Negotiation Skills: Definition and Examples

CAREER DEVELOPMENT
Negotiation Skills: Definition and

Examples
January 24, 2020
Negotiation is a type of discussion used to settle disputes and reach
agreements between two or more parties. Generally, a negotiation results
in a compromise where each party makes a concession for the benefit of
everyone involved.
Negotiations occur frequently within the workplace and may occur

between coworkers, departments or between an employee and employer.
Professionals may negotiate contract terms, project timelines,
compensation and more. Negotiations are both common and important,
so it’s helpful to understand the types of negotiations you might
encounter as well as how to improve your negotiation skills.
What are negotiation skills?

Negotiation skills are qualities that allow two or more parties to reach a
compromise. These are often soft skills and include abilities such as
communication, persuasion, planning, strategizing and cooperating.
Understanding these skills is the first step to becoming a stronger
negotiator.
The skills you’ll need depend on your environment, your intended

outcome and the parties involved. Here are a few key negotiation skills
that apply to many situations:
 Communication: Essential communication skills include
identifying nonverbal cues and expressing yourself in a way that is
engaging. It is important to understand the natural flow of
conversation and always ask for feedback. Active listening skills are
also crucial for understanding the other party. By establishing clear
communication, you can avoid misunderstandings that could prevent
you from reaching a compromise.
 Persuasion: The ability to influence others is an important skill for
negotiation. It can help you define why your proposed solution is
beneficial to all parties and encourage others to support your point-
of-view.
 Planning: In order to reach an agreement that benefits both parties,
it is crucial you consider how the consequences will impact everyone
in the long-term. Planning skills are necessary not only for the
negotiation process but also for deciding how the terms will be
carried out.
 Strategizing: The best negotiators enter a discussion with at least
one backup plan, but often more. Consider all possible outcomes,
and be prepared for each of these scenarios.
Types of negotiation
Most negotiation outcomes will fall into one of two categories: Win-Win or
Win-Lose. By understanding the different types of negotiations you may
encounter, you can determine the most relevant skills for your role and
work to improve them.
Here are forms of negotiation:
 Distributive negotiations: Also called distributive bargaining, this

form of negotiation occurs when there is a limited amount of
resources and each party assumes if they lose something, the other
party will gain something. Instead of each party attempting to come
to an agreement based on their interests and needs, each party is
working to get more than the other party. For example, a client may
feel if a provider does not lower the price for a service, they will be
paying too much, and the service provider may feel if they decrease
their price, they will losing money.
 Integrative negotiations: Often referred to as a “win-win,” an
integrative negotiation occurs when everyone benefits from the
agreement. In order to come to an integrative agreement, each
party receives some value. The integrative negotiation process may
take longer because both parties have to feel fully satisfied before
coming to an agreement. For example, if a client believes a provider
should reduce the cost of their service to $800, and the provider
believes they maintain the cost of their service at $1000, the two
parties may negotiate to a $900 service. In this case, both parties
“win” $100.
 Management negotiations: Negotiating with management can be
stressful. In some cases, employees may feel uncomfortable sharing
their wants and needs with someone in a more senior position.
However, you’ll often encounter this sort of negotiation during the
job seeking and hiring process. You may have to negotiate your
salary, benefits and job duties. Each of these elements can directly
impact your job satisfaction, so it’s essential to address them.
Additionally, negotiating these factors gives you an opportunity to
demonstrate your communication skills to your employer. You might
also have to negotiate with management in your current position
when re-evaluating your employment contract or requesting a raise.
 Coworker negotiations: Depending on your job, you may have to
negotiate with your coworkers. Many positions require close
teamwork and without strong negotiation skills, you may face
imbalances in work distribution. Negotiation skills allow coworkers to
develop a plan that benefits the whole team. You may also have to
negotiate when solving conflict in the workplace.
 Vendor negotiations: Some employees manage external vendors,
and their performance rating may be affected by how they
negotiate. Also, the ability to reach an agreement with service
providers can affect your professional relationships and general
business success.
Tips to improve your negotiation skills

Not all forms of negotiation are effective, and measuring success can be
challenging. To evaluate your effectiveness, it is wise to identify how well
your intended outcome aligns with the final agreement.
Follow these tips to improve your negotiation skills:
1. Identify the final goal

2. Practice building rapport
3. Be willing to compromise
4. Consider imposing time restrictions
5. Take the multiple offer approach
6. Exercise confidence
7. Don’t take “no” personally
8. Understand your weaknesses
9. Practice
Below are a few ways to strengthen your negotiation skills.
1. Identify the final goal
What are the minimum terms you need? How much are you willing to
negotiate? It’s important you enter negotiations knowing what you want
out of an agreement and how much you’re willing to compromise. For
example, your ultimate goal may be to negotiate a salary of $80,000, but
you would be willing to settle for $75,000.
2. Practice building rapport
Successful negotiation requires you to effectively communicate not only

your own goals, but also to understand the other party’s wants and needs
as well. In order to reach an agreement, building rapport is essential. This
can assist you in easing tension. In order to build rapport, showing respect
for other parties and using active listening skills are critical.
3. Be willing to compromise
Without compromise, it can be nearly impossible to reach an agreement.

By preparing ahead of time, you will already have an idea of the terms
you’re willing to sacrifice as well as the ones that, if they aren’t met, you
would be willing to walk away from the deal.
4. Consider imposing time restrictions
Setting a timeline on the negotiations motivates both parties to reach an

agreement. If terms cannot be met in that time, the two parties can take
time to reevaluate their needs and return at a later date.
5. Take the multiple offer approach
By presenting multiple offers at once, you can save time in the

negotiation process and increase the likelihood that you’ll agree on at
least one of your preferred outcomes. If the other party declines, you can
then ask for feedback on each one and revise terms until you reach an
agreement that meets everyone’s needs.
6. Exercise confidence
It can be challenging to ask for what you want. However, successful

negotiation requires self-assurance. By exercising confidence in your
negotiation, the other parties can be more inclined to believe in the
benefits of your proposal.
7. Don’t take “no” personally
Sometimes, each party’s goals and needs are too different to reach a
compromise. When this happens, evaluate the process, consider why
things that did not go as planned and look for ways you may be able to
improve your efforts next time.
8. Understand your weaknesses
Take time to identify your areas of weakness and focus on growing those
skills. For example, you may need to improve your ability to build rapport
or your power of persuasion. Understanding your weaknesses is the first
step to overcoming them.
9. Practice
One of the best ways to increase your comfort in negotiations is to

practice often. Consider trying a mock negotiation with a trusted friend or
colleague.
How to prepare for a negotiation

Whether you have an upcoming salary negotiation or are planning to ask
for a raise during your next performance review, preparation is key.
When preparing for a negotiation, be sure to identify the following:

 What you want to gain
 Where you are willing to compromise
 Terms you refuse to accept
 Potential objections you may face
 All possible outcomes
By considering this information ahead of time, you will be less likely to

confront something unexpected during your negotiation.
Do your research
Before entering a negotiation, evaluate all parties and consider their

goals. For example, if you’re nearing the end of the hiring process, you
may be preparing to negotiate salary. The employer likely wants to hire
someone who can complete the required job duties for a competitive
salary. You likely want to offer your experience and knowledge to a
company in return for what you perceive to be fair pay.
It can also be helpful to research the person with whom you are
negotiating. Understand the limitations of the negotiator. Do they have
the ability to give you what you want? Sometimes the person you are
negotiating with will be unable to meet your demands. For example, a
hiring manager may have a maximum compensation amount they can
offer based on the budget provided by their department. Understanding
these limitations can help you strategize.
Know your priorities
Negotiations often require each party to compromise. Setting your

priorities ahead of time can help you evaluate what you refuse to give up
as well as where you’re willing to budge.
Consider the opposition
Consider the potential opposition to your negotiations. Do you think that

your manager will object to a pay increase because of declining sales? Will
you be denied a higher starting salary for a position because your
requested rate is above the average range? Write down all the potential
oppositions and then gather the information you can use to argue your
case.
Define your BATNA
Understanding the best alternative to a negotiated agreement (BATNA) is

crucial to improving your negotiation skills. For example, you may
determine that if you cannot get a salary increase due to budget cuts,
you’d be willing to settle for additional vacation days. Defining these
alternatives ahead of time can help you create a backup plan before the
negotiation process.
Know when to walk away
One of the hardest parts of negotiation can be knowing when to walk

away from a deal. It is important to enter all negotiations recognizing that
you may not be able to come to an agreement. For example, a hiring
manager may not be able to offer you a salary high enough to justify
accepting the job offer. Once you realize no further compromises can be
made and one or neither parties is willing to accept the terms, it’s
probably time to walk away.
Keep your timeline in mind
A timeline can significantly impact your position of power in the

negotiation process. For example, if one or both parties are rushing to
reach a decision, at least one party may give up too much and regret their
actions. For example, if you’re trying to get a new job quickly, you may
take a position with lower pay than you deserve, or you may compromise
too much on benefits. In this case, you may find yourself unsatisfied with
your decision long-term.
The same rule can apply for a longer time period. If a company is
considering partnering with a vendor but they do not yet need their
services, the vendor may have a harder time convincing the company to
meet their terms. The company may push harder for discounted rates and
more value because if the vendor does not agree, they still have time to
find another solution.
Related: How to Negotiate Salary (With Examples)
Challenges to negotiating in the workplace

The workplace is ever-changing, but negotiation remains constant. Keep
in mind that changing business practices can present new challenges. In
addition to learning negotiation skills, it also necessary to know how to
adjust them to a specific situation.
For example, many meetings today are entirely on the phone or over the
internet, and some negotiations may occur via email. These methods of
communication can inhibit your ability to read non-verbal cues, so you
might suggest interacting through a video chat instead.
Negotiation skills can help you develop your career, secure a higher salary
and meet critical business needs. Continuous practice is key to improve
your negotiation ability.
Quick Navigation
01What are negotiation skills?02Types of negotiation03Tips to
improve your negotiation skills04How to prepare for a
negotiation05Challenges to negotiating in the workplace
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CAREER DEVELOPMENT

Negotiation Skills: Definition and

Negotiations occur frequently within the workplace and may occur

What are negotiation skills?

The skills you’ll need depend on your environment, your intended

Here are forms of negotiation:

 Distributive negotiations: Also called distributive bargaining, this

Tips to improve your negotiation skills

Follow these tips to improve your negotiation skills:

1. Identify the final goal

Below are a few ways to strengthen your negotiation skills.

1. Identify the final goal

2. Practice building rapport

Successful negotiation requires you to effectively communicate not only

3. Be willing to compromise

Without compromise, it can be nearly impossible to reach an agreement.

Setting a timeline on the negotiations motivates both parties to reach an

5. Take the multiple offer approach

By presenting multiple offers at once, you can save time in the

It can be challenging to ask for what you want. However, successful

7. Don’t take “no” personally

8. Understand your weaknesses

One of the best ways to increase your comfort in negotiations is to

How to prepare for a negotiation

When preparing for a negotiation, be sure to identify the following:

By considering this information ahead of time, you will be less likely to

Before entering a negotiation, evaluate all parties and consider their

Know your priorities

Negotiations often require each party to compromise. Setting your

Consider the opposition

Consider the potential opposition to your negotiations. Do you think that

Define your BATNA

Understanding the best alternative to a negotiated agreement (BATNA) is

One of the hardest parts of negotiation can be knowing when to walk

Keep your timeline in mind

A timeline can significantly impact your position of power in the

Related: How to Negotiate Salary (With Examples)

Challenges to negotiating in the workplace

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