The Secret to Negotiating a Higher Salary
A study found that when negotiating pay, presenting a range is better than a single figure.
When asking for a raise or negotiating a salary for a new job, give your employer a salary range, rather than a single figure. That's the takeaway from a new study by two Columbia Business School researchers, who found that the range option typically results in a higher salary than the single figure approach.
Daniel Ames and Malia Mason of Columbia Business School noticed that for all the studies of salary negotiations, few have addressed the "range versus single figure" question specifically. In order to change that, they conducted a series of fake negotiation experiments. Participants were asked to guess their partner's "reservation price," or the lowest the partner would go. They were also asked how they perceived their negotiation partner throughout the process.
The experiments showed that those who presented their salary demand in the form of a range not only received higher overall payment than those presenting a single figure, they were perceived as more likeable, too. The lesson? Next time you are involved in negotiations for your salary, keep this mind. If you want to get paid $60,000 a year, you're better off asking for between $60K and $65K than flat out asking for $60K. Your boss is less likely to go lower when there are parameters already laid out.
Article was written by Chris O'Shea for SavvyMoney®.