salary negotiation techniques?

September 27, 2005 1:49 PM

What are good salary negotiation strategies? (more inside)

I am up for a 90 day review at a new job. I've proven myself pretty indespensible in that time, so this meeting is to decide the terms of my permanent employment there. This is my first job since college, and I'm none too good at this sort of stuff. My pay, benefits and long term prospects at the company are on the table.

I feel that I work for good, honest people, but business is business.

help me mefites?

posted by markovitch to work & money (14 comments total)

I'm very curious to see the answer to this question. Thanks for asking, markovitch.
posted by ThePinkSuperhero at 2:04 PM on September 27, 2005 [1 favorite]

I was in a similar situation back in March. I work for a small firm, with great people. They'll take care of you, but at the same time, as you said, business is business. Here's what I would suggest:

I did a self-review, requested a peer-review, and had the required manager review. I did not bullshit an ounce on my self review--it's just not worth it. My peer review was from a non-supervisor who was much more senior than I am. His was fair, balanced, and leaning towards the positive side. My manager review was similar (I report directly to the COO).

I also came to the table with a line-by-line breakdown of my job responsibilities, and what I had been doing to meet them. I also noted areas where there were items in my job description that I hadn't been doing, and where future projects would probably land. (I want to take a minute to note here, there's nothing wrong with having things in your job description that you're not actually doing. It happens sometimes. Just don't act like you're trying to avoid it, or hide the fact, or anything similar. Just put it on the table and let it stand.)

Also come with a list of areas that you have noted for improvement in yourself, and possible ways that you might address them (a class, some one-on-one time with other employees, etc.). Also come with an idea of what you would like for a raise, or benefits (I'm not sure exactly what your situation calls for). If your manager meets these amounts, then you're done. Don't ask for more simply because you can, you'll look greedy and it will screw you in the end.

If they come back to you with a smaller amount, don't be afraid to ask for what you think you're worth, but do it in a respectful way. Lay out what you're doing really well, and what future things you're preparing to work on, and see if that will help budge them. There's also option two:

If you want to take a more risky track... Let's say that they offer you a $5,000 raise, but you were hoping for $7,000 (I'm just using numbers here). Ask them if they will give you $3,000, but another salary and performance review in six months. It gives you a half year to address any gaps (perceived or otherwise) in your performance, and to come back and take another swing at a larger raise. It also shows that you believe in yourself and your abilities (it might be worth actually saying that!), and you're confident in what you can offer to the company.

In any case, good luck with it, and let us know how it goes!
posted by NotMyselfRightNow at 2:18 PM on September 27, 2005 [1 favorite]

Go in with an idea of what a fair salary is, and what you'd be willing to accept. Salary Survey data is good for this (if you're in IT, check the SAGE Salary Survey for the best numbers). Also, in the case of a wild discrepency between what they're offering and what you're expecting, it gives you an actual data point to show them (in case they don't know what they _should_ be paying.)

Try to not be the first person to mention a salary expectation, if you can. If they've been doing it long, they're going to be trying to get you to talk first. When asked "How much are you looking for?" you can sometimes turn it around with something like "I'm not really familiar with the pay scales in your area. How much do you have budgeted?"

Another good trick is, when they mention their number, is to _not say anything_ for the next 30 seconds. This can encourage them to keep talking. Also, there's no need to accept the offer immediately. Tell the person you need to think about the offer and you'll talk to them tomorrow.

If they're not offering what you think they should be offering, don't be afraid to say so (respectfully, of course). Either "That seems a little low," or "I was expecting something more in the XX,XXX to YY,YYY range," or "Is that your best offer?"

Since you've been working for them for a while, I would recommend bringing a list of specific things you've done for them that justify your worth.

I think the book Negotiating Your Salary: How to Make $1000 a Minute is pretty good. You can probably find it at your local library.
posted by Laen at 2:24 PM on September 27, 2005

Prepare.

1. If you haven't already, go back and collect anything that can be construed as a "pat on the back" from your supervisors or colleagues (emails, etc). If you've proven yourself indispensable, then this should be easy.

2. Illustrate, in as much detail as you think necessary, that you've met or exceeded all the performance goals laid out for you. NotMySelfRightNow goes into good detail here, so I won't repeat.

3. Have an idea of your fair market value. Visit the trade association website that corresponds with your profession and check out a salary survey. Arm yourself with facts. Everybody thinks they're underpaid. Prove you are and it strengthens your case and shows you've done your homework.

4. Tell your boss what you're going to do for the company in the future. You've proven yourself valuable - that's great - but they've already paid you for that. Talk about the next step(s). Why are you worth investing cash on?

5. Don't be adversarial. Don't be overconfident (some would say that no one is "indispensable", especially after 90 days). Instead, be confident, affable, and open to constructive criticism. If a raise is in the works, your boss/company will undoubtedly package that raise with more responsibility and/or tasks that you must work on to improve your performance. Let them know that you're willing to work for your reward.

Good luck!
posted by 27 at 2:25 PM on September 27, 2005

Don't take this personally: do not assume that you are indespensible. Your company survived before you were hired and can survive without you.

Having been on both sides of this position (and currently on your side), I recommend deciding what you need to be satisfied with your position. Salary is somewhat of a red herring. There are other ways to be compensated. Are you willing to trade salary for more vacation for example? Or for education, or perks (computer gizmos, nice office, travel to conferences)? 401K matching? Stock options? Don't let a few extra $K of salary obscure gigantic health insurance premiums or a stingy vacation policy. Do some research on mean and maximum salaries for your position and location if you are asked to justify the salary you want.

If you are a superstar then your company will simply make an offer that they expect will prevent you from leaving. Decide beforehand what this is -- minimum salary, benefits, vacation, etc. If their offer meets this, then you're done. Don't worry about whether you could have gotten a little bit more. If it's a long term relationship there will be other opportunities for minor corrections.

If your company does not think you are a superstar, then decide what the minimums are for you to simply want to keep your job. If they can't meet this then be ready to accept it and start looking elsewhere.

Be flexible in the negotiation. If they won't move on the salary, then offer alternatives.
posted by ldenneau at 2:31 PM on September 27, 2005

Classic negotiation techniques such as the Brooklyn Optician (where you add in extras bit by bit, like: "I want 10% ... plus fully comprehensive health ... for my partner and family ...") or the Monkey (where you turn the responsibility for the answer back on the questioner) only work if you have enough chutzpah (and enough power in the interview) to drive them. Max Eggert's The Perfect Interview touches on these techniques. Use whatever you can get away with, but it doesn't sound like you can be too hardball after 90 days.

I wouldn't recommend accepting less than they offer. It might work for NotMyselfRightNow, but I'd take the hypothetically offered amount plus the review in six months. Never ask for less than you are offered.
posted by scruss at 2:41 PM on September 27, 2005

I am up for a 90 day review at a new job. I've proven myself pretty indespensible in that time, so this meeting is to decide the terms of my permanent employment there.

Let me put this very, very bluntly: Your presence is not vital to the future of the company. It would probably cost them about 1/2 of your annual salary to find and train a replacement, but that's far from indispensable.

Now that I'm done with the warning, I'd note that it's very important that you get a fair package on your first job. Your pay in the future will largely be determined by looking at what you made the year before, and nudging it slightly upward. As such, a good starting point will pay off for the rest of your life.

Oh, and listen to NotMyselfRightNow... his advice about documentating your actual duties and skills is spot on.
posted by I Love Tacos at 3:33 PM on September 27, 2005

Give them the old basketball head fake. Pound away at salary, salary, salary, while quietly negotiating better benefits, working conditions, etc., which can be worth far more than salary in the long run. Be willing to drop your salary demands to close the deal. I got this info from a very good labor lawyer (and basketball player) who works for the big, bad corporations.
posted by weapons-grade pandemonium at 5:03 PM on September 27, 2005

Now that I'm done with the warning, I'd note that it's very important that you get a fair package on your first job. Your pay in the future will largely be determined by looking at what you made the year before, and nudging it slightly upward. As such, a good starting point will pay off for the rest of your life.

Well, I'm off to kill myself now.
posted by ThePinkSuperhero at 5:54 PM on September 27, 2005 [1 favorite]

The only thing I will add is that current research into negotiations shows that the single biggest predictor of the final price in a negotiation, is the opening offer. (I don't have links to the data right now b/c I am at home and it is not my area, but I can get you some if you would like). The good news is that is the one thing that you can fully control. Also, I agree with the above posters that benefits can compensate for salary. You should be trying to get the best combined package.
posted by bove at 7:33 PM on September 27, 2005

Can you quantify how much money you made or saved the company? Figure out what percentage you earned from that money and ask for a compensation package based on an increased percentage. Then make more money for the company, and go back to ask for more of it.

If you're a salesperson this is easy to quantify. If you're an accountant or something similar, then try to figure out the fair market value of your service.
posted by recurve at 9:29 PM on September 27, 2005

Also, recognize that salary negotiations are often as stressful for the manager as they are for the employee. If you are a valuable member of the team, the manager generally wants to do what he/she can to keep you satisfied and productive, and to put away the question solidly until the next period review. But in most companies, they also live within fairly rigid salary guidelines, that are in place precisely to limit the "wiggle" room a manager has. Such policies limit operational managers who may be weak negotiators from "giving away the store" to demanding employees, or putting the company at risk of lawsuits by allowing managers to "play favorites" with some employees in the pay envelope. So, mid-level managers often approach these meetings fairly defensively, since they often feel that they are going to have to lower expectations, or defend a policy with which they may have little input, and which they feel exposes the limits of their authority, to people who may be, much of the time, disappointed.

As a 90 day employee, you may not have enough time in the organization for a manager to be emotionally invested with your success to the point of having to go to his superior to argue for any exception to the salary review policy. Most likely, you are going to get the canned review, which from their perspective, will also indicate how likely it is you will "fit into the organization" and be "satisfied" with future reviews. If the offer is reasonable and in line with existing policy, you may not have much negotiation room at all, but neither would anyone else. If it is far short of your expectations, and you know your expectation are reasonable (by doing what others have suggested here), you need to understand that you may have a stay/leave decision to make yourself.

That's really what the 90 day review is all about. If you and your company can't come to agreement on both sides that is wholehearted, best to find out early on, and avoid further training costs and future disappointments.

You can take the defensive edge off the interview for the manager by being calm and forthright about your expectations (but do let them "go first" with actual offers and respond to that), and by seeking their advice as to how you can get what you feel is fair. That makes them a consultant to your future success. If you can, get any promises of future increases in writing, and if such are not forthcoming, make a summary memorandum of the meeting yourself immediately afterward, copied to your manager, stating your understanding of the terms of your next review improvement areas, and your expected rewards, with a polite request for a copy of the memo to go to your personnel file.
posted by paulsc at 5:26 AM on September 28, 2005

Anecdotal: All the best raises of my life have been when I had another job offer in my back pocket.
posted by poppo at 5:35 AM on September 28, 2005

well folks, it went quite well. My boss was quite surprised that i had done a self-review--which paid off. I am quite happy with the outcome and I think the manner in which the whole thing happened--it was actually kind of fun for everyone involved-- exposed my bosses to what kind of employee I am: a damn good one.

thanks for all your advice people! Mefi ROCKS!
posted by markovitch at 11:46 AM on October 5, 2005