EVERYTHING IS NEGOTIABLE
The first principle of
negotiation‑‑is to negotiate! Experts in the art are fond
of saying that EVERYTHING is negotiable‑‑including death and
taxes.
Many people assume that salary negotiation is not really possible in
large bureaucracies. The U.S. government, for example, has a GS rating
set for the job, strict salary policies which were passed into law by congress,
and volumes of regulations in the Federal Register. But even with all this
we have successfully guided negotiations for job classification, salary
steps within the GS rating, and dates for special salary review.
Thus, the personnel policies
and salary structures in Fortune 500 corporations should be given the
same weight and esteem as the offering price for a banana in a 3rd world
fruit market (where only new tourists and fools don't haggle over the
price).
GO FOR IT
So, salary, benefit, or
position negotiation is always possible; but, since negotiation means
conflict, is it always advisable? Yes, definitely. Why? You will most
likely win something, something bigger than the moments of anxiety you
may suffer while fearing rejection of your requests. Moreover, your new
boss will think more of you, because negotiation is an important skill
in any field: good negotiators are respected.
There is virtually no danger
with initiating negotiations. The only problem comes from stating firm
salary expectations that are too high or too low in the wrong point of
the interview. Asking for more money after an offer has been made or
asking for a raise in 6 months, or an extra week of vacation this year
will never cause an offer to be rescinded. The worst that can happen
is that your request will be denied; but, nothing ventured, nothing gained.
Therefore, take heart,
take courage, and go after what you want. You aren't always going to
win in negotiating but failing to negotiate is losing. Wanting a lot
and communicating a high estimate of your value will raise the image you
project to others. They will think you want this because you deserve
it.
Negotiation is largely
an art but there are a few principles that are worthy of consideration.
You should take these principles and the suggestions below and mold them
to your own style, and adapt the suggested phrases to your own way of
speaking.
MAKE THE SALE THEN CLOSE THE
DEAL
You have crossed many hurdles
in the employment process. You’ve made it to the final stages of the
second or third interview by having the employer's interest uppermost
in your mind; by focusing on his needs. You haven't been negotiating,
you have been selling and gathering information to use in negotiation.
This is not enough.
The first thing to negotiate
is the job itself. The important job description exists not in a file,
but in the mind of those around and above you. You need to be sure there
is not a culture clash, a bad personality fit, and the real job is one
you actually want. Better to find out now about all the reasons not to
accept an offer. Rapport be damned, you need to know if you can live
with the demands and environment. Most people don’t loose their job because
of technical skills. It is instead a matter of fitting into the organization.
Or perhaps confidence you can convert them to your creed. Only lots of
questions and diverse exposure can give you the relevant issues and important
questions you need answered. Remember the point is to land a job that
will position you for the long term. Due diligence is your responsibility.
Remember the lament: “If I knew then, what I know now.…”
The first principle of
negotiation is to get the offer before you negotiate. When the employer
extends an offer he has made a commitment. You must have him coming after
you so that he has a stake in maintaining the offer. Regard his offer
as your starting point for negotiation. Assume that the offer as stated,
is the minimum he expects to lure you with; assume that he expects to
negotiate and is willing to come up with more.
MAKE THEM AN OFFER THAT WILL
BE REFUSED
Another principle of negotiation
is related to the concept of expectations and limits. The advice that
flows from this concept is to start negotiation by breaking the mind set
of your adversary with wildly inflated demands, demands just this side
of ludicrous. You can always back down from a high figure or long list
of perks. The effect will be to raise the entire base of the conversation
because you are lifting the lid on your adversary's expectations. The
research shows (and you can see for yourself in any 3rd world fruit market)
that starting with a higher asking price and then coming down will yield
a better price than the conservative tactic of asking merely for what
you will accept. If you get all you ask for, you didn't ask for enough‑‑and
then it's too late. KNOWLEDGE IS POWER Perry Mason said that a good
lawyer never asks a question in court that he doesn't know the answer
to. It is important for you to spend time researching the compensation
practices of the company and the industry before you are asked your desired
salary.
There are a variety of
ways to do this. First, there are a number of published salary surveys.
We have several in the library including: The Almanac of Jobs and Salaries,
Top Management and Middle Management Reports by the Executive Compensation
Service, the Occupational Outlook Handbook, The Encyclopedia of Careers,
and articles from the National Business Employment Weekly.
Another resource for salary
and benefit information is executive search firms. Create a relationship
or use any relationships you have developed with a headhunter in your
field. Source Finance and Source EDP will hand you a salary survey for
their specialties.
A strong advantage of networking
is that your contact may be able to tell you the salary range of the position.
Sometimes even an anonymous call to the personnel department will yield
the desired information. NEGOTIATION = PERSUASION
Since winning in negotiation
is another sales job, the third principle embodies the results of sales
research. Of prime importance is to present logical arguments. Also
important is to listen carefully and make an effort to understand your
adversaries concerns. The basics of sales effectiveness are to: show
enthusiasm, give evidence of your effectiveness with accomplishments,
be concise, prepare effective responses to objections, and maintain eye
contact. Basic confidence in what you are selling (your future work)
is more important than any clever negotiation retort.
Successful negotiators
who win concessions have knack for making their needs sound quite reasonable.
The adversary thinks; `For a person of his status, this is the expected
thing.' Winning sympathy for your situation is a talent that is hard
to teach. Think back over your experiences and recall people who engendered
this feeling in you. Recall their words and their style. Take an experimental
approach to your own behavior and try a few of the methods in casual situations.
How can you make it easy for the other person to have empathy for your
situation? How can you phrase your needs to seem reasonable? Discover
what works for you in winning sympathy and getting the other party to
make concessions.
GIVING TO GET
Each party in negotiation
has two lists, a get list and give list. That's four lists. When enough
important items mesh, a deal is struck. Some of the items are tangible
and openly discussed such as salary and job descriptions. Most items
on each party's list are gathered during the interview or assumed to exist.
Your get list contains the following:
1. Interesting, challenging and meaningful
work.
2. Growth on the job and advancement opportunities.
3. Title, power, responsibility, status,
and prestige.
4. Regular feedback and evaluation including
recognition and approval for good work.
5. Fairness in treatment; a safe, legal,
ethical and business‑like environment.
6. Friendly co‑workers, congenial
interactions.
7. Job security
8. Salary
9. Benefits and perks
(Not necessarily in that order.)
The employers expectations include:
1. Applies technical skill to tasks at
hand.
2. Learns the job in a reasonable period
of time.
3. Creative in solving new problems.
4. Works productively alone, with others
and in groups.
5. Able to plan and organize work efforts
for self and others.
6. Can supervise and direct others.
7. Good use of time, money, and resources.
8. Makes responsible decisions; exercises
good judgment.
9. Places company demands over personal
prerogatives.
10. Conforms to company and group customs
and makes an effort to fit in.
11. Takes on company values and helps maintain
good public image.
Many of these factors are not tangible,
they are psychological. The only job you would want to have, is one where
there is a good fit or good psychological contract. A company doesn't
really want the "best possible person with the best qualifications",
it wants a good fit. You don't want a job way over your head or far under
your capabilities. The match is everything.
Since both you and the employer have
very long lists of items to get and things you are willing to give, it
is possible to trade off certain items. For example you may increase
the salary in return for enlarging the job description. You may forego
current salary for incentive compensation. The important advice here
is to communicate: describe your get list priorities and what you are
willing to give. If someone is more important to you than to them, you
have the opportunity for mutually beneficial exchange.
Now that we have some basic principles
let's explore some sample situations and conversations.
DEFER SALARY DISCUSSIONS:
DUCK AND PARRY
For an employer trying to price an unknown
commodity, a good indication of a person's occupational worth is what
a person has been or is currently being paid. Thus the popularity of,
"What are you currently earning?" The question is fraught with
peril for you. You could screen yourself out of the job, drop thousands
of dollars of potential salary increase with your response, or you could
rupture your career with a lie. Employers can learn your current salary
by asking to see your payment stub or W‑2 form. There are agencies
which specialize in making background checks. Even simple verification
of your employment through the Personnel Department could reveal your
true earnings. Misrepresentation for the purpose of inducing an inflated
contractual offer is called fraud.
Defer and delay salary questions as
long as possible. It is seldom to your advantage to answer the current
salary question directly and many candidates successfully avoid it completely.
The important exception is for search firms who must know you to sell
you. For employers here are some suggested answers to the question, "What
are your current earnings," which avoid a numerical answer.
If it is still early in the interview
process you can say something like, "Salary is an important consideration
but I'd like to hammer out what the job is all about first. What are
the most important parts of the job description and how will they change
over time?" Or, use some other question to deflect discussion of
salary. You may prefer something like, "Yes, I want to talk about
compensation too. What are the company benefits?"
Another strategy is to dash the question
and start on a new tack. "My current earnings are irrelevant to
what I can do for you here. What has happened to the people who have
held this job in the past?"
Beware of cat and mouse with, "Yes,
I will tell you my current salary, will you tell me the salary range for
this position?"
Another approach uses a bit of humor
to get the message across. "Well I'm doing well enough to keep my
wife in the tennis club and keep my cruiser full of gas. I'm here to
continue and advance my success."
If the chemistry is right totally honest
response might be appropriate. "In all fairness, if you were in
my position would you want to talk about your salary at this stage?"
PRICE YOURSELF FOR ME
The strategy for avoiding the current earning
question is the same as another nemesis. "What kind of money are
you looking for?" In the best possible response to this question
you will discover the salary range for the position. This is a three
part tactic:
Step 1. Start with a distraction or trial
close. A distraction could be the prime criteria you initially set for
your next position. A trial close could be "Does this mean we have
finished discussing everything else and are beginning to design an offer?"
Or, "Where are we, in negotiation? If we agree on compensation are
you prepared to offer me the position?"
Step 2. Whether positive or negative, break
in with a question to distract them from the issue. Such as, I'm primarily
interested in the right position at the right company." Or, "Salary
is certainly important, but I haven't settled on any single figure as
the magic number." Or, "We seem to have a good fit between
my qualifications and your requirements."
Step 3. Then complete the tactic with, "Since
you brought it up, what is the salary range for this position?" IF
YOU MUST
Most employers will eventually insist
on learning your current income. When you must reveal your salary, quote
a range with salary only at the bottom, and salary plus 25% to include
items from the compensation mix such as: the value of stock options,
your raise this year, incentive compensation, and a certain number of
dollars for special perks, etc., and expected bonuses but not standard
benefits. If you learn that the figure you named is too high you can
retreat by explaining the basis of your calculations.
When all else fails and you can no longer
withhold your current salary or salary requirements, you still have some
more tactics. One tactic helps you recover from stating a number that
is too high or too low. The trick is to backpedal about whether the figure
you named was just base salary or the value of the total package with
salary plus bonuses, incentives, ESOP, etc.
When asked how much you want, respond
with something in the abstract. "A position like this ought to be
worth between $XX,000 and ($XX,000 + 20%)." Go ahead and be optimistic
about the salary range. Then determine from the interviewer whether this
is too high or too low. Now backpedal if necessary with, "Were you
talking package or base? The numbers I just stated were base (if too
low) or package (if too high). To that we would have to add/subtract
the full range of benefits."
You may wish to say something like,
"How much are you looking for," is to quote a source. "The
Executive Compensation Report says the salary range for a position like
this, in this size company, is $XX,000‑‑is that accurate?"
SALARY NEGOTIATION FORMULA
Let us assume that the salary range for a
position is 50% above the bottom of the range. Thus a job that starts
at $40K will go as high as $60K. An offer usually is expressed at the
bottom of the range. You can retort that you are looking for a position
in the $50K to $70K range. Thus you have set up a negotiation range in
the $50K to $60K zone. The formula is employers range equals bottom plus
50%; the range of your expectation equals that midpoint plus the spread
between the employers high and low.
DON'T SELL YOURSELF TO DEATH
Don't get the idea from all these phrases
and tactics that you will ever want to use more than one or two of them.
Beware of talking too much after the company is sold on you. There is
often a point where silence is required on your part, a golden evaluative
silence in which a positive decision occurs.
RESPONDING TO AN OFFER:
When an offer is made, wait for all
the terms to be stated. Clarify anything you aren't sure of. Know the
immediate take home pay and all relevant details: assumptions are dangerous.
There are several successful ways to
reply to the first offer to win more money on the spot. Realize that
the first offer is the minimum with which they hope to win you. Basically
the idea is to get them to come up with more money or benefits immediately
with very little negotiation. Here are three methods.
‑THE DIRECT APPROACH
A strong negotiation position is a wonderful
thing. When a salary figure is mentioned, make a direct statement such
as, "That’s not enough, I need more than that." Then shut up,
because the next one to speak, loses something in the negotiation. Or,
if it is true, you may flatly state, "Look, frankly, I was earning
$XX,000 in my previous job and I’m here to advance my career." Another
version is to say, "I have another offer for $XX,000. I prefer this
position, and you people, but I don't want it to cost me $X,000. (Don't
BS this one, it could come around and bite you.)
‑THE TWO THOUSAND DOLLAR POUT
If you have steel nerves you may put
on little act when you hear the amount of the offer. Appear a little
shocked, furrow your brow, look hurt and disappointed, purse your lips,
and look down at the floor. Ham it up with a sigh, a slight nodding of
the head, and a hard swallow. Say with your body, not your mouth, that
you are really sorry but you aren't going to be able to live on that amount.
Within 30 seconds of silence you may win a few thousand dollars more.
‑TOGETHER
If you have established a good rapport
with the interviewer you may want to try the mutual problem‑solving
approach. Express your opinion that the salary is a bit low and begin
to talk about your needs in a way that sounds very reasonable. End your
last sentence with, "...Jethro, what can we do about that?"
‑YES,BUT
The most common and safest approach
is to thank the interviewer very much for the offer. Then express outward
enthusiasm for the company, the interviewer, the job, the future potential,
the co‑workers‑‑everything, everything but the immediate
take home pay. Ask for a specific percentage increase, "Can the
salary be raised 10%?"
This can even be used after the methods
described above to get more and then more again. Your adversary may not
be able to come up with more money on the spot, he may have to reflect
or talk with others. A phone call in a couple of days may come with all
the money you asked for.
Now you are in the heart of salary negotiations.
Your priorities are to settle 5 items:
1. Salary,
2. Special benefits such as incentives
and perks,
3. Starting date,
4. Salary review date, and
5. How long do you have to accept the offer.
Early salary reviews mean a raise that
much sooner. Item 5 is of utmost importance. You want a long time to
"think" about the offer before making such an important commitment.
Your hidden purpose is to garner other offers, but say, "I'd like
to have a week or two to think about the offer. It's an important move
for me and of course my family will have to be involved." Or, try
saying, "I've promised my family a vacation for well over a year.
I'll have an answer when I return." Now it is time to hurry up the
other companies you are interested in.
It happens so often that there must
be a corollary of Murphy's Law which states: the less desirable job offer
arrives first, while a better offer is pending. You will probably have
to wrestle with the question: is a skinny bird in the hand worth more
than a fat one in the bush? There are, of course, many individual factors
to consider.
It is certainly appropriate to inform
the fat bird that: You have another offer, that it will expire, that
you prefer this company, and hope they can decide to make you an attractive
offer quite soon. Telling the skinny bird the truth can be done to beg
for more time, but runs the risk of communicating that you consider them
to be your second choice.
There are many factors to consider in
knowing the full force of your bargaining position. Is there another
candidate? How desperate are they for someone to come in and fill this
spot very soon? How long has the company been looking? Has the position
recently been offered to someone else and refused?
Only reject an offer when you are certain
that you have the job you want. It is extremely important to reject an
offer very carefully. After all, anything can happen‑‑as
soon as you reject the offer, they may counter with more money. They
may offer another position more attractive than the first‑‑if
not now, then sometime in the future. And, as always, the people you
deal with today could be your co‑workers tomorrow. ONE CAVEAT
A word of caution should be included
about over‑negotiation. It is rare, but, you could win so much
that resentment will hamper your future progress. Resentment could linger,
allies may be lost.
Ideally you will have a number of offers
simultaneously. This may seem like a happy prospect but, in truth, is
agonizing. Most often, people wisely choose the offer with the best money.
There are clearly many more factors which may override immediate take
home pay. Different potential jobs are difficult to evaluate because
so much is unknown and your professional career is riding on your decision.
Eventually your decision will be your first impressions plus later inclinations
and the cumulative weights of various factors. It will ultimately be intuitive.
Prepare for the inner sorting and shuffling with a complete array of information
on your alternatives. Use the Position Rating Form for each potential
position.
POSITION RATING FORM
Instructions: For most items rate with:
A: quite good;
B: good enough;
C: not great.
You may use + and ‑ if you want.
Use plenty of specific notes wherever possible, i.e. compensation numbers,
annotations on compatibility, gut reaction, etc.
Next, rate the capitalized headings
for each group with the same scale as above.
Finally, after considering and weighing
all factors, arrive at an overall rating and place it here ______.
Company:
Company size:
Title:
Job description:
COMPENSATION_____
__________salary
__________take home pay
____rewards for merit and achievement
____benefits, fringes
____perks
_________hours per week: weekends, nights?
____stress/pace: too high, to low
SECURITY________
____stability of job
____integrity of company
____stability/growth of company & industry
____Would you invest money in this company?
PHYSICAL_______
________commute time
________commute cost/month
____location
____relocation?
____pleasant environment
____travel requirements: % away, ,miles/week
____safety
CAREER ISSUES_____
____opportunity for income growth
____career advancement potential
____prestige of job
____accountability
____status of department
____reputation of company
____learning opportunity
____make and maintain contacts with colleagues
____state of art resources
COMPATIBILITY_____
____boss: task‑oriented/people‑oriented,
can delegate, competent
____associates
____subordinates
____social environment: congenial, stimulating
____company culture: uses of power, laid
back, neurotic
____values, benefit society
____family impact
THE WORK_______
____uses my skills and strengths
____challenge
____responsibility
____clarity of objectives
____supervisory tasks
____feedback, approval
____degree structure
____creative opportunities
____variety of tasks
____flexibility of execution
____see whole process
____decision making/control
____chance to exercise leadership
____give & receive recognition
BENEFITS AND PERKS_____
medical insurance
life insurance
pension plan
educational assistance
dental insurance
optometric insurance
moving assistance
country club, society memberships
physical exams (stress, cv. etc.)
holiday, vacation
sales commissions
deferred compensation
company stock
stock options
incentive pay
performance shares
accelerated salary reviews
cash bonuses
low interest loan
profit sharing
company car/car expenses
personal secretary
tax counsel, legal services
investment‑fund management
outplacement assistance
employment contract
guaranteed minimum period of employment
guaranteed severance package
GUT FEELING______
____future fantasy: envision a few years
in the future.
____somatic/emotional reaction: For a full
minute, imagine clearly being at work, doing your job as you expect it
might be; then sense your body's reaction.
____Light bulb test: place this option in
your mind's eye‑‑how brightly does it light up?
The following excerpt is from the Book of
Perks by James Baehler. It has some good insights on how negotiating
strategy is translated into conversation. EARNING YOUR PERKS THROUGH NEGOTIATION
"Pete has a wish list of perks that
includes the following, in order of priority:
1. A company car
2. An annual performance bonus
3. Three weeks vacation
4. Options on $50,000 worth of company
stock
5. A $50,000 loan for five years at 5%
interest
6. First‑class air travel
7. Membership in a health club
Is Pete going to get all that he asks
for? Probably not, but he's going to get a lot more than if he waits
to be told what perks come with the job. What he must guard against is
asking for so much that he is regarded as greedy or unrealistic, or so
little that the boss gets suspicious ("If I can buy this guy so cheap,
there must be something wrong with him"). Pete will be negotiating
with the company president and must evaluate his new boss to assess what
the boss can and cannot do within his authority. He must also accurately
judge how fervently he is wanted, remembering the call‑girl rule:
"Something is always worth more before its purchase than after."
Once he accepts the new job and delivers his body, his negotiating strength
will have all but vanished.
Pete will conduct his negotiations in
a spirit of good humor and with an attitude of apparent reasonableness.
He will strive to create the impression that he is eager to tackle his
new responsibilities but that he must consider his future and his family's
well‑being in a business‑like way. The negotiations might
go something like this:
THE NEGOTIATION
Company president: Pete, I'd like to confirm
the information I'm sure you received from our personnel manager, we're
pleased to offer you the job of director of advertising.
Pete: Thank you, sir, and I am eager to
get to work and implement some of the ideas we discussed in past meetings.
Before we discuss my starting date I'd like to come to an understanding
about my compensation package. ["I'm not going to commit myself
to the job until I know all the details."]
Pres.: That sounds like a good idea. Pete,
we'd like you to start with a salary of $50,000 per year and, of course,
you'll be immediately eligible for our extensive medical benefits and
our pension plan. You'll have two weeks vacation and after five years
you'll be eligible for an additional week. How does that sound to you?
Pete: To be honest, sir I had thought your
offer might be a bit more attractive. I'm currently making $43,000 and
I'm scheduled for a merit increase next month. ["Not true, but there's
no way he can check."] On that basis, $50,000 is not enough to persuade
me to change companies.
Pres.: I see. We'll I'd be interested in
your thoughts on a salary that would be attractive to you. But I have
to say that we must keep the salary for this job in line with similar
positions in the company.
Pete: ["Horsefeathers! There are no
similar jobs within the company and, even if there were, I'm not similar
to anyone else in the company. If you want to get a top‑flight
advertising guy you are going to have to pay for it, whether it's me or
someone else."] Mr. Jones, I want to emphasize that I consider the
job you've described as crucial to the marketing effort of your company.
Unless your new director of advertising knows what he is doing, your revenue
is going to suffer, no matter how hard the sales force works. Would you
agree with that? ["Let's not forget, this is a job that directly
affects the sales and earnings of the company."]
Pres.: Yes, I would agree with that.
Pete: Fine. Now a job like that should
have a salary commensurate with its importance. I think the position
warrants a salary of $65,000 a year. ["I'm taking a chance starting
this high. He might be put off and look for someone else, but I think
he'd prefer to negotiate."]
Pres.: Good Heavens! Pete, we could never
pay that much for a director of advertising. Why, some of our vice presidents
don't make that much. We might be able to go a little higher than $50K,
but we couldn't approach what you're asking.
Pete: ["What do I care what your vice
presidents are making! Your offer of $50K was too low and I countered
with a bid that was too high. Now let's bargain!"] Mr. Jones, I
like the challenge and opportunity that your company offers, but $50,000
does not seem adequate for the responsibilities of the position. ["The
ball is in your court."]
Pres.: Pete, I think I can understand how
you feel, and because we do want you with us I think we might be able
to start you out at $55,000. How does that sound to you?
Pete: ["It sounds fine to me but I'm
not going to let you know it."] Mr. Jones, $55,000 might be acceptable,
provided other items were part of the package.
Pres.: What other items?
Pete: I've given the matter considerable
thought and I'd like to propose this. Since my salary needs could not
be met, I would like to have a company car, a loan of $50,000 for five
years at 5‑percent interest, a 10,000 annual performance bonus,
options of $50,000 worth of company stock, three weeks vacation, first‑class
air travel, and membership in a health club. ["I'm taking a chance
that he'll be offended and walk away, but if he does, I can be happy staying
where I am. Let's see how badly he wants me."]
Pres.: Pete, there's no way in the world
wee can agree to that list of perks. I realize the salary we offer is
not what you were thinking of, but you're just asking for too much."
Pete: ["Of course I'm asking for too
much. Now we'll find out how much you're willing to give."] Well
I don't necessarily agree that I'm asking for more than a comparable job
would offer at another company, but what do you think would be equitable?
["You do want to be fair about this, don't you? Hardly. You want
to buy me as cheaply as possible, but you want to give the appearance
of fairness."]
Pres.: Suppose we do this. I'll agree to
the first‑class air travel, the health club, and the three weeks
vacation. How does that sound?
Pete: ["It sounds lousy. I want something
that puts money in my pocket."] Those items are nice, Mr. Jones,
but they are all intangible benefits. I need some items to make up for
the $10,000 of salary I agree to give up. ["It's always nice to
give up something you never had, especially when it puts the other guy
at a disadvantage."]
Pres.: Pete, I just don't know how I can
offer at more than I have.
Pete: Don't forget, Mr. Jones, if I leave
my present company, I lose considerable money that has been placed in
a profit‑sharing program by my company. If I stay another three
years I will be fully invested in that entire amount. ["It only
comes to a few thousand dollars so far but, once again. He doesn't know
that."] That is why I am asking for the stock options and the loan.
Pres.: Pete, the stock options are just
not possible, those are reserved for vice presidents and up. I may be
able to do something on the loan. Suppose we agree to the loan as you
described it ‑- but it would have to be fully paid up at the end
of five years.
Pete: That would be acceptable, Mr. Jones,
it seems that all we have left to discuss is the performance bonus and
the company car. ["I haven't yet put any real money into my pocket."]
Let me ask you to consider this: There won't be any relocation expenses
involved if I join your company, which may not be the case if you have
to find someone else. ["A reminder that he may have to start this
whole process over again ought to shake him up a little."] I know
you've tried to be equitable during our negotiations and I appreciate
that. I want to be reasonable about this also. You'll be saving more
on reallocation expenses, and I need some cash to make up for the lower
salary. I won't insist on both the performance bonus and the company
car. I'll let you decide which one I should have. ["It's a forced
choice. Heads I win: tails you lose."]
Pres.: Pete, the performance bonus is out
of the question. If I provided if for you, every manager in the company
would be after me for the same benefits. Perhaps, I can authorize a company
car on the basis that you need to travel quite a bit to meet with our
sales people and the ad agencies we do business with. I'll see that you
get the car if you'll agree to all the other parts of the package.
Pete: ["Congratulations, you finally
made an offer of your contingent on my doing something. Your negotiating
skills are improving, but it's a little late."] That would be fine,
Mr. Jones. We've got ourselves a deal. Let me just summarize to make
sure we're clear on the details. The starting salary is $55,000 a year.
In addition, I receive the use of a company car, a $50,000 loan at 5‑percent
interest payable in full at the end of five years, three week vacation,
first‑class air travel, and membership in the health club.
Pres.: You know those last two items may
cause some problems. I think we need some guidelines there. I would
ask that the first‑class air travel be restricted to flights two
hours or more and that the health club fee not exceed $500 per year.
Pete: That is fine with me, Mr. Jones.
I am looking forward to starting with your company just as soon as possible.
Pres.: Pete, we're glad to have you with
us, and if you do your job as well as you've negotiated today, we're all
going to be very happy.
Pete: Thank you, sir.
Aside from Pete's successful effort to secure
the salary and perks he wanted, the most interesting aspect of this type
of negotiation is that both sides develop respect for one another. Pete
has learned that his new boss values Pete's services and is willing to
listen to reason when presented with reasonable arguments. The boss has
developed respect for Pete's business acumen, for knowing the value of
his services and not settling for less. Each party knows the other is
serious about his work and is not hesitant to protect his legitimate interests.
The basis for a mutually satisfying business relationship has been established."
SEW IT UP
After all of the negotiation has taken
place, you must make sure that you have a contract that is mutually agreed
upon. You should suggest that the company send you a letter outlining
the details of the offer including all pertinent points. A letter is
important to insure your position in case things start to fall through.
God forbid, but the person you negotiated with could have an accident,
a merger could throw the company in a turmoil. Any of a dozen things
could happen for which you need a letter (which is a contract) as insurance.
Say that you will call after you receive the offer in the mail.
If you want to include some of the other
things that were discussed, but not included in the company's letter,
your response should be a letter of acceptance. Once a letter is received
and not responded to, it constitutes confirmation of an oral contract,
which is legally binding.
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