- your worth, as a middle manager, to the company- specifically, why you deserve a bigger paycheck;
- the salary/fringe benefits limits you are willing to accept;
- the salary levels and policies prevailing in your company;
- your supervisor's probable reaction to your request;
- the strategies and tactics you will need to negotiate the raise you want.
However, you must tread lightly and be extremely diplomatic, cooperative, and confident that you are a valuable asset to your company. Avoid going off half-cocked with the notion that you're a hotshot when your performance is only mediocre. Do nothing to jeopardize your job, unless you have a replacement position waiting for you.
If a CEO's value is worth millions, certainly a company can well afford to reward a hard-working middle manager with an adequate raise.
1. Measuring Your Worth
A recent report by President Clinton's Council of Economic Advisors indicated that this country's economy has produced 8.5 million more nonfarm jobs than it lost since January 1993. Furthermore, roughly 60 percent of the net job growth over the past three years has been in managerial and professional positions. These additional jobs have helped neutralize somewhat the effects of corporate downsizing. Nevertheless, the report continues, those that fit in the category of higher educated middle-age managers no longer feel secure in the positions they hold.
Ask managers to describe why they feel depressed despite learning about the President's encouraging report and, without hesitation, they will usually point to the inequities of corporate salary structures-specifically, the differences between their salaries and those of their bosses. They will gripe about not getting recognition for job performance where it counts-in their wallets. In the 1980s, the CEO's average compensation increased approximately 300 percent over a ten-year period, whereas the production worker gained an average of only 50 percent.
The frustrating news these days is that managers are apt to have their salaries suppressed, whereas CEOs and top executives continue to receive enormous salaries, bonuses, and stock options. But we cannot give up the goal of earning the wages we believe we deserve. We should concentrate on getting more than adequate compensation for our performance-the more outstanding, the higher the rewards. If you fall into a certain labor category, you usually have a general idea of your salary span. However, you must do your homework to find out if there will be increases in the salary structure in the near future and also what it takes for pro-motional opportunity. Do not pressure your supervisor by citing executive salaries unless it's germane to your salary review.
For example, point out how more high-paying jobs are being created despite corporate downsizing, in particular in managerial and professional positions. As indicated previously, attitudes have changed; people who felt secure about their jobs, especially those who are middle-aged and well-educated, are finding themselves unemployed. Consequently, in today's environment, you have to work harder to prove yourself, demonstrating your full qualifications and worth to the company.
There are many mixed signals in industries that have downsized at the same time as they have awarded top executives-in some instances for less tangible achievements. This is quite frustrating to middle management.
Downsizing may help a company improve its profits, but it may foster a "damned if you do and damned if you don't" attitude in middle managers. For example, if a middle man-ager does a masterful job of cost savings, he may kick himself right out of his job instead of being rewarded with more compensation, like an increase in salary or a bonus. It's possible that cost-saving techniques will result in having lower salaried personnel complete the work that needs to be done. But if this is the way a corporation rewards its skilled workers, it's time for the middle manager to find the right place for himself or herself. Fortunately, most firms recognize excellent performance as a way to measure one's worth, and, for the cited case, the manager most likely would receive a promotion or a lateral transfer to another department. Thus, we still believe that a company that is considered top-notch will award its diligent managers, especially those who prove themselves as assets to the firm. Furthermore, within limits, negotiating a decent raise is still apropos! The problem in getting this raise is that most people do not know how to do it. They are afraid of rejection and may not even try.
Generally, the smaller the firm you work for, the more flexibility you have in negotiating a raise. For example, a computer programmer employed by a small company has a better chance to negotiate a decent raise than a contract manager working for a giant organization. The smaller company can be harmed by key personnel leaving for greener pastures whereas the larger firm finds little difficulty in employing replacements. Again, the more one proves his or her net worth, the better chance of getting either a raise or promotion or both.
So where does the manager fit in? How does a company determine what a manager is worth? Who establishes what is the right salary for a particular quality of service? These techniques help in grading jobs and in evaluating performance and other relevant factors to establish salaries and salary-level ranges.
Unlike managers, CEOs and production workers can at least cope with inflation; their salaries and wages tend to keep pace with cost-of-living increases. However, when it's their turn for raises, many managers find themselves at the mercy of their bosses. When a company is doing well, its managers may receive salary increases that are reasonably comparable, in terms of percentages, to those of production workers. But when times are bad, many companies limit raises, and the managers are frequently the last to be considered. CEOs will still get their base salaries; or, if asked to resign, they may float away beneath "golden parachutes." And production workers will probably get their raises right on schedule, especially if they are unionized.
So sharpen your wits-and, of course, your negotiating skills-and get ready to do battle by showing not only what you are worth today but also what a valuable asset you have been and will be to your company and, especially, to your supervisor.
2. An Overview of Negotiation Techniques
In Jack Chapman's book, How to Make $1,000 a Minute: Negotiating Salaries and Raises, Richard Germann asks, "Is it true that you can negotiate anything? The answer is, 'Of course you can!' But will it do you any good? This requires a longer answer." People who are facing negotiations can be divided into three categories: those who don't try negotiating because they feel uncomfortable, don't know how, or have made up their minds it won't work; those who negotiate without plan or purpose and therefore to no effect; and those who see negotiating as a valuable skill to develop and practice conscientiously.
The art of negotiation requires skills and knowledge that come from experience, not from formal education.
Preparation for negotiation is necessary to reach a successful conclusion. Invest in your own time, away from the office, to establish what you expect to accomplish in a salary review session. Consider what you expect to achieve, while recognizing your minimum requirements. With adequate preparation, you should be able to evaluate whether a good deal was struck.
Regardless of your experience or lack of it, when applying negotiation techniques you should know when to use strategies and tactics-and how to tell them apart:
- strategy consists of the plans developed in preparation for a negotiation session;
- tactics are extemporaneous methods of reaching agreements.
The goal of the negotiation process is winning. Therefore, your strategy must include gaining insight into these factors: your performance and profit motivation, company needs, salary versus position, available options, and the company's financial condition. You should also consider ways to control the tempo of the negotiation without appearing to be in command.
Your negotiation skills should include the ability to communicate effectively, to observe and read people, and most important, to think on your feet. The quality of your communication is demonstrated by how well you present your case and how readily it is comprehended and accepted. You must also listen carefully to what is being said. Prior knowledge of your supervisor's personality, needs, and goals can help you to negotiate more effectively.
3. Yes, You Can Be an Effective Negotiator
What makes a negotiator effective? Whether you are negotiating for a salary increase or a contract, you should consider this question carefully. For a negotiator, the three most desirable qualities are aspiration, skill, and self-confidence. With these three (plus a dash of power, which will be discussed last), a negotiator should get the desired results.
Let's consider each of the three qualities separately.
Aspiration has a big influence on the outcome of a negotiation. The negotiator with a high level of aspiration has a strong desire to win. Conversely, fear of failure is characteristic of a low aspiration level.
Skill includes knowledge of negotiation techniques- strategies and tactics-and good communication.
Self-confidence is usually acquired through maturation and experience. A negotiator must think well of him- or herself in order to project a favorable impression.
A moment's reflection reveals that these three important qualities are closely interrelated. If you have high aspiration to succeed, you will recognize the need for the negotiating skills that will enable you to prevail. In turn, by acquiring these techniques, you will greatly increase your level of self-confidence. And from all three will come a heady sense of power-a conviction that you can control events and people to achieve your purpose.
As an effective negotiator, you will also need other skills and qualities:
- Ability to plan: Perhaps the most productive time in the negotiation process is spent in planning, including the capability of showing your worth and being prepared with an activity log.
- Ability to think clearly under stress: During the salary-review session, you will no doubt experience stress, so you must be able to think under pressure.
- Good listening habits: You should be capable of responding to questions with logical replies. This requires an ability to listen carefully and attentively.
- Good verbal skills: You must be able to express your requirements clearly and effectively in speech and in writing.
- Ability to gain respect from your supervisor and anyone else in the organization This is an essential quality for a manager and should be reflected in your role as a negotiator.
- Empathy: Sensitivity to the feelings of others will help you to establish and maintain good rapport with your supervisor.
- Personal integrity: You should represent yourself without exaggeration and without distortion of facts.
