Overcome Gendered Stereotypes on Negotiating

“View differences as opportunities. Negotation is an opportunity to expand the pie.”

In 2005 when Harvard University’s then-president Larry Summers suggested that women had less intrinsic aptitude in science, he set off a firestorm that contributed to his departure. But instead of leading women to doubt their abilities, his comments had the unintended effect of motivating women to react against them.

That fits with research done by Dr. Laura Kray, associate professor of business administration at the school of business at the University of California at Berkeley, whose doctorate in social psychology provides a lens for her work on gender and negotiations.

Her studies have found that when women are blatantly told that they are at a disadvantage in negotiating, they are motivated to react against the stereotypes and outperform men—but only if they believe that negotiating skills can be learned.

Those women who believe negotiating skills are inherent—and receive subtle negative messages about women’s poor negotiating abilities—perform less well, behaving consistently with the stereotypes.

This means that we can best serve women by explicitly exposing the gender stereotypes around negotiating, explaining that negotiating skills can be learned and teaching women how to arrive at the negotiating table armed and ready. “Negotiating seems to be shrouded in mystery,” Kray told WIHE. “This gives women a practical approach to doing it.” She led a session on negotiating at the Northern California Network meeting of ACE’s Office of Women in Higher Education in May in San Francisco.

Frame the situation

What is negotiation? Kray defines it as “a decision-making process by which two or more people agree how to allocate scarce resources.” During the negotiating process, we take information from the other party and determine how to satisfy the other party’s needs—to get what WE want. Negotiating is not a debate, where you might either convince another party of your position’s value or give away information.

Negotiation skills are especially important today, said Kray, because we now act as free agents. There are more entrepreneurs than in the past, and more job mobility and competitiveness. Negotiation is an effective means of using influence and power, whether managing upward or downward. When it’s done right, it increases satisfaction for all parties.

Kray has found a link between gender and perceived negotiator effectiveness. Traits associated with an effective negotiator include being strong, dominant, assertive and rational, attributes usually associated with males. Ineffective negotiators are weak, passive, accommodating and emotional, attributes often associated with females.

When an MBA sample was asked “Who has the advantage at the bargaining table?” 48% responded “men,” 32% responded “women,” and 20% responded “neither.” The reasons for the responses were consistent with gender stereotypes: men are strong, aggressive, experienced and unscrupulous, and women are tuned into feelings and seek protection by men.

There may be some truth to these beliefs. On average, men tend to behave more competitively and to reap better outcomes than women do in negotiations. In an aggregated division of the bargaining pie, men’s share is slightly bigger. Does this stem from innate differences, discrimination or socialization?

Small differences matter, said Kray. Picture two 30-year-old MBAs, one female and one male, who are each offered $100K salaries after graduation. The male negotiates the offer to $111,000. The female accepts the first offer at $100,000. Assuming a 3% raise per year until retirement at age 65, their salary differential becomes $30,953. But assuming a 5% rate of return on investments made in the “extra” yearly income of the higher salary, the initial $11,000 differential grows to $1.6 million by retirement.

Small differences accumulate and grow over time.

Avoiding stereotype threat

Stereotype threat is when the gender stereotype itself becomes an entity—it takes on a life of its own. It’s most likely to affect members of negatively-stereotyped groups (women) who are highly capable and who identify with the task. They are most vulnerable during highly competitive negotiations that are perceived as diagnostic of inherent abilities.

The threat affects the bottom line by distracting women, who worry about confirming the negative stereotype—so we lower our aspirations. This leads women to perform in a manner that is consistent with the stereotype.

What skills make a good negotiator? Kray lists:

  • preparation and planning
  • knowledge of the subject being negotiated
  • the ability to think rapidly and clearly under pressure and uncertainty
  • the ability to express thoughts verbally
  • listening skills
  • judgment and general intelligence
  • integrity
  • the ability to persuade others
  • patience
  • decisiveness

Preparation is crucial. In a negotiation, half of the work takes place before you even get to the bargaining table. You need to: identify and develop alternatives, put yourself in the shoes of your negotiating partner, determine your goals and your “walk away” point, plan your opening move, build confidence in your ability and learn to love the game.

In order to succeed in negotiations, Kray said to determined these key points for yourself:

  • Target point (your optimistic but realistic goal)
  • Reservation price (your bottom line)
  • Best alternative to negotiated agreement (BATNA)
  • Bargaining zone (the zone of possible agreement). It’s positive if the rational outcome is an agreement or negative if the rational outcome is an impasse.
  • Bargaining surplus (“the pie”)
  • Negotiator’s surplus (your pie piece)

Dealing with offers

First offers tend to be highly predictive of final agreements. The best way to predict an agreement value, said Kray, is to determine the midpoint of the first offer and the first counteroffer (if both are within the bargaining zone). You should make the first offer if it serves as an anchor for the negotiation. But it’s disadvantageous to do so when the other negotiator has more knowledge of where the bargaining zone lies (the winner’s curse).

You can adjust your mindset to improve performance and satisfaction. Start by setting an aggressive target value and bottom line before the negotiation. During the negotiation, focus on the target, rather than the bottom line. This will improve performance. After the negotiation, focus on the bottom line, not on the target, to improve satisfaction.

Because people expect a back-and-forth dance during negotiations, allow yourself room for concessions. To save face, develop a rationale around each concession. Because responding in kind to others’ behavior is a basic norm of human interaction, reciprocity is critical.

Make bilateral, not unilateral concessions, and don’t reward obstinate behavior by making concessions. This applies to information and offer exchange, and to self-disclosures. Remember that information is embedded in concessions, and that concessions get smaller as parties get close to the reservation price.

Biases in negotiations

Be aware of biases in negotiations, which can include:

Anchoring bias. Big numbers can make everything look different. Even professional real estate agents can be influenced by the asking price in assessing a house’s value; experts are distinguished from novices through their denial of this influence.

Midpoint bias. Meeting in the middle can lead to overpayment if the endpoints are false. This signals “satisficing,” or that negotiations have finished prematurely

Framing effects. If an offer is framed in terms of gains, there are fewer impasses, greater concessions and more integrative outcomes.

Expectations shaping willingness to pay. How much would you pay for an ice cold beer on the beach from a 7-11? How much for one from the Ritz-Carlton? People are willing to pay 77% more for a beer from the Ritz. Use this knowledge by choosing advantageous reference points.

Major traps in negotiation include: settling for too little (winner’s curse); settling for terms that are not as good as your next best alternative (incurring agreement bias); walking away from the table (succumbing to hubris); and leaving money on the table (a lose-lose negotiation).

To claim value, know your BATNA and predict your partner’s BATNA. Strengthen yours whenever possible. Highlight its strengths, but don’t provide specifics. Define your reservation price, but don’t reveal your bottom line—unless it’s what you’re prepared to get. Inflating a reservation price, however, leads to inefficient outcomes.

Define your aspiration level, and ask for it. Focus on your strengths, but also be aware of your weaknesses. Be optimistic, but also realistic. Have aggressive goals, but not aggressive behavior.

To combat negotiating biases, make aggressive opening offers. Frame them in terms of gains to the other party. Be wary of offers that “split the difference.” Choose advantageous reference points, and develop reciprocity.

Claiming vs. creating value

Know the difference between claiming value versus creating.

  • Claiming value sees the negotiation as a win/lose situation for the person, who searches for solutions that meet their own needs. Creating wants a win/win situation, and searches for solutions that meet both parties’ needs.
  • Claiming conceals information, or uses it selectively and strategically. Creating value shares information openly.
  • Claiming focuses on positions; creating on interests.
  • Claiming focuses on a single issue; creating on multiple issues.
  • Claiming is competitive, like a poker game. Creating is cooperative, like working a crossword puzzle jointly.
  • Claiming is more conducive to short-term relationships, while creating is effective for long-term relationships.

There are multiple issues and alternatives, and differing interests, attitudes (risk and time), strengths of preferences and expectations.

To improve negotiating ability in women and level the proverbial playing field, we need to challenge assumptions and teach women that gender differences are a product of stereotypes and not innate, said Kray. Women need to know that a failure to acknowledge gender actually perpetuates the performance gap. We need to assume that everything is negotiable, and adopt the view that negotiating is not an innate skill.

“The message is that it’s the set of beliefs that you bring to the table that are the primary determinate of how well you perform, not your innate abilities,” Kray told WIHE.

Can-do attitude

To build confidence before a negotiation, give yourself a pep talk. Focus on the value of the feminine traits and the commonalities between people that transcend gender. Instead of expecting differences, make a list of some things you and the other negotiator have in common: age, income level, field, common goals, etc.

“Psych yourself up,” Kray told WIHE. “It’s having a can-do attitude and not being undermined by the subtle belief that because you’re a woman you can’t do this effectively.”

Do your homework and develop alternatives, set aggressive goals and put yourself in your negotiating partner’s shoes. Above all, learn to love the negotiating game.

Contact Laura Kray at
kray@haas.berkeley.edu

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