What to avoid when negotiating your salary

negotiatingMost of us do not change jobs often enough to hone our skills in terms of salary negotiations. Nor do we possess lots of experience when it comes to negotiating a better salary at our salary review time. As a result it is not uncommon for people to enter into negotiations on the basis of hearsay and/or dangerous misconceptions.

What follows are negotiating approaches that you should avoid. Some may sound great at the pub or over a dinner conversation and they may have even worked for an individual that you know but that does not mean they represent sound negotiating techniques.

1. Avoid the aggressive cowboy approach. The cowboy approach describes that person who rushes into negotiations with his/her guns ablazing, i.e., the person who generally thinks that they’re irreplaceable which entitles them to ask for unreasonable amounts of money. The cowboy negotiator believes that an uncompromising approach to negotiating is the best approach and that showing signs of weakness will only serve to undermine their campaign. They either get what they demand or they’re out looking for another job (which is common). Unless you are, in fact, irreplaceable then steer clear from this approach. And even if you are irreplaceable I would recommend a more modest approach.

2. Equally as dangerous as the aggressive cowboy is the submissive saint. This person does not want to rock the boat or upset anyone. They’re so anxious at keeping the peace they’re willing to accept less than what they deserve. In fact, the very thought of having to negotiate sends shivers up their spines. This approach may work with some employers, but on the whole submissive saints are generally liked and underpaid – and they know it.

3. Avoid playing the politician. The politician promises the earth to get his/her extra money but then finds a million excuses on why they can’t deliver. Politicians have short-term victories, but these soon sour. Their bosses soon wake up to them and refuse to play their game. Politicians tend to lack credibility within the organization and are not highly regarded. If you make a commitment make sure you can keep it. Good negotiators think beyond short-term expediencies.

4. Avoid the “she’ll be right” syndrome. In other words, moderate your reliance on your employer (unless, of course, you have an enlightened employer who has proven their worth). Whilst trust and cooperation in the workplace is an important ingredient for organisational success it should not be the overriding consideration when it comes to salary negotiations. Be sure you thoroughly prepare your case by ascertaining what the market is paying for people such as yourself and also be sure you can articulate clearly how you’ve added value (or will add value) to the organization.

5. Avoid playing the jealous sibling. The jealous sibling finds out what other individuals are earning (within their organization as well as other organizations) and absolutely wants to be earning the same amount or more. Jealous siblings fail to take into consideration a whole lot of factors including their own abilities – on the whole they tend to overestimate their contributions. Whilst it’s great to know what the market is paying for your skills you shouldn’t be concerned about what other individuals are earning. Chances are that the figures you’re hearing are highly unreliable.

Salary negotiation tactics that work

winIf you’re feeling nervous about negotiating a new salary or your yearly increment it might comfort you to know that you’re not alone. A recent survey indicated that 60% of Australian workers feel ill-equipped to deal with salary negotiations.

But it’s not all bad news. You’ll be pleased to know that with a little preparation you can dramatically improve your salary negotiation skills, and more importantly the level of your total salary package.

Tactic No 1
Be very aware of the fact that salary negotiations begin with the interview. The better you interview the more inclined will be the employer to give you extra money. So make sure you’re thoroughly prepared for the interview.

Tactic No 2
If you’re going for a job as an external candidate never be the first to talk about money – you’ll probably signal that your primary interest lies with money and not the job.

Tactic No 3
Delay talking about money as much as possible. The more you delay the better off you’ll be because you’ll have more time to establish your value to the organization. Once you’ve convinced them of how good you are then you’re in a much better position to negotiate more money.

Tactic No 4
Work out what the current market rates are for someone with your experience. If you don’t know what the market is paying you may be underselling or over pricing yourself. A great way to find out what you’re worth is through Monster’s Salary Calculator.

Tactic No 5
Know your bottom line. In any negotiation it’s important to know what line you’re not prepared to cross. By knowing your bottom line as well as the current market rates you’ll be in a good position to know where you can commence your negotiating.

Tactic No 6
If the employer insists that you make the first move a good rule of thumb is to make your opening bid between 10% and 30% above your bottom line. What percentage you pick will depend on several factors including how much they want you (assuming you know) and the state of the labour market. Generally speaking if there’s a big demand for your job and not much of a supply you may be in a good position to make your opening bid higher.

Tactic No 7
Always think win win. Try to negotiate an outcome that works for you as well as your employer. Exploiting a vulnerable employer may have short-term monetary benefits but will not hold you in good stead in the long term.

How to avoid nasty surprises at salary review time

avoidNastyA recent survey conducted by TMP indicated that about 50% of Australian workers believe they’re not getting a fair deal at their salary review time; and 75% of workers feel that their salary does not accurately reflect the work they do.

Understandably, we lay the responsibility of our salary short-falls squarely on the shoulders of the employers, however, there are definitely times when we can influence how much we earn. By being pro-active and showing some organisational nous you can increase your say in terms of your earning capacity and avoid those negative salary review surprises.

Here’s what to do:

1. Do not make the mistake of relying entirely on your manager to closely monitor your achievements/progress. Some managers might have the time to do this, but most are too busy doing other things. Regardless of whether your organization has a formal individual performance management plan in place make sure you closely monitor your own progress. Track your achievements by writing them down in your work diary. Do not just include your major achievements either. Smaller achievements when added up over a year or six months look very impressive.

By doing this you will at salary review time be able to produce a detailed and accurate record of all your achievements for the year. Such information is difficult to refute, especially by managers who haven’t been managing you properly.

2. Be sure you stay abreast of all the important changes and priorities of the organization. By knowing what’s important for the organization or section your work in you will be able to make better quality decisions; i.e., decisions which are more relevant and useful to your employer. Few things impress a manager more than an employee coming up with timely solutions that address an organisational priority.

3. Make sure you record your invisible but important contributions. Invisible contributions are those little things, which we generally do everyday and make a huge contribution to the running of the organization. They’re called invisible because no one knows you’ve done them and they’re important because without them the organization cannot function properly. All too often we’re not given any recognition for our invisible contributions. So it’s up to you to begin recording them along with your other achievements mentioned in section 1 above.

An example is: successfully handling an irate customer over the phone and thereby not losing them as a customer, not to mention preventing potential bad mouthing of your organisation (what could be more important to your employer?). Another example is providing consistently excellent customer service by doing the little things such as returning calls on time, taking the time to listen properly and explaining things clearly. If you think about it the list is virtually endless.

The key to recording invisible contributions is mentioning the outcome/s of your actions. Saying you diffused a difficult situation does not have the same impact as saying: “As a result of calming the customer down I was able to retain him on our books.”

4. Be sure that your manager is aware of your achievements and contributions on an on-going basis. Do not wait until salary review time before you surprise them with all your great work. A good manager should be having regular meetings with you to discuss your work, but unfortunately this does not always happen. So it’s up to you to make sure they’re kept informed of what you’re doing. Keeping them informed does not have to take place in formal situations. It can be as simple as mentioning it over the water cooler or sending them a quick email.

A Three Step Negotiation Process That Delivers Results.

negSalaryIt’s time for you to negotiate a pay increase. You’ve worked hard all year and you deserve it. What do you do?

Most people take a deep breath, walk into the boss’s office with cap in hand and humbly ask if they could have more money because, “Well…it’s been a year since my last increase and I’ve been working pretty hard.” This approach may work, but it’s demeaning and unprofessional. More importantly, it is not an approach that will maximise your outcomes.

A much more effective approach and one which allows you to keep more of your self-respect is as follows.

Step 1: Preparation

For effective salary negotiations you should prepare the following:
The facts
1. What the current market rate range is for someone in your industry and with your experience.
2. Your key achievements for the year including how you’ve added value to the company.  Feel free to collect as much information as you feel is necessary to make your point.

Your Objectives
Once you’ve collected your facts work out what your objectives are.  In other words, how much of an increase do you want and what is your absolute bottom line. Make sure your objectives are realistic.

Decide on a Strategy
1.  Decide on the best time to make your approach. Make an appointment with you boss or HR manager and tell him/her that you want to discuss your salary increase.
2.  Try to anticipate the other party’s counter arguments and what their needs are.
3.  Decide on what aspects of your package you’re prepared to be flexible with.
4.  Decide on what your opening/maximum bid will be.

Step 2: Discussion

If you prepared properly you’ll be in a much stronger position to enter into discussions. During the discussion:
• Attempt to have the other party open the bidding. Ask the question, “May I ask what sort of pay increase you’re thinking of giving this year?”
• Your opening bid should be your maximum position. Don’t apologise for it.
• Look for signals that may indicate a willingness to compromise. Try to work with those suggestions.
• Avoid inflexibility, be prepared to give and take.
• Try to work for a win/win outcome. Win/lose scenarios mean that one party feels hard done by. This is not a good long term strategy. Remember that you’re negotiating with people that you work with.
• Make sure you practise effective interpersonal communication skills. Never raise your voice or show signs of anger no matter how badly you think the other side is behaving. Stay in control by sticking to your strategy.

Step 3: Closing

This should be relatively simple but many people leave important details unresolved (such as when the increase will take effect). When closing make sure you get a firm and clear commitment to everything you’ve agreed on. Seek clarification on:
• Timing of increase/s
• The specifics of any conditions that need to be met. It’s very important to be as specific as you can otherwise you may run into interpretation problems later on.

To help you do this you can say, “Thank you for your offer/s. Before I leave I’d quickly like to confirm exactly what it is that we’ve agreed upon just in case I’ve misunderstood some of the points made.”

Or you could say, “Thank you for your offers. I’ll put all this in writing and have it on your desk by tomorrow.”

Good luck!