Dark Side of Negotiation: When Negotiating Undermines Organizational Productivity

Keywords: negotiation; conflict; trust; productivity

Abstract: Researchers and practitioners highly encourage job candidates to negotiate employment agreements. In our investigation, we challenge this unqualified advice to negotiate, and demonstrate that negotiation may have a detrimental impact on employees’ implementation behavior and job tenure. We collected and analyzed archival employment data of Master of Business Administration program graduates, over a period of 13 years. Individuals who negotiated their job offer left their job approximately a year earlier than individuals who did not negotiate. We then show in an experimental study with random assignment to negotiated- versus non-negotiated agreements, that the negotiation process itself influences individuals’ motivation and outcomes. Moreover, we demonstrate that negotiators report higher conflict and lower trust in their counterpart, compared to non-negotiators. This loss of relational capital mediates the detrimental impact of negotiation on post-agreement behavior. Taken together, our results suggest that negotiating affects long-term individual motivation and commitment, and impacts organizational outcomes.