oddly, articles on this subject often recommend waiting for the other side to open the bidding. This may work in auctions but according to research on salary negotiation, this is wrong.
The first number that gets mentioned is important because it acts as an anchor against which other numbers are judged. If you allow the other side to set the anchor then they will set it low and grab control of the negotiation. Studies find that, whether consciously or otherwise, this first offer sets the tone for the whole negotiation.
3. Start high
When you mention a number, make sure it's high—that is, high in the context of the industry you work in, obviously it shouldn't be ridiculous.
One study of simulated salary negotiations has found that when the anchor figure is set high, the final negotiated amount is likely to be higher (Thorsteinson, 2011).
4. Make a joke
One potential problem with making high opening offers is that employers can take it the wrong way. Tension can be diffused, though, by making a joke about, for example, 'unrealistic salary expectations'.
There is evidence in the negotiation research that humour—when used appropriately—can be an effective negotiation tactic.
Remember that even when framed with humour, a high opening number can still influence the ultimate decision (Thorsteinson, 2011).
Whether you like it or not, negotiating your salary is a game, with all the usual attempts at deception and sportsmanship. So, once the main body of the negotiations are under way, try to dominate them as you would any competitive game.
Try to persuade and assert and, if necessary, misrepresent and threaten. Research suggests that competition is a successful negotiation strategy (Marks & Harold, 2011)
When negotiating your salary, you don't have to compete all the time, collaboration can also work. Find out what is in the other side's interests. This can be a useful strategy but...
7. Win-win feels better, but nets less
In the research by Marks and Harold (2011), people who tried to find win-win solutions to their salary negotiations felt better about the negotiation, but crucially made less money. People who used win-lose approaches felt worse but made more money.
This flies in the face of standard advice about looking for win-win scenarios (the problem is they can make you look weak). So the question is: do you want to feel good or earn more?
8. Avoid compromise and accommodation
Common advice on salary negotiation is to be reasonable and flexible. But what's emerging clearly from this research is that compromise and accommodation tend not to work. These are both strategies which place too much weight on what is best for your employer (i.e. to pay you less).
If you compromise and accommodate the result will be simple: you'll get less money.
9. Forget gender stereotypes
If you're a woman and think this all sounds a bit masculine, then don't. The research suggests there's little difference between the way men and women negotiate their salaries (although women do still sometimes end up with less). In fact women are sometimes more competitive than men in negotiations (Walters et al., 1998).
10. Be bold
A personality trait that's central to negotiation is risk aversion: those who avoid taking risks are worse negotiators. Of course some of us are just inherently more risk averse than others. The problem is that high risk aversion is associated with less use of competition as a negotiation strategy, and being competitive works.
The fact is that to get the best deal you have to embrace the risk because if you're afraid to risk, you'll get less (Marks, 2011).
Believe that you're worth it
A common stumbling block in salary negotiations is thinking you're not worth it. So it's vital to convince yourself that you are worth it.
Try to find out what other people are getting paid for doing the same job. If it's more, then you are worth more. If it's not more, then think of why you specifically should earn more. With that in mind you can go into your salary negotiation with an anchor in mind, a joke to ease the tension and the willingness to take a risk to make a substantial gain.
The Psychology of Work
→ This post is part of a series on the psychology of work:
- 10 Psychological Techniques to Help You Get a New Job
- 7 Easy Ways to Give Your Résumé the Psychological Edge
- 10 Psychological Keys to Job Satisfaction
- Why Career Planning Is Time Wasted
- Ten Powerful Steps to Negotiating a Higher Salary
- Can You Get Things Done Without Making People Hate You?
- 7 Ways Work Can Make You Physically Sick
- The Problem With Narcissistic Leaders
- 7 Reasons Leaders Fail
- How To Be a Great Leader (in under 300 words)
Making Habits, Breaking Habits
In his new book, Jeremy Dean--psychologist and author of PsyBlog--looks at how habits work, why they are so hard to change, and how to break bad old cycles and develop new healthy, creative, happy habits.
→ "Making Habits, Breaking Habits", is available now on Amazon.Reviews
The Bookseller, “Editor’s Pick,” 10/12/12 “Sensible and very readable…By far the most useful of this month’s New You offerings.”
Kirkus Reviews, 1/1/13 “Making changes does take longer than we may expect—no 30-day, 30-pounds-lighter quick fix—but by following the guidelines laid out by Dean, readers have a decent chance at establishing fulfilling, new patterns.”
Publishers Weekly, 12/10/12 “An accessible and informative guide for readers to take control of their lives.”