Salary Negotiation

1. Salary Negotiation Dr. Monika Renard Florida Gulf Coast University

2. Negotiation “ Negotiation is a back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed. Negotiation is the highest form of communication used by the lowest number of people -President John F. Kennedy ” “ ” ”

3. Salary Negotiation Process • When NOT to Negotiate • Prepare to Negotiate Salary • Recognize Buying Signals • Build and Use Powerful Arguments • Use Negotiation Styles • Evaluate the Offer • Multiple Offers

4. When Not to Negotiate • On the application blank • “open” “negotiable” “competitive” • During routine discussions of the job • “What is your salary history?” • “How much are you looking for?” • Do not negotiate without an offer • Rarely on first interview • “Sidestepping” • Is this an offer?

5. Salary range for level above and below you at the company BLS data State labor office Ask headhunters Salary surveys National Business Employment Weekly by Wall Street Journal every week. Prepare to Negotiate Salary • Know your minimums (BATNA) • Salary, benefits, other items, which? • Know what your skills are worthin the current market

6. 1998 Salary Offers to Bachelor’s Degree Candidates by Degree • Accounting 32,825 • Business Admin 31,454 • Construction Management 32,498 • Distribution Management 35,503 • Economics & Finance 33,691 • Hotel/Restaurant 25,534 • Human Resources (& LR) 27,151 • MIS 39,218 • Marketing 29,231 • Merchandising Management 26,584 Source: National Association of Colleges and Employers

7. 1996 Salary Offers to Masters’ Degree Candidates by Degree • MBA -Non-tech undergrad • < 1 yr exp 40,731 • 1-2 yrs exp 46,394 • 2-4 yrs exp 54,999 • > 4 yrs exp 67,209 • MBA -Tech undergrad • < 1 yr exp 39,146 • 1-2 yrs exp 43,000 • 2-4 yrs exp 51,600 • > 4 yrs exp 70,339 • Accounting 32,537 • Econ/Finance (Banking) 42,650 • HR (inc LR) 39,870 • MIS 38,400 • Marketing 41,547 • MS - Business 37,237 Source: National Association of Colleges and Employers

8. Recognize Buying Signals • Or, You say: • “How do you think I would fit in with the group?” • “I feel my background and experience would definitely complement the workgroup, don’t you?” • “I think I could make a real contribution here. What do you think?” • “I know I have what it takes to do this job. What questions are lingering in your mind?” • He/She says: • “How do you think you would like working here?” • “People with your background always fit in well with us.” • “You could make a real contribution here.” • “Well, you certainly seem to have what it takes.”

9. Build and Use Powerful Arguments • Know your worth to the employer • Know your fit with the job • What do you offer the organization, can you do for their benefit? • Use to determine your BATNA and as negotiation ammunition. • Skills: common, specialized skills, and organizational • Knowledge: common, specialized, and organizational • Experience: length of time, previous triumphs • Contacts: internal and external, long term and short term. • Replaceability: how are you more valuable than someone else?

10. Personal/Professional Drive, motivation Communication skills Problem solving skills Team player Confidence Energy, determination Reliability Honesty/integrity Pride, dedication Analytical skills Business Profile Profit Efficiency Effectiveness Money earned/saved Necessary skills for job What Do Employers Want?

11. Homework: Salary Negotiation Preparation • Identify a job you would be interested in having in an actual company. • E.g., www.monster.com • Find out the market rate for that job. • E.g., online.onetcenter.org/ • Write out at least five good arguments for why you would be worth a higher salary than they might offer.

12. Researching a Prospective Employer • Organization name, address, phone, contact • Main operations, main locations • 2-3 significant aspects of history, development • How it compares to others in same business • Policies re: training, salary, advancement • Future prospects of organization • Other info re: company or industry

13. Salary Negotiation Tactics Win-Win Win-Lose

14. Salary Negotiation Styles: More Effective • Active negotiation • Negotiate to get the highest salary possible • Ask for more than you expect employer to offer • Ask for more than the company offers • Preparation and self-promotion • Emphasize relevance of education • Stress motivation to work • Explain willingness to do different things

15. Sharing info Requests for info Build common ground Objective criteria I would rather have a higher salary than an increase in moving expenses Is salary negotiable? We both want to benefit the company. I’ve checked 3 moving companies, and moving expenses run about $3,000 Sharing Information

16. Request reactions to offers Focus on interests Separate people from problem Would that be all right with you? Why is that important to you? I am pleased with your cooperation, buy I am still concerned about salary. Problem-Solving

17. Alternatives Logrolling Expand the pie Suppose I started next week to meet your deadline, and then took off two weeks next month to arrange my move? Starting next week is important to you, salary to me. How about if I start next week for a $1000 bonus? If I work for part commission, we could both get more. Inventing Options for Mutual Gain

18. Salary Negotiation Styles:Less Effective • Aggressive • Say you have other job offers • Say you have another offer with higher salary • Acceptance • Ask for salary you hope to get • Accept any salary over minimum

19. Threat Positional Commitment Putdown Challenge Give me $50,000 salary or I will have to interview elsewhere. $50,000 is as low as I will go. That offer is like leaving a dime tip for your waiter, more insulting than anything else. What’s the problem with your company that you offer so little? Competitive Tactics

20. Yielding Acceptance Trade concession Split difference OK, I guess promotion-review is not that important I wanted $38,000 but I will accept $30,000 if I can start in 2 weeks instead of 1. $34,000 is fine. I would accept $3000 less salary if you will increase the moving expense by $3000. Your offer is $40,000, I want 50,000. Lets say $45,000. Accommodating, Compromising

21. High Initial Demands Delay Limited authority Good guy/bad guy Temper Tantrum I must have $70,000 I need to think about this overnight My spouse would have to approve I’d be happy to do that, buy my current boss won’t allow it. How dare you say that? Other Competitive Tactics

22. Evaluate the Offer • It sounds fair and equitable - You may still want to negotiate • ALWAYS say how excited you are about the opportunity and how much you want to work there. • If it meets your needs, your BATNA, your career interests, etc. money may not be so important. • Think it over, don’t decide on the spot. • Get a Written Offer/Contract. • KEEP LOOKING UNTIL YOU DO!

23. Evaluate the Job, Too • Weigh salary, future earnings and career prospects, benefits, commute lifestyle, stability of company, gut feelings. Answer: • Do you like the work? • Do you have a realistic chance of success on the job? • Do title and responsibilities provide challenge? • Is opportunity for growth compatible with your needs? • Are location, stability, reputation in line with your needs? • Is atmosphere/culture conducive to you enjoying it? • Will you get along with manager and workgroup? • Are money and total compensation the best you can get?

24. It Isn’t What You Expected • ALWAYS say how excited you are about the opportunity and how much you want to work there, with them. • Run money topic as far as you can in a calm and businesslike way. • Examine other potential benefits of the job • Future salary - Title & promotion after months • Signing bonus - Bonus, commission • Performance review - Car, gas, maintenance, parking • Try money again.

25. Multiple Offers • Generate as many interviews as possible in a 2- to 3-week period • “Mr. Johnson, I’m calling because while still under consideration with your company I have received a job offer from one of your competitors. I would hate to make a decision without the chance of speaking with you again. I was very impressed by my meeting with you. Can we get together in the next couple of days?”

26. Accepting New Job • Accept verbally, ask for a written offer, give notice. • “Mr. Smith, I’d like to accept the position of general manager at a starting salary of $42,000. I will be able to start work on January 7. And I understand my package will include life, health, dental, a 401K plan and a company car. I will be glad to start on the above date pending a written offer received in time to give my present employer adequate notice of my departure. I’m sure that’s acceptable to you.”