In my B-school course on ‘Negotiations’, we were split into groups of two and given a $10 bill each.
The person who got the $10, had to split it with his partner in whichever way he wanted. If the partner agreed to the proposal, they got to keep the $10.
Else, the money would go back to the instructor and both got nothing.
And you know what happened?
Most of the groups split 50:50 and kept the money (I also did that). Some groups had asymmetric splitting, with the guy who received the $10 bill keeping a larger share.
And the funniest thing — some groups could not agree on the split and decided to forego the money entirely!
It turns out that even commercial negotiation, which is all about money, is NOT all about money. If it was, even for 25 cents, you were better off accepting the proposal.
But I can bet that almost 100% of people would reject that offer — won’t you?
Humans are not value-maximizing machines. We are emotional creatures. When people find things unfair, they sometimes walk away from deals worth millions of dollars.
Whether we realize it or not, we want fairness. When that sense of fairness is missing, employees won’t be happy even with the biggest pay packages. And the same thing goes for personal life.
Treat people fairly. That is how you build long-term relationships.
– Rajan