Dark Side of Negotiation: When Negotiating Undermines Organizational Productivity

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.