10.8 Sample Assignment: Salary Negotiation

 Assignment

Identify a job that you would like to have, or use the job that you currently have.

  1. Imagine you have been offered this job, but the salary is about 15% below the market rate for this type of job.
  2. Work through the first five steps in the OB Toolbox “Seven Steps to Negotiating a Higher Salary.”
  3. Write a 2-page paper summarizing your preparation work, and explaining the strategy you expect to use in the negotiation.

Seven Steps to Negotiating a Higher Salary

  1. Step 1: Overcome your fear.
    • The first step is to overcome your fears. Many people don’t even begin a salary negotiation. We may be afraid of angering the boss or think that because we are doing a good job, we’ll automatically be rewarded. But, just because you’re doing a good job doesn’t mean you’ll automatically get a raise. Why? If you don’t ask for one, the boss may believe you’re satisfied with what you’re getting. So why should he pay you more? Imagine going into a car dealership and being absolutely delighted with a car choice. The sticker price is $19,000. Would you pay the dealer $23,000 just because you really like the car? Of course not. You probably wouldn’t even offer $19,000. If the car was up for auction, however, and another bidder offered $20,000, you’d likely increase your offer, too.
    • That’s what salary negotiation is like. Your boss may be thrilled with you but at the same time is running a business. There’s no reason to pay an employee more if you seem satisfied with your current salary.
  2. Step 2: Get the facts.
    • Before you enter into the negotiation, do some background research. What are other companies paying people in your position? Check sites such as Payscale.com, salary.com, and salaryexpert.com to get a feel for the market. Look at surveys conducted by your professional organization.
  3. Step 3: Build your case.
    • How important are you to the organization? How have you contributed? Perhaps you contributed by increasing sales, winning over angry customers, getting feuding team members to cooperate, and so on. Make a list of your contributions. Be sure to focus on the contributions that your boss values most. Is it getting recognition for the department? Easing workload? If another employer has shown interest in you, mention that as a fact. However, don’t use this as a threat unless you’re prepared to take the other offer. Mentioning interest from another employer gets the boss to think, “If I don’t give this raise, I may lose the employee.” (By the way, if you don’t feel you have a strong case for your raise, perhaps this isn’t the time to ask for one.)
  4. Step 4: Know what you want.
    • Set your target salary goal based on your research and the norms of what your organization will pay. Now ask yourself, if you don’t get this figure, would you quit? If not, are there other alternatives besides a salary increase that you’d consider? For example, would you accept a higher title? More vacation time? Paid training to learn a new skill? Flexible hours?
  5. Step 5: Begin assertively.
    • Start the discussion on a strong but friendly tone. “I think I’m worth more than I’m being paid.” List the ways you’ve contributed to the company.
  6. Step 6: Don’t make the first offer.
    • Let your boss name the figure. You can do this by asking, “How much of a raise could you approve?” However, if the boss insists that you name a figure, ask for the most that you can reasonably expect to get. You want to be reasonable, but you need to allow room to make a concession. Your boss will assume your opening number was high and will offer you less, so asking for the actual figure you want may leave you feeling disappointed.
    • If the boss opens with, “The salary range for this position is $66,000 to 78,000,” ask for the high end. If your goal was higher than that range, challenge the range by explaining how you are an exception and why you deserve more.
  7. Step 7: Listen more than talk.
    • You’ll learn more by listening rather than talking. The more you listen, the better the boss will feel about you—people tend to like and trust people who listen to them.
    • If you can’t get a raise now, get your boss to agree to one in a few months if you meet agreed-upon objectives.