Asking for a specific and precise dollar amount versus a rounded-off dollar amount can give applicants and employees the upper hand during any negotiation over salary says a new Columbia Business School study.
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Get Your Report Now!The research study, Precise Offers Are Potent Anchors, was conducted by Professors Malia Mason and Daniel Ames and doctoral students Alice Lee and Elizabeth Wiley.
The results of the research showed that overall, people making an offer using a precise dollar amount such as $5,015 versus a rounded-off dollar amount such as $5,000 were perceived to be more informed about the true value of the offer being negotiated. This perception, in turn, led precise-offer recipients to concede more value to their counterpart.
"What we discovered is there is a big difference in what most people think is a good strategy when negotiating and what research shows is a good strategy," said Professor Mason. "Negotiators should remember that in this case, zeros really do add nothing to the bargaining table."
In their negotiation scenarios, the professors concluded the person making a precise offer is successfully giving the illusion they have done their homework. When perceived as better informed, the person on the opposite end believes there is less room to negotiate.
"The practical application of these findings--signaling that you are informed and using a precise number--can be used in any negotiation situation to imply you've done your homework," Professor Mason concluded.