The Myths About Workplace Negotiations

And Why Organizations Must Battle Against the Zero-Sum Mindset

Apr 19, 2021
Management and Organization

SMITH BRAIN TRUST – Employees and the organizations in which they are embedded are complex human beings and entities.  But when it comes to things like hiring, negotiations and fostering creativity, there is often a tendency to reject such complexity and see things as “either-or” or “winner vs. losers”. However, it doesn’t have to be that way, says Maryland Smith’s Rellie Derfler-Rozin.

That line of thinking is known as the zero-sum mindset. An all-or-nothing mentality that, Derfler-Rozin says, can adversely affect organizations at every level.

“We all have those myths about how things work in the world. In our thinking, we can sometimes oversimplify and that is manifested in this zero-sum mindset, that it's an either/or deal,” says Derfler-Rozin, associate professor of management and organization at the University of Maryland’s Robert H. Smith School of Business. “The first step toward correction is being aware of this tendency and how it may lead to a lot of errors and biases. We have to try to embrace complexity rather than regard everything as either ‘this or that.’”

Derfler-Rozin, who will host a free upcoming webinar, “The Pitfalls of a Zero-Sum Mindset”, has researched the impact of zero-sum thinking in the employment negotiation process. What’s crucial to success in negotiations, she says, is for both parties to shy away from the idea that if one side is getting more, the other must be coming out worse for wear – especially when it’s time to talk salary. 

“It’s easy to fall into the zero-sum mindset during salary negotiations because it’s easy to quantify salary in comparison to less-easily quantifiable factors like work-life balance, growth opportunities and telecommuting,” says Derfler-Rozin. “Focusing on salary alone, by definition, makes the negotiation a “fixed pie” in which when one party gains and the other party loses. Trading on other factors can help people on both sides appear more sincere and flexible. It shows an understanding of constraints while offering value creation in other ways.”

A zero-sum mindset also carries weight in terms of an employer’s perception of a worker’s motivation, Derfler-Rozin says. Her previous research on the topic conveyed that hiring managers perceived job candidates who show interest in both task (intrinsic motivation) and external relevant factors such as perks, benefits, flexibility (extrinsic motivation) to be less interested in the job itself compared to those who showed pure interest in the task itself.

It’s a short-sighted approach, she says, that can cost employers a chance to hire the best candidates or increase diversity within the workforce.

“Candidates can be and often are interested in salary and benefits while also caring about doing a good job with the work itself,” says Derfler-Rozin. “Thinking about extrinsic factors shouldn’t devalue a candidate’s intrinsic motivation – both motivations can be high. Research shows quite robustly that being high on extrinsic motivation can strengthen the positive effect of intrinsic motivation.”

But even after a candidate has been hired, a zero-sum mindset can still appear in certain aspects of organizational culture, like creativity, Derfler-Rozin says. There is some evidence that creative people also tend to display rule-breaking tendencies. Alternatively, those who tend to abide by rules more frequently and care about ethics, typically show less creativity.

Her research shows that’s another either/or example that can be combated through purposeful and mindful actions and that can enhance organizational outcomes. One place to start, Derfler-Rozin says, is by hiring managers that not only are ethical but also actively signal and practice good moral behavior. These leaders can help employees who care about ethics to maintain an ethical environment while still showing creativity, she says.

“Ethical leadership is always important for organizations, but this is an added value that allows for creative thinkers who care about ethics to thrive,” says Derfler-Rozin. “Having someone to uphold ethical standards relieves this burden from employees so that they can feel comfortable and express their creativity.”

Webinar: Rellie Derfler-Rozin will share more about her research findings and other insights in “The Pitfalls of a Zero-Sum Mindset,” on May 18, 2021.



About the Expert(s)

Rellie Derfler-Rozin

Rellie Derfler-Rozin is an associate professor of management & organization at the Robert H. Smith School of Business at the University of Maryland. She received her PhD in organizational behavior from London Business School. She studies decision making in the social context. In her research, she looks at how people may deviate from decisions/behaviors that are rational from a pure profit maximization (traditional economics) perspective to satisfy needs that relate to their social world (e.g. the need to belong to a group, the need to have status in the group). Within this broad umbrella she is studying managerial decision making (e.g. looking at how managers may be averse to use their discretion in allocation decisions to satisfy belongingness needs to their group of employees), trust and ethics (e.g. looking at how group members who are at risk of social exclusions may show higher trusting behaviors and unethical behaviors that serve the group in an effort to promote re-inclusion in the group). More theme-related topics of interest to her are emotions, ethics, status and hiring decision biases.

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