How to Negotiate the Salary Using the Power of the Norm of Reciprocity

An employee negotiating his/her salary may often feel a complete lack of bargaining power. If the employee lacks alternative jobs, and thus cannot make a credible threat to quit or take another job, it is easy to feel that the offer made by the employer is a take it or leave it offer which the employee cannot influence at all.

The employee or job seeker can however take advantage of the laws of human nature to increase his/her leverage when negotiating the salary. One of these laws says that every human being has an interest in being recognized as a worthy member of society. The only chance to be recognized as such a member is to show that one is willing to comply with the basic norms of society. Not to comply with these basic norms is to put oneself outside society, a condition that is unbearable to most people.

The most fundamental norm of society is the norm of reciprocity. According to Wikipedia, the norm of reciprocity is “the social expectation that people will respond to each other in kind — returning benefits for benefits, and responding with either indifference or hostility to harm.”

The power of this norm can be felt in most bargaining situations. Assume a buyer and a seller are haggling over the price of a car. The seller starts out with a bid at $24,000. The buyer finds this offer unacceptable and makes a counter bid at $15,000. Now, the seller lowers his bid to $20,000, i.e. he makes a concession. In this case, the buyer will most often feel inclined to increase his bid, maybe to $17,000. The reason why the buyer will feel this inclination is because of the presence of the norm of reciprocity. This norm now demands that the buyer responds to the seller’s concession with another concession.

The norm of reciprocity is so powerful that it can be taken advantage of in almost any bargaining situation, even by a party that otherwise completely lacks leverage. This norm is a most powerful ally to the employee or job seeker negotiating his salary – if correctly appealed to.

The norm of reciprocity will only work if it is very clear that the employee makes a concession or gives something away to the employer. This can be made in several ways. If, for example, the employer has worked over time for months without any compensation, he can say “I really do like this work. That is the reason why I have spent hours and hours of overtime here. I think it is only fair that I get some kind of compensation for my efforts for this company.” Another way is to start out the salary negotiation by making a high but reasoned salary claim, from which a concession can be made in the next round.

With the norm of reciprocity in his toolbox, the employee or job seeker negotiating his salary will have dramatically increased his leverage.

3 Tips For CIOs To Become Better Negotiators

It’s interesting to realize just how important the skill of negotiating is to CIOs. Sure, we all know about the importance of information technology, but when you think about it, we spend a great deal of our time negotiating no matter if it is with vendors, other departments, or even members of our IT team. Since we do so much of this, we should always be looking for ways to get better at it…

3 Ways To Become A Better Negotiators

First off, when we dive into a negotiation be it with a vendor or with someone who works for our firm, all too often we just start things off with a vague idea about what we’d like to accomplish. We know that we need to create a deal, but we’re not 100% what that deal is going to look like. However, we believe that we’ll recognize it when we see it.

What this mean to you as the person with the CIO job is that before your next negotiation starts, you really need to do some homework. By taking the time to prepare for a negotiation, you’ll have an advantage over the person that you’ll be negotiating with. Doing your homework can be as simple as coming up with a plan for what you want to propose to the other side. When you do this, the next step is for you to highlight the key details in your plan that you want to make sure that are part of the deal that you reach.

When we are negotiating with someone, all too often it can be easy to assume that they have more power than they really do. They may represent a big company or a powerful internal department. We need to take a step back and realize that they are just a peer – no more, and no less. If you can see them as someone just like you, it can remove a great deal of the intimidation that they may be presenting to you and you can focus on getting what you want from them.

Finally, don’t worry if what you are asking for has never been done before. Hey, there always has to be a first time, right? Make your case and explain to the other side how things will work. If they still seem nervous about agreeing to a deal, you can create checkpoints that will allow them to determine if the deal is being implemented in the way that they agreed to.

What All Of This Means For You

At the heart of what it means to be in the CIO position is the ability to communicate well. One form of communication that we all need to take the time to master is that of negotiation. Since we negotiate so often and with so many different types of people we need to get better at doing this.

There are three ways that we can become better negotiators. The first is to make sure that we always show up prepared to negotiate – we need to do our homework. Make sure that you see the person that you’ll be negotiating with as a peer – they do not have any special powers. Finally, just because something has never been done before does not mean that it can’t be done now.

As a CIO, you never seem to have enough time to get everything done. When you are trying to decide where to spend your time, learning to become a better negotiator is one thing that will be on your plate. Among all of the other things that you have to do, this is a good way to spend your time. Time spent becoming a better negotiator is time well invested.

Your Present Credit Card May Not Be Suitable While Traveling Abroad

When you travel abroad, credit card is the most effective method of carrying money which you. However, your present card may not be financially convenient for such use. Check on these important tips to get the things right -

1. Inform your card company about your travel as a precaution – If the card company sees use of your card at a strange place, it may suspend your account and will try to contact you. In the possibility of no contact, the credit card will remain suspended. You will never know why your credit card is refused and with this first jerk in your travel, you will have to run around for arranging money! It takes only a phone call to inform your credit card company about your travel plan.

2. Check the acceptability of the card – You should ensure that your card will be accepted in the region where you are traveling.

3. Read the cardholder agreement carefully – You should understand the fine print in the agreement. You may not have the agreement in the first place and will have to call your card issuer to get a copy. You can clear all the uncertainties about the transactions abroad.

4. Ask all your doubts to their customer service representative – This is very important because it will give you confidence while using the card abroad. There will be certain amount fees which your card issuers may charge. There may be huge fees for withdrawing cash from ATMs abroad. There is no use asking these questions when you come back. You should also know what to do when your card is lost. Also, make sure about the cover your card issuer is offering for fraudulent transactions.

5. Understand the rate of exchange – You should be clear about the basis on which your company will charge you for conversion of currency. This is a common mistake by most of the international travelers because spending becomes very expensive on an adverse rate of exchange.

6. Carry with you the contact numbers of customer service – If anything goes wrong, you should have a number to call to your card company to get help. The normal number which you use regularly may not be useful for international calls.

7. Check the expiry dates – You should check the date of expiry of your card and the limit available to you on the card. You cannot increase the limit while you are traveling.

8. Preserve all the receipts – If you are overcharged in a particular transaction, you should be able to produce a receipt is to your card company so that you can prove the details.

9. Always check carefully any bill before you sign it. If the bill is in US dollars, you may ask for the bill in the local currency of that country.

If you feel that the present card will prove expensive and inconvenient, you can switch to another card temporarily. It is very convenient feeling to swipe your card while traveling overseas, but when you come back and receive a statement from your card company, the shock should not spoil your entire travel pleasure.

Traveling abroad with ‘loaded’ credit cards is everybody’s dream. But with exorbitant fees and conversion charges, the trip may leave a bitter test at the end. How to avoid it? Well you can do it very easily. Chintamani Abhyankar provides useful tips and advice on precautions while using your credit card abroad.