Abstract
Although most employers report room for negotiation in their job offers to recent graduates, fewer than half of recent graduates report attempting to negotiate. Considering that every raise employees receive throughout their career will be a percentage of their salary at the time, failure of new employees to maximize starting salary through negotiation is a serious omission. Developing business students’ negotiation skills should be an objective incorporated into business curricula allowing students to succeed in their job offer negotiations. The role-play exercise herein is designed to provide business students a foundation in basic negotiation through a scenario that boosts student interest and engagement and allow quick applicability in their professional lives. The exercise is designed for use in courses that focus on negotiation, management, or business communication, but it is adaptable for nearly any upper level business course.
Keywords
In 1965, Walton and McKersie’s A Behavioral Theory of Labor Negotiations ignited academic interest in researching and teaching negotiation. By the early 1980s, Harvard established the Program on Negotiation and ultimately became the leader of negotiation research and pedagogy (Harvard College, 2017). In 1983, Fisher and Ury published the canonical Getting to Yes: Negotiating Agreement Without Giving In. Today, negotiation courses and workshops are commonplace in colleges of business and law.
Teaching negotiation principles to business students prepares them for workplaces that are inundated by negotiation opportunities. Moreover, because negotiation requires analytical thinking, clear communication, emotional intelligence, and context-specific knowledge, teaching negotiations allows business students to develop competency in all knowledge areas required by the Association to Advance Collegiate Schools of Business (2017).
Courses on negotiation generally teach two approaches to negotiation: distributive and integrative (Greenhalgh & Lewicki, 2015; Susskind, 2015). Distributive negotiation focuses on dividing the available resources, where participants attempt to maximize their own gain with little or no consideration of their opponent’s needs. Distributive strategies are normally highly competitive with negotiators striving to maximize their returns while minimizing the competitors’ gains. In contrast, the integrative approach seeks out agreements that are mutually beneficial to all parties. Additionally, negotiation courses incorporate knowledge from relevant scholarship, including studies on option invention for mutual gain (Curhan, Neale, & Ross, 2004; Fisher & Ury, 1983); the effect of relationships and emotional and interpersonal skills (Fisher & Ury, 1983; Forgas, 1998; van Kleef, De Dreu, & Manstead, 2004); the approaches, characteristics, and reputations of negotiators (Barry & Friedman, 1998; Glick & Croson, 2001); and the use of reframing to understand negotiators’ perspectives (Cannon, 2017).
Recent critiques of prescriptive negotiation instruction recommend encouraging students to be more reflective of what strategies work in different contexts and their own personal strengths, weaknesses, and approaches; then, using this knowledge to adapt or privilege strategies for the context negotiators are facing (Patton, 2009; Susskind, 2015). Observation and role-play scenarios are considered the most effective instruction methods (Druckman & Ebner, 2013; Poitras, Stimec, & Hill, 2013), wherein “observation” involves students analyzing a negotiation and “role-play” involves students imagining themselves in a position and enacting a negotiation based on their role. For role-plays, students are often provided background information to help them understand the position they are representing. Scholars find that the most effective role-play scenarios simulate situations and objectives that students believe they will encounter in the future (Alexander & LeBaron, 2009; Patton, 2009; Poitras et al., 2013).
With these teaching recommendations in mind, we believe that salary negotiations are prime scenarios for teaching negotiation strategies to students. Yet few pedagogical cases for job offer or salary negotiations are available (Hatch & Hong, 2014; Kolb, 1991; Layng, 2009). Since most students will deal with a job offer near graduation, use of salary negotiation scenarios should increase student engagement. Students should embrace negotiating since a survey of 700 employers (McGurran, 2015b) found that “90% of hiring managers said they had never retracted an offer because an entry-level candidate attempted to negotiate” (McGurran, 2015b, para. 8). However, for such a negotiation to be successful, applicants must be able to clearly articulate what they have to offer the organization and justify their negotiation requests (Foss, 2017; McGurran, 2015a).
Salary Negotiation Exercise Description
The salary negotiation exercise below follows recommendations to use realistic role-plays to teach negotiation skills (Alexander & LeBaron, 2009; Patton, 2009; Poitras et al., 2013). This role-play develops skills in planning, developing, and delivering a salary negotiation plan to maximize salary potential or reduce salary exposure depending on the role. This lesson provides students a theoretical understanding of the negotiation process and develops tangible skills that students can use immediately while allowing development of communication skills and emotional intelligence.
The exercise below provides students practice with the following learning objectives (LOs):
Understanding the basic principles, theory, and practice of ethical professional negotiation
Analyzing and adapting negotiations based on new information revealed by other negotiators during negotiations
Differentiating between effective negotiation techniques to support negotiation strategy
Critically listening to and evaluating business negotiation arguments
Maintaining goodwill with the opposing party while simultaneously working to achieve their independent objectives
The lesson includes a written and an oral deliverable and is appropriate for nearly all upper level university business courses. The case can be taught in approximately two 50-minute class sessions, following instruction on a combination of at least two of the following three topics: negotiation principles, interpersonal communication, and college-to-career and job search information. The written and oral portions are expected to require 3 hours of student preparation outside the classroom.
The materials needed include only the Perspective Summaries for the applicant (Appendix A) and the employer (Appendix B). Access to David Hames’s Negotiation: Closing Deals, Settling Disputes, and Making Team Decisions (2012) would be helpful but is not essential as other negotiation texts could be used. Appendix C provides some negotiation terms that may be useful to faculty and students.
Lesson Plan Instructions
Introduce the Assignment (Complete in the First 50-Minute Class Session)
10 minutes: Explain assignment and respond to procedural and plan development questions.
5 minutes: Assign half the class the role of the employer and the other half the role of the applicant with the understanding that they will negotiate with their assigned partner during the following class period. If an odd number of students exists, assign the employer role to the final student. Provide students with only the perspective summary for their assigned role. (A Best Alternative to Negotiated Agreement is provided in each summary, but it may be omitted or included by the instructor depending on the amount of scaffolding the instructor deems necessary.)
Homework
Assign students to write a pre-negotiation plan (Appendix D) considering goals, potential issues and concerns, alternatives, and other negotiation facets so that they have an effective plan for their argumentation. While the necessary salary compensation parameters are set within the perspectives, encourage students to research job market conditions, expectations, and standard benefit packages for financial analysts in the area. Compensation package information is available at ONet Online (www.onetonline.org) and Glass Door (www.glassdoor.com). This information provides context to the negotiation scenario and additional information for students to use in formulation of argumentation. Ask students to bring two printed copies of their pre-negotiation plan to class—one for the professor and one for use during the role-play.
Negotiation Role-Play (Complete During Second 50-Minute Class Session)
On entering class: Students submit one copy of their pre-negotiation plan to the instructor for assessment and keep one copy to use during their negotiation.
5 minutes: Arrange students in pairs: employer and applicant. If an odd number of students exists, two students can serve as the employers while the third student acts as the applicant. Alternatively, the professor can stand in as needed.
30 minutes: Ask students to engage in negotiation role-play and come to an agreement. Depending on class size, student pairs may need to leave the classroom so that they can hear one another during the role-play.
Ask students arriving at a mutually agreeable solution to write a summary of the agreement addressing the following: Compensation, Benefits, and Unanticipated Benefits (any benefits, compensation, or other perk that the student capitalized on but did not envision during planning).
15 minutes: Through whole-class discussion, debrief the negotiation process, focusing on the effectiveness of chosen strategies used by students.
Debriefing and Assessment
Movius (2008) found that participants who were instructed to focus on practicing and developing skills achieved more effective outcomes than participants who were tasked with securing the best outcomes—suggesting that emphasizing and assessing the process, rather the product, results in better knowledge and skill development. As a result, we recommend that the pre-negotiation plan be formally assessed and the role-play enactment be informally assessed through oral debriefing. A written reflection, based on the recommended discussion questions, could be assigned by the instructor for submission after the role-play.
When assessing the pre-negotiation plan, consider its clarity and thoroughness in analyzing the situation, planning approaches, and developing clear standards for acceptable outcomes (a sample rubric is provided in Appendix E, Table E1). A successful pre-negotiation plan demonstrates the students’ understanding of the basic principles, theory, and practice of ethical professional negotiation (LO 1) and their ability to differentiate between effective negotiation methods and techniques to support a negotiation strategy (LO 3). Students should be able to clearly establish target and reservation points, goals for all involved parties, and potential challenges or opportunities—and then develop strategies for success.
Assessment of the role-play is primarily completed through a whole-class debriefing discussion with oral feedback from the instructor and classmates. Throughout the discussion, the instructor prompts students for input on their effectiveness in analyzing and adapting their strategy based on new information presented by negotiators during the negotiation (LO 2), critically listening to verbal and nonverbal communication during the negotiation (LO 4), and maintaining goodwill with their negotiation partner(s) (LO 5). Starting questions for this discussion could include the following:
How well did your pre-negotiation plan prepare you for the role-play? How and why did you adjust your strategy during the role-play? (LO 2, LO 4)
What strategies were used effectively or ineffectively to move toward an agreement? (LOs 1-5)
What issues arose during the negotiation? How were these issues managed? (LOs 1-3)
How successfully were emotions and nonverbal cues managed and goodwill developed? (LO 2, LO 4, LO 5)
How many pairs successfully hired Sam? How many did not? Why?
What would you do differently when negotiating your own salary?
Encourage students to discuss the strategies that their partners used successfully or unsuccessfully and to provide feedback to others. Instructors may select specific student pairs to discuss how they reached their agreement. There are many possible successful solutions to this negotiation, including integrative, distributive, and hybrid agreements. Therefore, if the basic parameters in provided perspectives are followed, there are no “wrong” answers.
Developing a pre-negotiation plan is important for demonstrating an understanding of basic negotiation principles and showing the ability to differentiate between effective strategies and approaches (LOs 1 and 3). However, all successful negotiations and interpersonal interactions require the ability to adapt to new information and the behavior of others (LOs 2 and 4). Effective negotiators also need to maintain goodwill with their partner(s) during a negotiation (LO 5) so that they can maintain positive reputations and ensure productive future interactions. In a job offer negotiation, maintaining goodwill is essential as negotiators may become coworkers; alternatively, if an employment agreement is not reached, negative interactions could harm the reputation of the company or the candidate. Although we recommend that only the written product be graded, enacting the role-play is important for fully achieving the proposed learning objectives. Completing both activities also provides students a more authentic experience to reference when preparing for their first job offer negotiation.
Conclusion
Salary and job offer negotiation role-plays provide students opportunities to develop skills in negotiation and business communication. While a survey of employers found that 74% of employers are able to improve their first offer, the same survey found that only 38% of graduates attempt to negotiate (McGurran, 2015b). Exercises like this role-play can boost students’ confidence for negotiation broadly and for job offer negotiation specifically.
The combined use of the written pre-negotiation plan and the interactive role-play gives students an opportunity to apply negotiation, persuasive, and interpersonal communication skills. Through the pre-negotiation plan students develop an understanding of basic negotiation principles and gain practice determining which strategies prove most effective. To fully understand the effectiveness of a given strategy, students must practice enacting their strategy. Through the role-play, students develop skills in adapting their strategies as they learn more from their negotiation partners. The role-play provides an opportunity for students to practice maintaining goodwill while attempting to negotiate an agreement that is most beneficial. Importantly, the job offer negotiation role-play provides students a low(er)-stakes opportunity to practice skills essential to their professional development.
Footnotes
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.