Stage 1:  Preparation
  1.  Accredit your job worth
  2.  Conduct a job worth bench marketing study
  3.  Know what you want and go get it
  4.  Understand pay policy and structutre

Stage 2:  The Negotiation Proper
  5.  Delay salary talk
  6.  What you don't ask for you don't get
  7.  Set your aspirations high
  8.  Focus on the future
  9.  Get the base salary high
10.  Silence is golden
11.  Negotiate in stages
12.  Ask the $2,000 - $5,000 question!
13.  Create added value

Stage 3:  Closing the deal
14.  Delay a final decision
 

Reproduction and Fair Use. This article may be reproduced for one time personal use and in unlimited quantities for higher  educational purposes provided credit is given to Dr Huber and the University of Washington. As I like to track the diffusion of information via the internet, an email regarding how it was used and its utility is appreciated.  Send comments to vandra@u.washington.edu

Stage 1:  Preparation

1.  Accredit Your Job Worth

It's up to you to teach the employer why you are worth a high salary. To reach your objective, your skills and accomplishments must be presented in a clear and organized way.  It's best to start the process as soon as possible, namely on your job resume and in your cover letter.  In subsequent interviews, during site visits and during job acceptance negotiations, reiterate your value added skills.

• A resume which chronicles your job history as well as makes salient your key competencies(See Sample for MitziSmarts. A chronological resume delineates your  work history but makes it inherent upon the  recruiter to extract pivotal information.  Rather than leave this to chance or oversight, make the job easy for the employer and summarize YOUR value added attributes in your resume.  
• Concrete, specific  examples   are retained in memory better than sweeping generalities. Rather than vague adjective descriptors (e.g.,  "I'm highly motivated, creative and meet deadlines) include specific numerical (if possible) descriptors of the work you performed (e.g., Supervised a staff of 10; Generated monthly sales of $125,000; Handled 100  accounts valued at $3.25 million)
• In your cover letter include at least one specific example of a job accomplishment. Rather than saying "Served as a call center operator" say  "I got 30% of all callers to purchase the weekly special. Annualized, this generated approximately $250,000 in increased revenue).
• Pepper your resume and cover letter with the  firm's terminology (e.g. value added, core competencies, continuous improvement). This signals that  you can help the organization achieve its objectives. It also cues the prospective employer that you know something about the organization's values and expectations.
• Rather than describing you by a string of vague adjectives descriptors, ask your references to describe one project that you did extremely well in their letter. Have them focus on the behaviors that they observed that lead to success. 
• Take to the job interview a portfolio of your accomplishments (e.g. samples of executive briefings, elegant computer code, a significant memorandum, a report prepared for a class, an advertising campaign you developed for your local church group, a financial analysis prepared for a consulting class).

2.  Conduct a Job Worth Bench Marketing Study

Most organizations  contend that they "pay a competitive wage."  A few others contend that they lead the market (e.g., we pay at the 80th percentage for our industry). The challenge for  the job seeker is to ascertain the veracity of such statements.   This is best accomplished by  comparing what the organization says it pays  to what similar firms do pay. Wage and salary surveys help you do this.   There are, however,  several concerns with salary surveys:

Specificity of job information. Salary surveys can be national, geographic, or industry specific. They vary in their specificity and depth. Salary surveys  include a cross section -- but not all --  organizational jobs. If the job you are interested is included in a survey, you are in luck.  If not, you will have to extrapolate, that is compare the content of  survey jobs to the content of the job of interest and determine the degree of match.  Regarding a specific job, some surveys merely list job titles. This is problematic because jobs may have the same title (e.g.., secretary)  but differ significantly in content. more comprehensive surveys include brief job descriptions.  This increases the likelihood that  you are comparing apples to apples.

Timelines of Salary Data.  The usefulness of survey data depends to some degree on its recency. If the data in the survey is more than a few months old, it should be "aged", that is, updated into current or future dollars.  For example, if the survey data was collected in 1997 but you will not be joining the firm until the summer of 1998, then the data would a year and half old. With the exception of high demand jobs (e.g. software engineers), salaries typically go up about 3-5% annually. So to make the data current  you must adjust it upwards. For the previous example, the data would be 1.5 years old. Assuming salary went up 5% annually, then future value of pay would be (current salary X 1.075). Remember also that annual increases in wages  do not always parallel increases in the consumer price index or inflation.

3.  Know What You Want and Go Get It

Thorough preparation (refer to Negotiation Preparation Questionnaire) breeds confidence and reduces the chance of losing control in a negotiation.   Some useful questions to explore in advance of the salary negotiation include:

• What is your reservation wage (i.e. the lowest salary you would consider)
• What would you take in lieu of salary (Important for start up firms, public sector positions)
• What accomplishments in past jobs or educational achievement make you worth a higher salary?
• What is the market rate of pay for  individuals (e.g. University of Washington MBAs) with similar background. How can you justify these numbers?
• If your last salary was lower than you demand now, how can you justify a higher salary.
• What objections might the employer have to your offer? How can you overcome these objections?
• What will be your opening position?. Remember, this is the upper limit on what you will get. Set it high. Better still let the employer make an offer first.

4.  Understand Pay Policies and Structure

When you negotiate an initial salary or a pay raise, you are playing ball in the company's home park.  Before you go up to bat, it is important for you to  learn as much as possible about the compensation policies of the organization   If the recruiter is reluctant to provide such information (she may not know the details!), a call to the human resources department generally and the compensation specialist specifically will usually  provide the answers. Some useful questions include:

• What is your company's pay policy (e.g. lead, match, lag)?
• What firms do you compare yourself to? (e.g. Mayflower group, all software companies in the Northwest, regional accounting firms)
• Could I get a copy of the pay structure. Obviously, I am not seeking names of individuals just the minimum, midpoint, maximum and if possible, the compa-ratio (average pay of employees in a pay grade to the paygrade midpoint).
• Do you classify jobs into pay grades or bands? If so, how many and what are the salary ranges for those grades?
• Alternatively, what pay grade does job X fall into? What is the pay range for that pay grade
• When was the last time your pay structure was updated
• What is the maximum raise given?
• How is  performance evaluated?
• What are the opportunities for advancement? What do you have to do to qualify for those opportunities?
• When and how frequently is an employee's worth re-assessed?
• What salary have you offered other new recruits in the same position? ( a useful question for women who tend to undervalue their worth relative to males)

Stage 2:  The Negotiation Proper

5.  Delay Salary Talk

Whenever possible, do not talk salary until you have a firm job offer.  By delaying the subject of salary until later in the process, you can likely raise your worth in the employer's eyes and escalate their commitment to you.  Loaded with information about your strengths, the employer will see you as a more valuable asset than you were in the beginning. When asked in an initial interview what salary you expect, use stalling tactics or turn the question back to them. For example:

• "I'm more interested right now in the job and whether we have a good match than I am interested in salary."
• "I'll consider any reasonable offer."
• You've indicated that it's your company 's policy to pay at the 80th percentile. Given that, I'm sure we can work something out."
• Ask them what the salary range for the position is.  When they respond say, "I'm sure we can agree to something within that range."
   

6.  What you don't ask for you don't get

Once a job offer has been made, the company is  likely to "escalate its commitment" to you.  That is, they are more likely to add to the package than withdraw the offer. Thus, you are likely to get more than they originally offered you -- particularly if you provide them the ammunition to offer more!  Think about it from the company's perspective. If you take the first offer, they may suffer from winner's curse and wonder if they should have offered even less.  Asking for more generally increases the perception of your value to the perspective employer.
 

7.  Set Your Aspirations High

Always open with a figure higher than you expect to get.  Some say it should be 5-20 percent higher than the top of their range.  It's likely to get an emotional reaction but not necessarily a productive one.  Instead, establish a fair value for your services. Then establish a range (optimistic to pessimistic). Any agreement within this range should be acceptable to you. And remember:

• Asking  the potential employer for a range protects you from the biggest mistake possible -- naming too low  a figure.  This is particularly important for women who typically have lower. reservation wages and will settle for less than their male counterparts.
   
• If you get the higher salary, you won't be welcome with open arms by other employees unless you convince them you've raised the negotiating floor for them!
   
• Hold your opening position as long as possible.
   

8.  Focus on the future

Negotiations are future directed.  You bargain for compensation in exchange for services yet to be performed.  Emphasize your accomplishments, not your personal needs. The employer doesn't care what you need.
 

9.  Get the base salary high

Your base salary anchors your future raises. Percentage increases are tied to it.  Rather than taking a one time moving allowance, try to negotiate for that money to be placed in your base salary. Develop answers to why you deserve more money than you earned previously (See Skillful Answers to Hard Questions).

If your starting salary is just $5,000 lower, you will lose more than $1,000 -- even if you perform the same and receive the same evaluations! Over a 30 to 40 year career, you've lost enough to buy a second home (okay, not a really nice one but still...).
 

10.  Silence is golden

You never loose a negotiation when the other person is talking.  Let them talk.  The language of motion and the language of emotion in addition to the language of words are equally important avenues of communication

• The average person only retains half of what is heard.
• You must listen to employer's concerns so you can demonstrate how you can meet them.
• Use reflective listening skills.
• The more the other party talks in the negotiation, the more they will like you and be willing to work with you to get an offer that is satisfactory.
• Pause and look dismayed after they make an initial salary offer.  Give them time to think it over.

11.  Negotiate in stages

It's useful to negotiate in stages. Getting a commitment in one area (starting salary) escalates the employer's commitment and makes the other items seem smaller than if it is negotiated in lump sums.  If you find yourself getting tense,  go to balcony and continue the negotiation at another time.  Going to your balcony involves taking time out away from the negotiations to rethink issues, calm down and regroup, and perhaps rephrase questions or information.
 

12.  Ask the $2,000 - $5,000 question!!!!

One question that has proven to be invaluable is the  question" "Is that the Best you Can Do?" followed by  one to two minutes  or several days of silence.  Silence allows the individual to consider what you've ask. Silence may be two minutes  (no less on your part) or several days.  You may need to give the spokesperson for the company the ammunition to justify your higher salary so they can "save face."  Typically, the company representative will come back with an offer  which is higher (usually $2,000 to $5,000). I did have one MBA student who asked the question and this salary jumped $14,000!
 

13.  $$$ Create Added Value $$$

Even if a company appears hesitant to move on salary,  they may have some latitude in other  areas.  Negotiate for these items after you've got your base salary as high as possible. While some fringe benefits are not negotiable (e.g. social security contributes, some retirement funds), other are. Some perks you might want to negotiate for include:

• Signing bonus --a one time fixed cost to the employer
• A salary review in six months rather than the traditional year. It gives you time to demonstrate your competence.
• Stock options -- that's how the Microsoft founders got rich!
• Extra  equipment (fax, car phone, computers, home office).
• Cost of internet connection for home.
• Flexible work site (home versus office)
• Cost of accreditation examinations (e.g. CPA, BAR, SHRM examination), preparation
• Payoff of your student loans
• Child or elder care.
• Airfare and time off to see children living in a different city (divorced parent who took a job away from his children)
• Larger office with better furniture
• Starting date
• Extra insurance coverage
• Credit cards
• Low interest loans
• Flexible hours
• Company cars
• Extra vacation time
• Tuition reimbursement
• Continuing Education  trips

National Average 1995 Fringe Benefits For Salaried Employees
Expressed as Percentage of Payroll
Published by U.S. Chamber of Commerce

Stage 3:  Closing the Deal

Agreeing on a salary, does not commit you take a job. You've only agreed on what your salary should be. Asking for a day or two to think about the offer allows you:

• To make sure you've thought about everything. Consider asking some of your peers if you have considered ever facet of the problem.
• To get a more appealing fringe benefits package or perks (e.g. child care allowance,  bonus, raise in six months).
• To check out your other job offers to see if counter offers are forthcoming.
• To use the offer to get a higher offer from your employer -- if you really want to stay.

Reproduction and Fair Use. This article may be reproduced for one time personal use and in unlimited quantities for higher  educational purposes provided credit is given to Dr Huber and the University of Washington. As I like to track the diffusion of information via the internet, an email regarding how it was used and its utility is appreciated.  Send comments to vandra@u.washington.edu