Negotiating Job Contracts: Effective Strategies to Improve Your Outcome

Negotiating Job Contracts: Effective Strategies to Improve Your Outcome

How to be comfortable being uncomfortable while negotiating

By Sarah Aghjayan

Are you in a position to negotiate your salary but do not know where to start? If so, you are not alone. According to a recent survey by Glassdoor, more than half of American workers accepted their employer’s pay offer without negotiating (2016). Many times, workers do not negotiate their salary because they are afraid of being told no or losing the job offer, they think it might create a negative impression, or their employer did not signal that the offer was negotiable by asking their expected salary. While negotiating can seem intimidating, there are several strategies that can help you feel more comfortable when negotiating and lead to a more positive outcome. Whether you are seeking a position in an academic, clinical, or industry setting, these effective strategies and resources may help boost your confidence when negotiating.

What you want

Before you can begin negotiating, the first step is to figure out what it is that you want. In her book titled Ask For It, Linda Babcock, a specialist in negotiation and dispute resolution, provides a list of questions to help you determine what you love, what you need, and what your goals are (2009). For example, take some time to reflect on which aspects are missing from your current job that would make you happy and which qualities would make you feel content. Is it a stimulating work environment, autonomy, flexibility, or work-life balance? To further help you determine what to negotiate for, try prioritizing your goals. For example, three long-term goals might be financial independence, community service, and self-improvement. If you are having difficulty determining what your goals and needs are, try considering what you would regret not doing or what you would want if you could have anything.

The first offer

Now that you have an idea of what you want to negotiate for, where do you start? A meta-analysis of negotiation experiments found that the first offer serves as the anchor for the negotiation, such that each additional dollar in the initial offer is associated with approximately 50 cents more in the final offer (Guthrie & Orr, 2006). For example, if a company makes a first offer of $60K and you were planning on negotiating for $80K, you will likely counter-offer with a lower salary amount than if the company had disclosed a budget of $70K. In this way, the initial offer biases how we assess the probability of a successful counteroffer. If you do not have a chance to make the first offer, do not worry, as the final offer is often agreed upon at a value near the midpoint of the first two offers (Bazerman, 1992). 

Adam Grant, Ph.D., an organizational psychologist, discussed the benefit of asking for a salary range on his podcast with TED (WorkLife with Adam Grant, 2018). Asking for a salary range that encompasses your target salary communicates to your employer a bottom line without explicitly having to disclose one and conveys to your employer that you are flexible. He also discussed the benefits of negotiating multiple issues simultaneously. Salary negotiations often involve many different moving parts that make up your entire compensation package, including remote work options, vacation time, flexible work hours, continuing education opportunities, and conference stipends. Determine which factors are most important to you and propose different combinations of these factors at varying levels to create an entire compensation package that is of the same value to you. For example, if base salary and work hours are important to you, presenting two offers that include either a high salary and more hours or a moderate salary and fewer hours increases your odds of a fair negotiation. 

Results and relationships

Because social relationships are important to negotiations, building rapport with your employer will likely improve the outcome. Building rapport may involve sharing personal information or asking your employer what you could do to help make the offer worthwhile for them. According to the norm of reciprocity, sharing personal information conveys that you are trustworthy and, in turn, people respond favorably and are more likely to return the favor (Mislin et al., 2015). You can also improve your relationship with your employer by asking what their goals and future concerns are, or what they want from the offer. When preparing your offer, consider what your employer’s interests and challenges might be to devise a balanced offer that is more likely to be agreed upon (Galinsky et al., 2008).

Know the market

There may be situations where you feel that the job offer was better than you were expecting. This may arise for multiple reasons, including geographical differences in salary or a lack of information about the market. Research shows that collecting information about the market, external guidelines, and salaries of other people in similar positions before you begin the process of applying to jobs can improve the negotiation results (Riley & Babcock, 2002). Finding a mentor who is working in a position you are interested in can prove useful for asking about salary and job contract guidance. Some useful resources to research compensation are LinkedIn, Glassdoor, and Levels.fyi.

Ultimately, it is important to remember that if you do not ask for something, you are not likely to receive it. Practice negotiating at home with your family or at a café when buying your morning coffee to improve your comfort and confidence in negotiating. With practice, negotiating will require less effort and feel more comfortable. 


About the author

Sarah Aghjayan is a sixth-year graduate student in the joint Clinical and Biological Health Psychology Ph.D. program and the Brain Aging & Cognitive Health Lab at the University of Pittsburgh.

References and Resources

Babcock, L., & Laschever, S. (2009). Ask For It: How Women Can Use the Power of Negotiation to Get What They Really Want. Bantam.

Bazerman, M. H. (1992). Negotiating Rationally. Free Press.

Galinsky, A. D., Maddux, W. W., Gilin, D., & White, J. B. (2008). Why It Pays to Get Inside the Head of Your Opponent: The Differential Effects of Perspective Taking and Empathy in Negotiations. Psychological Science, 19(4), 378–384. https://doi.org/10.1111/j.1467-9280.2008.02096.x

Glassdoor. (2008). https://www.glassdoor.com/

Glassdoor Team. (2016). 3 in 5 Employees Did Not Negotiate Salary. https://www.glassdoor.com/blog/3-5-u-s-employees-negotiate-salary/

Grant, A. (2013). Give and Take: Why Helping Others Drives Our Success (Reprint edition). Penguin Books.

Guthrie, C., & Orr, D. (2006). Anchoring, Information, Expertise, and Negotiation: New Insights from Meta-Analysis. Ohio State Journal on Dispute Resolution21, 597.

Levels.fyi. (2017). https://www.levels.fyi

LinkedIn. (2021). https://www.linkedin.com/

Mislin, A. A., Boumgarden, P. A., Jang, D., & Bottom, W. P. (2015). Accounting for reciprocity in negotiation and social exchange. Judgment and Decision Making10(6), 571–589.

Reyt, J.-N. (2021, February 11). Negotiating Job Offers: 5 Experts Share Their Best Tips. Jean-Nicolas Reyt, PhD. https://reyt.net/blog/negotiating-job-offers-5-experts-share-their-best-tips/

Reyt, J.-N. Master Negotiator Newsletter. https://reyt.net/newsletter/

Riley, H. C., & Babcock, L. (2002). Gender as a Situational Phenomenon in Negotiation (SSRN Scholarly Paper ID 305159). Social Science Research Network. https://doi.org/10.2139/ssrn.305159

WorkLife with Adam Grant. (2018). The science of the deal (Season 3). https://www.ted.com/podcasts/worklife

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