How to Hack a Salary Negotiation
July 18, 2011 Leave a comment
Two studies were conducted to examine the effects of implausible anchors on initial salary offers. Participants provided a salary offer to a candidate after receiving a relevant anchor and an implausible anchor. The results of Study 1 indicated that a high implausible anchor influenced salary offers, even in the presence of the relevant anchor. Study 2 examined whether a more extreme implausible anchor would also affect salary offers. The results indicated that both the high anchor and the extremely high anchor led to higher salary offers than did the control condition.
The author is Todd Thorsteinson and the paper can be found in the Journal of Applied Social Psychology.
Many studies have shown the existence of anchoring effects, but Thorsteinson found the effects exist in salary negotiations even when there is an appropriate anchor (e.g. when the “hirer” is told the job candidate’s previous salary was $29,000), and even when the anchor is utterly implausible (e.g. the candidate suggests a salary of $1 million.) Thorsteinson also gets bonus points for mentioning Scott Boras’ outlandish salary demands for Manny Ramirez as a real-world anchoring scenario.