Managing the Goal-Setting Paradox: How to Get Better Results from High Goals and Be Happy Open Access

Many negotiation teachers and trainers share the same tip early on: negotiators who set higher goals “do better.” It turns out that one of the most empirically supported truths about negotiation, however, comes with a big “but” because negotiators who set higher goals are likely to feel worse. In other words, negotiators who set optimistic goals are likely to obtain better objective outcomes but worse subjective outcomes.

We call this empirical finding the “goal-setting paradox.” Others might describe it as a tension between goal setting and happiness along the lines of other familiar tensions like those between assertiveness and empathy or creating and claiming value (Mnookin, Peppet, and Tulumello 2000). Much as we might want to treat this goal-setting paradox or tension as an anomaly, we know it comports with other research demonstrating that conventional measures of success may also be associated with unhappiness. In one study, for example, law students with pessimistic explanatory styles got better grades (i.e., objective outcomes) but were more susceptible to depression (i.e., subjective outcomes) (Satterfield, Monahan, and Seligman 1998).¹

The goal-setting paradox calls us to question the negotiation literature's standard advice to set high goals. Because research shows negotiators want both good results (objective success) and to feel good (subjective success) (Curhan, Elfenbein, and Xu 2006), what should they do? Should they aim high, getting good results but feeling worse, or should they aim lower, getting worse results but feeling better? Or, to use another familiar framework, should negotiators seek to maximize, or should they be content to satisfice (Simon 1956)? In other words, do we try to get the very best result, or just an acceptable one?

The problem with both of these approaches is that they leave negotiators vulnerable, either to unhappiness (in the case of maximizing) or underperformance (in the case of satisficing). We recommend a third approach, which we call the “maximize-and-expand” approach. We argue that negotiators should set ambitious goals but that they should also cultivate a wider mind-set that enables them to expand their awareness, focus, and acceptance. That is, negotiators should set their sights high in negotiation, but they should adopt strategies — some of which we identify below — to preserve and enhance their sense of well-being, regardless of outcomes. We also identify three concrete steps that negotiation teachers and trainers can take to help their students embrace the maximize-and-expand approach to goal setting that we recommend.

Nearly every negotiation scholar and teacher advises negotiators to aim high. Charles Craver argues, for example, that those “who want better deals get better deals,” so “set your goals high” (Craver 2002: 36). Likewise, Richard Shell recommends that “[w]hen you set goals, think boldly and optimistically about what you would like to see happen” (Shell 2006: 34). Leigh Thompson also advises that “it is important to optimize one's strategies by setting high aspirations and attempting to achieve as much as possible . . .” (Thompson 2005: 7). In sum, negotiation theorists “uniformly argue that high aspirations are desirable . . .” (Korobkin 2002: 56, emphasis added). This advice deserves special attention because it is based on solid and consistent empirical research. In several studies, researchers have found that negotiators with more ambitious goals outperform negotiators with more modest goals. In one classic study, for example, Sidney Siegel and Lawrence Fouraker recruited subjects to participate in a buy–sell negotiation. They gave some subjects an ambitious goal of a $6.10 profit and other subjects a modest goal of a $2.10 profit. The former subjects obtained, on average, a $6.25 profit, while the latter subjects obtained, on average, a much smaller $3.35 profit (Siegel and Fouraker 1960). More recently, in a study of actual salary negotiations undertaken by MBA graduates, Hannah Riley Bowles, Linda Babcock, and Kathleen McGinn found that “a 30 percent increase in a person's goal going into a negotiation produced, at a minimum, a 10 percent increase in the negotiated amount he or she was able to obtain” (Babcock and Laschever 2003: 132).

Higher goals are associated with better outcomes not only in distributive negotiations but even in negotiations with “win–win” or integrative potential. Unlike distributive negotiations, where one side can win only at the expense of the other, integrative negotiations involve potential for both sides to create value through creative solutions or logrolling (i.e., letting each side win on issues that are more important to that side and less important to the other) (Thompson 1990). In one recent study, for example, Adam Galinsky and his colleagues found that negotiators primed to focus on their aspirations were more likely than those primed to focus on their constraints to maximize their joint gains in an integrative negotiation (Galinsky et al. 2005).

Finally, a broader literature suggests that those who set higher goals do better not just at negotiation but when performing many other tasks as well. As Linda Babcock and Sara Laschever put it:

But at what cost?

Negotiators who set their sights high are likely to obtain better results, but research shows that they are also likely to feel worse about those results. Suppose, for example, that Negotiator A and Negotiator B are co-employees, each making $50,000 a year. Going into salary negotiations with their manager, suppose that Negotiator A has a goal of a 10 percent raise, and Negotiator B seeks a 5 percent raise. Consistent with the research reported above, assume that Negotiator A obtains a 7 percent raise (i.e., $3,500), and Negotiator B obtains a 6 percent raise (i.e., $3,000). Negotiator A is now $500 wealthier, but she is likely to feel significantly worse about the negotiation than Negotiator B. Why? The basic intuition is straightforward. As Russell Korobkin explains it, the higher a negotiator's aspiration, “the less likely she will be to achieve the aspiration, often resulting in less satisfaction for the [negotiator], even holding outcomes constant” (Korobkin 2002: 59).

This intuition is supported by empirical research. As Jared Curhan and his colleagues observe, “experimental manipulations such as increasing or attending to one's aspirations can drive the two in opposite directions, increasing objective negotiation performance while simultaneously reducing subjective satisfaction” (Curhan, Elfenbein, and Xu 2006: 495). In one compelling demonstration, Galinsky and his colleagues asked subjects to negotiate the prospective purchase of a pharmaceutical plant. The researchers instructed some of the participants playing the role of buyers to focus on their aspirations and others to focus on their best alternative to a negotiated agreement (BATNA). Subjects in the former group obtained significantly better outcomes — that is, they purchased the plant for nearly two million dollars less than the subjects in the latter group — but felt significantly worse about the negotiation (Galinsky, Mussweiler, and Medvec 2002: 1135).

In a similar real-world study, Sheena Iyengar and her colleagues studied the job-seeking and negotiation behavior of graduating students from eleven different universities. Based on subjects' responses to several items drawn from a maximization scale (Schwartz et al. 2002), the researchers categorized the subjects as either maximizers or satisficers. They found that the maximizers negotiated average starting salaries that were nearly 20 percent higher than those obtained by the satisficers; despite this, the maximizers were significantly “less satisfied with the outcomes of their job search, and more pessimistic, stressed, tired, anxious, worried, overwhelmed, and depressed throughout the process” (Iyengar, Wells, and Schwartz 2006: 147).

These findings — documented by other researchers in other studies (Oliver, Balakrishnan, and Barry 1994; Thompson 1995) — illustrate the goal-setting paradox. Negotiators who heed the prescriptive negotiation literature's advice to set ambitious goals are likely to do well but feel unsatisfied:

We can expect the goal-setting paradox to extend to integrative negotiations, as well. Such negotiations often involve more options and greater choice, and research shows that maximizers faced with more options experience “choice overload” and thereby less satisfaction (Guthrie 2003; Schwartz 2004).

The paradox extends even beyond negotiation. As noted, those who set high goals tend to do better at a variety of tasks, such as dieting and overcoming unhealthy addictions. Research also shows, however, that such maximizers tend to report lower levels of happiness (Schwartz 2004).

We recognize that the research literature might overstate the goal-setting paradox. In particular, we acknowledge that the negative feelings that higher goal setters report might be transitory. The so-called “psychological immune system” might kick in to bring individuals back to their relatively stable “set point,” or typical range, of subjective satisfaction (Wilson and Gilbert 2005). Alternatively, even if one rejects the substantial evidence for the existence of set points of satisfaction, one might be skeptical of the goal-setting paradox for an entirely different reason. Some might say simulated negotiations fail to capture the dynamics of actual negotiations. Imagine, for instance, that a negotiator saved two million dollars not in a simulated negotiation, as reported above, but in an actual negotiation. Two million dollars would seem to buy lots of therapy, whether in the form of psychotherapy, psychopharmacology, or good old-fashioned retail! So, too, even those people who report more stress after negotiating higher salaries may discover greater rewards in the years to come. After all, raises build on prior salaries, and the stream of future income may be more than individuals realize in what might be momentary disappointment (Babcock and Laschever 2003). The substantial research literature showing that wealth above a modest level does not enhance happiness, however, undercuts this critique somewhat (Seligman 2002).

Far from overestimating the goal-setting paradox, then, the existing research may actually underestimate it. Existing studies focus on short-term evaluations, showing that negotiators who set higher goals report less satisfaction immediately after a negotiation. We know of no studies that look at the long-term consequences of setting (and failing to achieve) higher goals in negotiation, but we hypothesize at least three ways in which such a mind-set might hurt.

First, individuals who change their negotiation behavior might shift their behavior and orientation more generally. In particular, individuals taught to set higher goals in negotiation may find themselves setting higher goals in other areas of life: perhaps they want to run faster on the track, lose even more weight, get “their” children into even “better” schools. In short, those who seemed more like satisficers may start to seem more like maximizers. And, as we saw, research shows that maximizers tend to do better at most tasks — but feel worse (Schwartz 2004).

Second, individuals trying to obtain optimal objective outcomes for themselves may find that they are tempted to violate their own ethical limits. People who once disclosed information freely may find themselves withholding information, engaging in “puffery,” or even making false statements of fact. All of us who teach negotiation see how some students feel pulled in this direction. This change in behavior may create a painful gap between how individuals feel they should act, and how they feel compelled to act. For some, this may create a crisis of identity.

Third, even those whose behavior or traits or personalities remain the same after being taught to elevate their goals may find themselves affected by others who learned those lessons in different ways. Teaching classes of students to set higher goals increases the odds that any given person will now find herself enmeshed in longer and less pleasant negotiations. This may exact a kind of emotional tax on those who would prefer not to negotiate or not to negotiate in such a way.

All in all, the research on the goal-setting paradox is compelling and may even fail to capture the full extent of the tension between setting high goals on the one hand and achieving happiness on the other. This observation provokes two related questions. First, what should negotiators do to address this tension? Second, how can negotiation teachers and trainers help their students in this process?

Some negotiation teachers acknowledge the goal-setting paradox but are unconcerned about it. For them, negotiators should seek to maximize objective outcomes, which they might see as tangible and durable, rather than subjective well-being, which they might see as intangible and ephemeral. For example, Craver reports with understandable frustration that his negotiation students who set modest goals “are more pleased with their results than are more adroit colleagues who establish higher objectives but fall slightly short of their targets” (Craver 2002: 37). Consistent with the conventional wisdom among negotiation theorists, he recommends setting ever higher goals:

Others take the opposite position. The psychologist Barry Schwartz, who focuses his analysis not on negotiation, but more broadly on choice, goes much further. Like other theorists, he concedes that “maximizers might do better objectively than satisficers,” but he argues that “[g]etting the best objective result may not be worth much if we feel disappointed with it anyway” (Schwartz 2004: 88–89). Thus, he advocates modest aspirations:

Korobkin proposes a more prudent approach to the paradox. He begins by questioning “the usual prescriptive advice that negotiators should always set high aspirations” (Korobkin 2002: 61). He recognizes that high aspirations offer benefits (better objective outcomes) and that they impose costs (inferior subjective outcomes and a higher risk of bargaining impasse). He thus recommends that negotiators balance the anticipated benefits against the anticipated costs before setting high goals:

Given the overwhelming evidence that ambitious goals lead to better objective outcomes, we believe, along with Craver and other negotiation teachers, that negotiators should aim high.² That said, we also value subjective happiness, and we share Schwartz's insight that “the best objective result may not be worth much if we feel disappointed with it anyway” (Schwartz 2004: 88–89). More broadly, we admire the proponents of both therapeutic jurisprudence and hedonic psychology who argue that policies and practices should be evaluated, at least in part, based on their impact on our subjective well-being (Stolle, Wexler, and Winick 2000). Thus, Korobkin's more measured advice to negotiators to think carefully about the benefits and costs of lofty aspirations makes sense to us. Building on this balanced approach, we advise negotiators to address the goal-setting paradox by adopting what we call the maximize-and-expand approach. That is, negotiators should seek to maximize their objective outcomes in negotiation, but they should also seek to expand their self-awareness, focus, and self-acceptance.

Negotiators should focus on the nature of their emotional reactions during and after a negotiation. At a minimum, this includes asking themselves the same kinds of questions that researchers asked participants in their studies. When they set higher goals, how do they feel after a negotiation? How intense is that feeling? What thoughts arise? (Do they think “Wow, I really can accomplish things” or “Darn, I wonder if I left money on the table — I wonder if I'm just that kind of person?”)

Negotiators might also enhance their self-awareness through the practice of mindfulness. Although definitions vary, we use the term here to mean developing an awareness of what is happening in a particular moment and accepting this information in a relatively nonjudgmental way (Freshman, Hayes, and Feldman 2002; Riskin 2002). Mindfulness may be applied to attitudes (“a maximizing mind-set seems to be dominating me now”) or emotions (“some vague dissatisfaction seems to be arising now”). Some people find that they can learn to recognize their emotions by noticing their physical sensations. Mindfulness practice can also include developing awareness of the thoughts and emotions of others. Decades of research by Paul Ekman shows that particular emotions, such as anger and sadness, may show up in predictable physical patterns even among different people in different cultures (Ekman 2004; Freshman 2006).

Many mindfulness teachers suggest that becoming mindful of emotional states may make those emotions pass more quickly. Some also suggest that if such an emotion as disappointment because one has failed to meet a high goal were to linger, a negotiator can learn to recognize this as normal. “Oh, I'm just suffering from the winner's curse,” they might say to themselves. “Many times, people who do well wonder if they could have done better. There's nothing wrong with me.”

Mindfulness can do double duty. At the simplest level, it provides feedback about what may work for a given individual. At the same time, its practice may lead not only to further negotiating success but also to greater emotional and, according to some research, physical health as well (Freshman, Hayes, and Feldman 2002; Brach 2008).

In reflecting upon a negotiation, a negotiator should focus broadly. It is easy to focus narrowly on one outcome, such as price, and to compare it to a high, unmet goal. Instead, we recommend that she expand her focus to a variety of experiences before, during, and after the negotiation. Ironically, this expanded focus may not only make her feel better but possibly enable her to do better. Both philosophers and spiritual teachers recognize this kind of paradox. Philosophers note the paradox of hedonism, that those who focus most on pleasure may have less enjoyment than those who simply get lost in projects they find meaningful (Smart and Williams 1973). Psychologists of happiness provide some support for this claim (Csíkszentmihályi 1996; Seligman 2002). Spiritual teachers of meditation often note that those who strive too directly for relaxation or heightened peak experience may ironically have less success than those who commit to more modest goals, such as simply accepting whatever is arising with nonjudgmental acceptance (Catherine 2008). Some negotiation theorists would see this technique as essential to understanding the full range of the parties' broader interests as well as their narrower positions.

For example, a negotiator might expand her focus to consider other types of successes she has enjoyed in the negotiation, including meeting goals about how she conducted the negotiation (process goals). Among other things, a negotiator might notice how well she stuck to her own ethical standards (whether that means not making false statements, guarding against harmful disclosures, or any other standard she may find personally meaningful) or how much effort she expended to try to expand the pie to create win-win solutions.

Recent research suggests this kind of self-management benefits women in particular. When groups of students are told merely to set higher goals, both men and women do better, but men still do better than women. When classes are instead taught self-management skills, women make larger improvements than men (Babcock and Laschever 2003). Likewise, a negotiator might expand her focus by comparing the outcome she obtained relative to her list of feasible alternatives or to her BATNA. She might have fallen short of her aspiration, but she will have exceeded her bottom line or BATNA because she should only have entered into an agreement if the agreement exceeded these measures. This comparison should lead to feelings of satisfaction and accomplishment rather than dissatisfaction and failure.

Negotiators might also attempt to cultivate “self-acceptance” (Ellis 1962). Self-acceptance or “unconditional self-acceptance,” as used by the psychotherapist and scholar Albert Ellis, means that “the individual fully and unconditionally accepts himself whether or not he behaves intelligently, correctly, or competently and whether or not other people approve, respect, or love him” (Ellis 1977: 101). Researchers have found that those who score highly on self-acceptance tend to be “lower in depression and anxiety and higher in happiness or general well-being” (Chamberlain and Haaga 2001a: 171) and to respond more favorably to negative feedback (Chamberlain and Haaga 2001b: 187). By combining high aspirations with self-acceptance, negotiators might attain a kind of “positive perfectionism,” that is, “a striving for perfection” coupled with “the acceptance of non-perfection” (Lundh 2004: 266).

Several different kinds of techniques may foster such acceptance. Cognitive therapy for obsessive behaviors, including perfectionism, may be instructive (Beck 1995; Lundh 2004). Such cognitive therapists often ask clients with an obsession on, for example, cleanliness, “Does it have to be 100 percent clean? What if it were 90 percent clean?” Clients often say 90 percent would be acceptable, and then therapists continue a similar dialogue to get clients to recognize that something less than perfection may be tolerable. Some economists, too, counsel that people evaluate investments and choices not by success ex post but by the ex ante process by which they made the decision (Hay 1997). More spiritual approaches sometimes teach people to disidentify with some concepts, such as material outcomes, and focus instead on other qualities, such as ethical behavior (Goldstein 1993). Despite their rather different origins and language, each of these three techniques help individuals refocus from outcomes partly beyond their control — such as how negotiation counterparts behave — to potentially less volatile processes within an individual's control.

Negotiation teachers and trainers who aspire to help their students obtain the best possible objective and subjective outcomes can help them learn how to embrace the maximize-and-expand approach to goal setting. We recommend, in particular, that negotiation teachers and trainers consider implementing one or more of the following three options: structured debriefing, targeted journaling exercises, and mindfulness instruction.

Following the completion of a negotiation simulation, negotiation teachers and trainers typically “debrief” the simulation in class. Commonly, as part of the debriefing process, negotiation teachers ask the students to share such information as their BATNAs, goals, and outcomes. Feedback from multiple pairs negotiating the same problem is unavailable in the real world, so this information can be quite illuminating, but it can also lead those who obtained good objective outcomes relative to their goals to become complacent and those who obtained bad objective outcomes relative to their goals to feel dissatisfied or inadequate.

To encourage a maximize-and-expand mind-set among students, we recommend that negotiation teachers and trainers occasionally focus the debriefing session solely on the negotiation process itself. To do so, they can begin by instructing their students not to share any information about their BATNAs, goals, or outcomes. Then, they can ask questions focused solely on the process. For example, they could ask: How did you elicit information from your counterpart? How did he elicit it from you? Did your counterpart listen to you? Did that prompt you to share more information? Did you attempt to expand the pie? What options did you consider? How did you get those on the table? What standards were relevant to determining how to resolve your dispute or to close your deal? How did you decide which one or ones should govern? By conducting a debriefing session in which outcomes are ignored, negotiation teachers can, implicitly or explicitly, encourage students to broaden their focus to the way they conducted the negotiation process itself.

Many negotiation teachers and trainers instruct their students to write journal entries about their negotiation experiences, and teachers can use this process to encourage a maximize-and-expand mind-set in their students. We recommend two journal exercises in particular. First, following a simulated negotiation, we recommend that negotiation teachers direct their students to write a journal entry in which they focus their evaluation solely on the way they conducted the negotiation process. By shifting student focus from outcome to process, negotiation teachers may distract their students from comparing outcomes in favor of encouraging students to focus on their listening, information gathering, and option-generating skills.

Second, we recommend that negotiation teachers direct their students to write a journal entry following a simulated negotiation in which they are directed to evaluate their outcome solely in light of their BATNA. Experimental evidence actually supports this strategy. As mentioned above, Galinsky and his colleagues asked subjects to negotiate the prospective purchase of a pharmaceutical plant. In one version, the researchers instructed some of the “sellers” to focus on their aspirations and others to focus on their BATNA. Consistent with other research illustrating the goal-setting paradox, Galinsky and his colleagues found that the sellers in the aspiration group obtained significantly better outcomes — that is, they sold the plant for nearly 1.5 million dollars more than the subjects in the BATNA group — but felt significantly worse about the negotiation (Galinsky, Mussweiler, and Medvec 2002: 1135).

This time, though, the researchers provided a potential way out of the paradox. Following the negotiation, and before they asked about satisfaction, they prompted some of the subjects to focus on their BATNA by asking them to indicate what it was. They found that sellers who focused on their BATNA before contemplating their satisfaction with the outcome were equally satisfied with the outcome, whether they were initially instructed to focus on their aspiration or their BATNA (Galinsky, Mussweiler, and Medvec 2002). As they explain it, “[F]ocusing on their target price before and during the course of a negotiation and then focusing on their lower bound after the negotiation allowed negotiators to have their cake and eat it, too: objectively superior outcomes topped with an icing of satisfaction” (Galinsky, Mussweiler and Medvec 2002: 1138).

Mindfulness practice, as noted above, can facilitate greater emotional awareness of oneself and others, among other things. Even one hour of external mindfulness training to help recognize emotions in the faces of others often leads to significant improvement in the recognition of emotions expressed in the faces of others (Ekman 2004). And training in internal mindfulness is now readily available and offered in many dispute resolution settings (Riskin 2004).

Teachers and trainers can also encourage their students to embrace a maximize-and-expand mind-set by leading them in guided mindfulness exercises. Mindfulness training of any kind at any time may increase the flexibility of students to shift from automatic, competitive thoughts to more flexible mind-sets. In addition, teachers may craft mindfulness moments for particular points in negotiation teaching as well. In particular, teachers may remind students to become mindful of the kind of attitude they are taking at any given moment. During negotiations themselves, teachers may signal participants to become more mindful. Some may explain before the negotiation that they will literally ring a bell to signal participants to stop speaking, be still, and observe a few seconds (or more) of mindfulness before proceeding. Others may simply say something like, “Everyone stop. Stay still. What is your attitude now? Are you stuck in perfectionism? Are you open to broader perspectives?” So, too, when negotiations end, teachers may ring a mindfulness bell and ask similar questions. They might also ask, “Are you remembering how far you've come so far?” Those who teach their students external mindfulness may also ask students during negotiations, “What do you see in the faces of your counterparts? How can you help broaden their perspective?” A bit later they may ring the bell and ask again, “What do you see in the faces of your counterparts now? If you've tried to shift their frame, has it worked? What might you try now?”

A famous mindfulness meditation teacher once said that the problem with Westerners is not that they aim high, but at the wrong things: fleeting sense pleasures rather than full enlightenment. So, too, we as negotiators may aim “high” on things like selling price but lose track of other, deeper goals, including the well-being of all those affected.³ But do not just believe us. In your next negotiation, set your goals high, but be aware, broadly focused, and accepting. In other words, do not lose sight of your narrow, short-term goals, but as you attempt to meet them, broaden your focus, attend to your emotional reactions, and be self-accepting and forgiving. Likewise, teachers may share these same attitudes with their students, helping them through structured debriefing processes, journaling assignments, and mindfulness exercises to expand their awareness.

The net effect, for both negotiators and those who teach them, is that you and your students might get a better price along with a better night's sleep! So, too, even those who negotiate for others will benefit their clients, and agents will benefit their principals. Decades of research shows happier negotiators reach better results (Freshman, Hayes, and Feldman 2002; Freshman, Hayes, and Feldman 2008). This includes better results in terms of meeting individual goals and in approaching more efficient, joint gains (Freshman, Hayes and Feldman 2002; Freshman, Hayes, and Feldman 2008). In short, teachers who help negotiators expand focus can make their students, their clients, and society wealthier as well as happier. And what teacher would not smile at that prospect?