Testosterone levels may affect your negotiating abilities

Sally Herships Oct 20, 2011

Testosterone levels may affect your negotiating abilities

Sally Herships Oct 20, 2011

Tess Vigeland: I’m Tess Vigeland. And I am a TERRIBLE negotiator. Just. Awful. If there is bargaining to be done of any kind — whether at the car lot or in the boss’ office — forget it.

How ’bout you? Are you a haggler? A push over? Well if you’re not sure, check your hormones. A new study says it’s our chemistry that determines what kind of deal makers we are. And some of us may just want to consider steroid creams before our next salary negotiation. I joke, I kid! Kind of.

Sally Herships has our story.

Sally Herships: Christine Porath teaches business at Georgetown. She told me a about a personal assistant who asked her boss for a raise. The negotiation didn’t go so well. Her boss only offered a tiny fraction of what the assistant asked for.

Christine Porath: She just felt like it was a ridiculous amount, given her workload and the boss’s extraordinary demands.

Her boss was one of those high-performing, high-energy CEOs. And the job was tough. But Porath says the personal assistant got so angry over what she thought was an unfair salary offer, she decided to get revenge. The assistant bad mouthed her boss to her co-workers and even left a receipt for the boss’s expensive lingerie next to the fax machine.

Porath: And this is the same pattern we’ve seen in our research. People that feel like they’re disrespected, find ways to get even.

But the personal assistant repeatedly tried to sabotage her boss. Who does that? People with lots of testosterone. High levels of the male hormone is what makes people retaliate when they perceive an offer as unfair. Imagine you’re in a job interview and you get a salary offer that you think is way too low.

Adam Galinsky: The low-testosterone people would try to convince the person to come up higher. The high-testosterone person would he the one that would say, “Take the job and shove it,” and leave the room.

Adam Galinsky is a professor at Northwestern’s Kellogg School of Management. He’s the co-author of a new study on the effect of testosterone on negotiations.

Galinsky: So this idea is that everyone recognizes this as unfair. But only the people that are high in testosterone are going to aggressively respond to that unfairness.

Pretend I had a high level of testosterone. Here’s how I might respond to my editor, John Haas’, suggestion.

Herships: Hey John, so here’s how I want to start my story…

Harp music

Herships: “Once a upon a time in a corporation far far away, there was a grumpy personal assistant.”

John Haas: Yeah, Sally. I don’t think the fairy tale thing is really working.

Herships: Are you kidding me?!

Haas: I’m not sure this is your best idea.

Herships: If you don’t let me keep that in, you can find someone else to file this story!

Haas: C’mon Sally…

The surprising thing is while we often associate testosterone with strength, Galinsky says people with high testosterone are actually really sensitive. They care a lot about respect. And in the world of business, respect often translates into money.

Galinsky: Absolutely. Think about a salary. What does a salary tell you? A salary has a functional utility. It allows you rent an apartment or buy a car, but it also has a psychological utility. It says, my salary tells me how much the organization respects me.

So does more testosterone mean you’re better at making deals? Galinsky says it makes you more aggressive. That can be a big help, for one-time negotiations. But, if you’re haggling over a contract, which requires lots of little issues, it could keep you from reaching a deal at all.

So what’s a negotiator to do? I asked professional negotiator Jeff Gordon for some tips.

Jeff Gordon: Number one is ask, don’t tell.

Gordon says ask the other side what they perceive as a good offer. What they want out of this negotiation, anyway?

Gordon: Number two: Control your own emotional response.

Escalating things isn’t going to get you a better deal. It’s just going to make you lose your cool. And number three is to know your walk-away point. Always figure out what you’ll be left with if you don’t accept the current terms. But Gordon says negotiators also needs to know their ZOPA, the Zone of Possible Agreement. It means knowing what each side is willing to accept.

Gordon: If those two ZOPAs don’t overlap, you will never have a deal.

Using that info, the high-testosterone Sally from my earlier example realized she wanted to get this piece on the air. So she cut a deal with her editor John.

Haas: Hey Sally, nice piece.

Herships: Yeah, but it would have been nice to use my fairy tale metaphor.

Haas: Let’s just agree that this is a happy ending.

Herships: Ooh, so can I play the fairy tale music now?

Haas: OK, yeah, sure.

Pastoral music

From the magical world of radio-land, I’m Sally Herships for Marketplace Money.

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