Scribd
Upload
86 views

How To Score A Higher Salary

When negotiating salary, using precise numbers rather than round numbers can lead to a higher outcome according to research. In experiments, those who suggested precise dollar amounts for cars ended up paying less than those who used round numbers. For salary negotiations, suggesting a precise but still high number like $92,350 may yield a better outcome than a round number because it conveys thorough research rather than just a ballpark figure. Precision allows one to anchor at a higher level without upsetting the other party.

Uploaded by

vaasto2003
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
86 views

How To Score A Higher Salary

When negotiating salary, using precise numbers rather than round numbers can lead to a higher outcome according to research. In experiments, those who suggested precise dollar amounts for cars ended up paying less than those who used round numbers. For salary negotiations, suggesting a precise but still high number like $92,350 may yield a better outcome than a round number because it conveys thorough research rather than just a ballpark figure. Precision allows one to anchor at a higher level without upsetting the other party.

Uploaded by

vaasto2003
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

How to Score a Higher Salary

By Lauren Weber

When negotiating for a salary, most of us reach for a nice, round number like $65,000. Or $90,000. Or $120,000. But, by favoring all those zeros, we may be missing an opportunity to score a better deal, according to a new paper from researchers at Columbia Business School. They found that using more precise numbers in an initial requestor anchor, as it is known in negotiating parlancegenerally results in a higher final settlement. Precision conveys the impression that the job candidate has done extensive research and deeply understands the market for his services, said Malia Mason, the lead author of the paper and a professor at Columbia who teaches a course on managerial negotiations. When people use round numbers, by contrast, theyre conveying that they have only a general sense of the market rate for their skills. The idea for studying the issue of precision came to Ms. Mason last year when she was taking a taxi in Prague and negotiating with the cabdriver over the fare. He asked her for 1,000 korunas, a figure that struck her as relatively arbitrary. It made me think about how we use round numbers, and what they convey about the state of our knowledge, she said. In one experiment, Ms. Mason and her team had 130 sets of people negotiate the price of a used car. When buyers suggested a round anchor, they ended up paying an average of

$2,963 more than their initial offer. But buyers who suggested a precise number for a first offer paid only $2,256 more, on average, than that number in the end. When it comes to negotiating salary, Ms. Masons research indicates that a job candidate asking for $63,500 might receive a counteroffer of $62,000, while the request for $65,000 is more likely to yield a counteroffer of, say, $60,000, as the hiring manager assumes the candidate has thrown out a broad ballpark estimate. We often think a higher anchor is the way to go, said Ms. Mason. But you risk upsetting people if youre too extreme. We found that you could be less extreme if you were precise and still do better in the end. The best strategy, she added, is to start with a high (but not extreme) number that is also precise. So next time you ask for a raise or get offered a new job, consider asking for something like $92,350. And ignore the odd looks you may receive in response.

You might also like