Carrots And Sticks Example – 4 Examples To Use In Negotiations

When someone says carrots and sticks, it somehow reminds you of work. That’s because it is a very popular saying about rewards and punishment. You’d be surprised to know that it also works for negotiations too.

For this article, we are going to take a look at how carrots and sticks can be used in negotiations. The idea between rewards and punishment is often applied towards people pushing for negotiations. We are going to learn all about it and how to apply the same concept in terms of negotiations.

After reading this article, you should have a clear grasp of how to use carrots and sticks to improve your negotiation results.

Carrots and Sticks – What Exactly is It?

In the world of employment and work management, the term ‘carrots and sticks’ means a motivational approach that involves offering a reward, hence the term “carrot” for those who work really well while the opposite side gets the “stick” or a punishment for not doing their utmost performance. To make the term more simple, the carrots and sticks system is a form of feedback system set for employees.

The term is not just used in employment and work management. The term is also used in politics and negotiations. In fact, negotiators often use the carrots and sticks system as a way to get the other party to get along with their demands. 

As an experienced negotiator, the more tools you can use to get your desired results during a negotiation, then the better, correct? Being the case, it’s time to examine what are the best carrots and sticks examples that one can use to gain an advantage during negotiations.

Editor's note:

The Negotiation Game Changer Certificate Program teaches you:

  • the skills needed to drive better, fact-based decisions that ultimately benefit both organizations and its employees.
  • a comprehensive analytics skill set that will enable you to achieve deals with results you have been dreaming of.

The Best Carrots and Sticks Examples to Use in Negotiations

The Incentives and Penalties System

In the world of procurement, the procurement process often talks about how to source and negotiate with suppliers regarding the best amount and quality of materials versus the price the organization is willing to pay for those materials. We’ve talked about that in our procurement process article

For the negotiator, agreeing to pay for the high-quality material comes as the “carrot” while trying to come off cheap but getting inferior quality materials in the process becomes the “stick”. This example is aimed towards procurement teams that are looking to procure high-quality materials but at the cost of pricing.

The incentives and penalties system is a way of rewarding and punishing companies that choose to either follow the right path in acquiring materials or they want to go through the shortcut through dubious means. The system “…are increasingly looking to eradicate social and environmental non-compliances at their suppliers in response to increasing regulations, consumer demand, the potential for supply chain disruptions, and to improve their social, environmental, and economic supply chain performance. – “Carrots or Sticks? Improving Social and Environmental Compliance at Suppliers Through Incentives and Penalties by Angharad H. Porteous, Sonali V. Rammohan, and Hau L. Lee, April 2015”

1. The First Come, First Serve System

During negotiations, those who come first often tend to get the rewards while the ones who get left behind get the, well, dust that is left behind. Long story short, if you’re quick on your feet to spot an opportunity, go for it. If you’re late for the opportunity, better luck next time. 

Of course, not everyone who is quick to strike gains the carrot. There is also room for thinking as well. However, the waiting game is not always given towards negotiations. For the expert negotiator, the ability to make the other party jump at a negotiation hastily should be taken advantage of. 

Want to learn how to do that? Join our Negotiation Gamechanger course and become the expert negotiator that you’ve always wanted to be!

2. The “Follow our Advise or Else” System

The rule of a negotiator is to try and convince the other party that what you’re offering is often the better deal. So if you’re able to convince the other party to follow your advice or else, then you’ve already established a carrot and stick negotiation method on them.

For the other party, following your advice will seem like a reward for them because it gets them into your good graces, plus all the other great benefits that come with it. If they chose not to follow your advice, they run the risk of not getting your favor, thus giving them the ‘stick’.

3. The “If You Can’t Beat Em, Join ‘Em” System

During a negotiation, concessions are always the norm. So during a concession, when you or the other party agree to the concession, this is one form of simply joining the winning team to gain the “carrot” or the reward compared to not getting anything at all, thus the ‘stick’. 

4. The Simple System vs Complicated System

During negotiations, sticking to a simple way of discussing and offering your terms towards the other party tends to make the whole discussion more friendly and open-minded. When you start using complicated terms and conditions, this is usually where people tend to not listen to one another and confusion drives everyone impatient and frustrated.

Sticking to a simple way of negotiations will give you the ‘carrot’ you need; it will often make things clearer with the other party, thus making them give in to your demands. Keep pushing towards a complicated dialogue and you’ll most likely get the end of the ‘stick’!

"Very useful course, many actionable strategies"

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