How to navigate the negotiation process at work in 6 steps
By Indeed Editorial Team
Published 22 April 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
There are many situations where you might negotiate at work, no matter your role. This may include negotiating salary, position or with a client. Negotiation is a collaborative effort that has the goal of getting both parties to a solution they agree on. In this article, we describe what negotiation is, explain the process and provide tips for negotiating at work.
What is the negotiation process?
The negotiation process is the act of compromising to come to a mutual agreement. It happens when parties that are in disagreement make concessions so they can reach a compromise that benefits all involved. At work, you can create an agreement between multiple parties for things like updating pay, settling complaints and resolving conflicts. You may negotiate with your boss, co-workers, departments or clients. Understanding how to negotiate and the different styles of negotiation can help you succeed in your career.
Different types of negotiation
The five main types of negotiation are:
Distributive negotiation: When two parties negotiate over a single issue, for example, price or salary. This type of negotiation is also called hard bargaining and one party always walks away with a better deal.
Integrative negotiation: When two parties engage in an interactive negotiation that includes discussing, arguing, presenting and convincing. In the end, both parties are happy with a win-win situation.
Multi-party negotiation: When three or more parties are engaged in an integrative negotiation and all parties must agree before they reach a decision. For example, choosing a new type of writing software for a company must satisfy all departments in the company.
Team negotiation: When the negotiation process takes place between two teams, like in a business merger. The people on the negotiation team have excellent conversational skills and strategic thinking.
Positional negotiation: When one party has a fixed opinion, which they defend against the fixed criticisms and opinions of the other party. Neither side gives in, and the process is unproductive.
How to navigate negotiations at work
Here are the six steps you can use to navigate negotiations at work:
1. Plan and prepare
Planning and preparing is the crucial first step in a negotiation process. To prepare, study both sides of the argument to determine your position and understand the position of the other team or person. Decide what your desired outcome is and any concessions you can make to achieve that outcome. Think about your relationship with the opposing party or person and how the negotiation process can affect or change the relationship. The final part of preparing is to decide on the ground rules for the negotiation, such as where it will take place, time constraints and other factors.
2. Have open discussions
Now it's time for the actual communication part of the process, where each party explains their perspective and initial concerns. While one party explains, the other listens actively without interrupting. This can be the longest part of the negotiation process as each side provides their opinions, concerns and interests.
3. Clarify goals
After each side explains their position, it's time to clarify any points. This is a chance for the opposing side to ask questions about your goals to help them deepen their understanding of your point of view. Clarifying goals helps both parties avoid disagreements in the future. After this step, both parties understand exactly what the other party is looking for. Also, if one side disagrees with a goal or point at this stage, they can further discuss it calmly before moving on to the next step.
4. Bargain and problem solve
Now that both sides understand each other's positions, it's time to bargain and reach an outcome that benefits both sides. Through a series of offers and counteroffers, both sides work together to come to a result both parties are comfortable with. During this step, it's important to keep emotions out of the bargaining process. Also, both sides may have to make concessions to reach a conclusion suitable for both parties.
5. Agree and conclude
First, both sides thank each other for the discussion, no matter the outcome. Once negotiations are over, both sides create a final agreement. The agreement considers each party's desires, motivations, interests and goals. Ensure the agreement is extremely clear, so there are no misunderstandings regarding each party's responsibilities and gains. Usually, the parties make the agreement formal by creating a written contract.
Sometimes the parties can not reach a decision both are happy with and may decide to try the negotiation again later on. It's important to wait a few days before attempting to negotiate again. This way, both sides can think of alternative solutions and come back to the negotiation with a fresh perspective.
6. Implement a plan
Once both parties complete the agreement, it's time to implement the plan both sides negotiated. For example, if negotiated a new salary for your job, you may receive the salary you agreed upon and in return fulfil all the requirements necessary for that salary. A plan can include a timeline, responsibilities, goals and, if applicable, a budget.
Tips for negotiating at work
Knowing how to negotiate at work is important for maintaining a positive working relationship with the other party. Follow these steps to effectively negotiate at work:
Practice active listening
Active listening means giving a person your undivided attention when they are speaking. To show you are actively listening, look the person in the eyes, exhibit proper body language, nod your head and ask appropriate follow-up questions. Active listening shows your engagement in the conversation and allows you to reflect on what the other person is saying so you can respond appropriately.
Knowing exactly what you want before going into a negotiation means that it may be easier for you to communicate your desires to the other party. Be prepared for a variety of responses the other party may have, so you can decide how you may respond to these potential responses. Practice what you might say before the negotiation to increase your confidence so you have a better understanding of what you can and cannot compromise on.
Be prepared to answer tough questions regarding your position. The other party may want to know more about what you want and why they need to make concessions to accommodate your plan. Think of potential questions in advance and create sufficient answers.
Take your time
Take your time during the actual negotiation. When you are in a rush, you are more likely to make mistakes and give unnecessary concessions. Having patience shows confidence and respect for the other party. Plus, taking your time can convince the other party you're sure of yourself and prepared for the meeting. Also, go into the process understanding that follow-up negotiation may be necessary to clarify all details.
Understand the person you are negotiating against and how you can tailor your conversation based on their personality and conversation style. For example, if you are negotiating with a person who is a visual learner, incorporate graphs or visual data into your presentation. Good communication during a negotiation means you're brief, clear, take action to understand the other person and openly answer questions.
Related: A guide to the 7 Cs of communication
The best way to negotiate is in a calm manner. Try not to allow yourself to become upset during negotiations if things are not going your way. Stay professional and remember what you hope to gain from the negotiation process. Remain calm when answering the questions and remember that the other party is not attacking your position. They just want more details. Giving confident answers assures the other party that you have a good plan prepared.
Make a definitive decision
Sometimes negotiating requires a lot of give and take, and eventually, each party realises when they have reached the best agreement for both parties. This is after both parties make concessions and ask the requirements of the other party. It's important to realise when each party has made enough concessions and requirements. Knowing when to stop negotiating keeps things clear and professional.
Think of the other party
Understanding what the other party wants can help you with the negotiation process. It's important to show empathy regarding the other party and their desires. It promotes a collaborative environment when you show interest in what the other party wants. If you understand the other party's goals and objectives, you have a better idea of what to offer.
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