Negotiations, Women and BATNA

“Men ask, Women don’t ask”

-Linda Babcock

Sometime back a research was done on sample group consisting of both genders. The participants were told that they would be observed playing a word game and that they would be paid between $3 and $10 for playing. After each subject completed the task, an experimenter thanked the participant and said, “Here’s $3. Is $3 OK?” For the men, it was not OK, and they said so. Their requests for more money exceeded the women’s by nine to one.

Linda Babcock who is professor of Economics at Carnegie Mellon University feels that women are more reluctant to negotiate than men. She traces this to their upbringing and social norms.

“Women often are socialized from an early age not to promote their own interests and to focus instead on the needs of others. The messages girls receive—from parents, teachers, other children, the media, and society in general—can be so powerful that when they grow up they may not realize that they’ve internalized this behaviour, or they may realize it but not understand how it affects their willingness to negotiate. Women tend to assume that they will be recognized and rewarded for working hard and doing a good job. Unlike men, they haven’t been taught that they can ask for more”

-Linda Babcock.

She has written a book – Why Women Don’t Ask, in which she urges women to negotiate and get what they are worth, they should not settle for less. By not negotiating they are compromising on their future earnings and this financial loss is big.

“When a better offer comes along, women may take it and quit rather than using it as a negotiating tool.”

-Linda Babcock

Fisher and Ury have come up with few ideas on how to negotiate. They coined the term BATNA, short form of Best Alternative To a Negotiated Agreement.

A person’s BATNA refers to what they can fall back on if negotiation proves unsuccessful ex. you are negotiating for salary of 75 lakhs, you already have an offer of Rs. 60 lakhs from another organisation, then if negotiation with current party fails, you will take offer of Rs.60 lakhs, so your BATNA is Rs. 60 lakhs. What if you have no offer in hand? Then BATNA here is wait for some time till you get another offer.

If you BATNA is stronger then you can negotiate harder.

Fisher and Ury have designed a simple process for determining your BATNA-

  1. Develop a list of actions you might conceivably take if no agreement is reached
  2. Improve some of the more promising ideas and convert them into practical options
  3. Select, tentatively, the one option that seems best.

While negotiating you may have certain salary amount in mind, if offered less then you will walk away. This walk way amount is called as reservation price. Similarly, the employer too will have certain amount in mind, if you ask for more she will call off negotiations. That amount is reservation price for employer. Between two reservation prices there is scope for reaching a settlement. This zone, which allows scope for negotiations is called ZOPA or Zone Of Possible Agreement.

If you have good understanding of your and other party’s BATNA, Reservation Price and ZOPA, you can always negotiate a good deal.

 

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