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Reward Strategy
The concept of the reward strategy involves offering a reward to the opponent for any concessions they make. Wall (1977) uses the analogy of a car purchase negotiation. If the dealer makes a concession of $100, the buyer should then make a concession of $105 -- the $5 being the reward to the dealer for making the first concession. In this concept, first offers must be made with this subsequent reward in mind.
Applied to the position of production manager, this concept can be used when hiring a new employee. A candidate may have noted that they'd like to receive a salary of $35,000 per year. However, the maximum allowed for the position may only be $30,000. Using the reward concept, a first offer of $28,000 can be made. When the candidate counters with $33,000, a $2,000 concession, then the manager can offer $30,000...
For this reason, there are a variety of concepts that can be utilized when negotiating. In the instance of a production manager, the two theories -- reciprocity theory and reward theory -- were used. The two different techniques were used for two very different situations, which demonstrates how the uniqueness of the situation often dictates which technique is going to be most effective.
References
Klein, G. (2006). You can not negotiate everything or the times they are a changin'. Journal of Police Crisis Negotiations, 6(2). Retrieved December 2, 2009, from Academic Search Complete.
Wall, J. (Oct 1977). Effective negotiation. Business Horizons, 20(5). Retrieved December 2, 2009, from Business Source Complete.
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