Quote:
Originally Posted by cwar
Is there any merit to making an offer and sticking to it? Like Im envisioning an example with employer and employee I feel like that would be really powerful in a raise negotiation particularly if its in the high but reasonable territory.
Like for example say I have a solid employee who is asking for a raise. I am able to give 15% total and the employee opens by asking for a 15% raise. I open by offering 8% and the employee just says "no 15% is a fair offer." I think that is a really difficult position to be in as the employer because 10% will likely be turned down and 12% seems like I am nit picking and could be easily countered be standing at 15%. Thoughts?
That's a special situation that doesn't really qualify as a negotiation imo. Most transactions aren't actually negotiations. If you have a powerful position that generates a situation where you can get your terms met 100% of the time then you're using what I call the "Warren Buffett school of negotiation". Basically Buffett comes in and makes a solid if more than fair to himself offer- and he never ever budges. This take it or leave it approach works fairly well when you're negotiating from a position of strength.
It is important to note that this only really works if you actually mean it when you say 'take it or leave it'. If you don't it's counterproductive.
My problem with this approach is that if 15% in this situation is a fair offer- then the employee may be leaving money on the table by not starting at 20% and negotiating down. If he could have gotten 16% he's actually giving up a lot of money imo.
EDIT: In other words 'take it or leave it' is a double edged sword. If they take it there is at least some % chance that you could have done better by going through a more organic price discovery. As the employer if the employee makes a reasonable offer that is under the max I would pay him then I win already
. Obviously this is the case because any number that is <than the number I would rather lose the employee than pay is a win for the employer.