How to Motivate Negotiators

How to Motivate Negotiators

negotiating for more moneyThe common assumption is what motivates people is money.  Makes sense – but what does the evidence show? Behavioral economists have done path-breaking research by questioning these sort of assumptions.

We at Mobus Creative Negotiating have drawn much from the work of Dan Ariely.  And so we turned eagerly to his new book, Payoff: The Hidden Logic that Shapes Our Motivation.  Ariely recently gave an interview to the Washington Post which summarizes the lessons from the book.

As usual, Ariely’s work is rich with information drawn from actual experiments, in this case at an Intel semiconductor factory.


He used three sets of incentives to get workers to meet targets: cash, pizza, and compliments. What he found is that on the first day, pizza worked best, but over time, compliments had the best effect, much better than cash.  He concludes that a lot of motivation is about the sense of creation and mastery on the job.  He describes that as “meaning.” He writes,“A lot of meaning is about the small struggles in life and managing to overcome them and feeling a sense of progress. .. Companies often don’t create this kind of sense of connection and meaning. They destroy it – unintentionally – with rules and regulations.”

negotiating inspirationAriely found that in lots of situations, people do not respond well to bonuses. “As the bonus increases, people choke and they actually don’t work as well.  Now, this finding is true for tasks that require creativity, problem solving, and cognitive capacity.”  Well, that describes a lot of the negotiations in the modern economy, where what really makes a difference is the ability to figure out a solution that no one anticipated going into the talks – for instance, a way to resolve differences that have arisen about implementing a contract which the two sides are interpreting in different ways or where unexpected situations have arisen.

Ariely is quick to add that bonuses make sense in some situations.  For instance, routine tasks.  Or for that matter sales.  As he writes, “Sales is a very tough job.  It’s just very depressing.  Paying people for every bit of success is one reasonable solution.” That applies to a lot of negotiating situations, especially the most basic task of persuading the other side to go with your product.

As so often in life, it all depends: sometimes bonuses are a good way to motivate negotiators; sometimes they are not.  That is just another example of the most basic lesson we teach at Mobus Creative Negotiating: not all negotiations are the same, so you should start by sizing up the situation to see what you face, and from that, decide what tactics will work best.