How to Get Them to Show You the Money

It's Not Personal -- It's Strictly Business

Negotiations can get emotional. But you need to remind yourself that they're about business. It's natural for someone to try to save money, so don't let that attitude be a startling revelation when you walk in to negotiate. And remember, money doesn't reflect your worth as a human being, your value, or whether you live an ethical life.

I know this kind of thing as an employer. When it comes time for me to talk to my employees about compensation, the same thing always happens. After I've rationally figured out a fair salary for someone, and then added a little more for motivational purposes, I sit down with that employee, and inevitably he starts with a figure far above what I've conceptualized. Now, it makes no sense for me to sit there and feel grossly offended. I have to remember that this person's expectations aren't grandiose. From his point of view, what he's asking for probably makes a lot of sense.

That person may not even be saying that he really needs all that money. He may be saying that he needs more recognition. There are all sorts of things that a person may want to say, but those things are usually manifested as demands for more money.

It's Not about What's Fair

There are jobs that are so much fun that you would pay your boss to let you do them! But you can't allow the discussion to turn on your personal circumstances. The real question is, What is the market value of what you do?

I recently negotiated a contract for Ryan Leaf with the San Diego Chargers. As a student last year, Ryan had been living on scholarship money at Washington State University. At a certain point in the negotiation, the Chargers' general manager turned to Ryan and said, "How can you ask for so much? You're going to be rich under any circumstances. All we're talking about is how rich you're going to be."

There's some truth in that. But there's also truth in the fact that professional football generates tremendous revenue, and that players take enormous risks. I ended up getting Ryan Leaf $11.25 million as a signing bonus. But I could never have done that if the focus had been on how much he liked to play football or on how little money he had made at college -- because the truth is, he might play football for nothing. That is a very important truth, but it's got nothing to do with what's fair in the world.

Never Split the Difference

There are many ways to negotiate. The reasonable-person theory says that a reasonable person ought to ask for money or conditions that are very close to what he actually wants and that are close to what is fair. The problem is that those two things are often very different. If the market value for a service is $100,000, and the employee asks for $500,000, and the employer offers $95,000, then splitting the difference makes no sense. In a situation like that, if you simply split the difference, you'd end up with a bizarrely unfair result. At that point, the employer has to assume that he's not dealing with a serious negotiator, because there's no validity to the $500,000 request.

The Sad Truth of the Inevitable Fudge Factor

In most one-on-one negotiations, in which there are no other parties who might be interested in bidding on your services, my suggestion is that you start by making a proposal that is reasonable -- but that has some fudge factor to it. It's a sad aspect of human nature, but it's a fact life: We don't feel satisfied unless we've gone through a process that involves bargaining back and forth. All human beings like to feel some sense of achievement. They want to feel that they've won something. And they also like to justify the time they spent in the negotiating process. So you've got to play the game: Your first proposal needs to be higher than what you would ultimately take.

How to Deal with Deadlock

There is an absolutely predictable point in all negotiations when you appear to be deadlocked. And the question arises: Now what? First, when you're preparing to negotiate, you should assume that this moment will come sooner or later. When it does, don't be surprised, and don't get frustrated. Simply assume that in any negotiation process, a schism, a chasm, a seemingly unsolvable problem will occur. Second, the key to getting through that situation is emotional resilience. You have to face the seemingly impossible deadlock, and then step back -- for five minutes, for an hour, or for a couple of days. It could involve simply taking a short break, going for a walk, or moving away from the point that's produced the deadlock, or it could involve shifting to a new setting and changing the context of the negotiation.

When you and the other party get back together, you'll both return with new and creative ways to solve the problem. Both sides can use the break to refocus on the value that they offer each other. They can stop focusing on the specific issue that they're deadlocked over and instead start focusing on the valuable end point of the negotiation: Someone will have a job that he loves, and someone will have an employee whom he will treasure. The goal should be to get back to the original purpose of the negotiation.