You've decided to ask for a raise, and you've gained some idea of negotiation techniques and the personal qualities needed to negotiate effectively. Now, since this isn't a case of the sky's the limit, you should consider the practical limitations on what you can reasonably expect to achieve. This article covers some topics associated with these limitations: identifying factors that determine compensation, examining your needs and wants, establishing an acceptable salary range, and analyzing your supervisor's position and personality.
Know your adversary.
- Analyzing Salaries
If you answer yes to most of these questions, you probably deserve that substantial raise. Go for it-don't settle for an average amount or for an "automatic" increase that reflects just time on the job rather than outstanding performance as a manager.
What is your Worth as a Manager?
- Do you schedule meetings only when necessary?
- Do you plan an agenda in advance of a meeting?
- Do you create business or technical plans to guide yourself and your staff?
- Are you flexible enough to accept changes for meeting the needs of the company?
- Do you sufficiently analyze the impact of changes?
- Do you organize your records for easy location?
- Does your staff receive information on time?
- Do you put information in writing to your staff or to your supervisors instead of relying on verbal communication?
- Do you make use of meetings most effectively?
- Are you responsive to requested information?
- Are you calm in meeting any crisis?
- Do you address more than one problem at a time?
- Do you use time-saving computer techniques?
- Do you address imperative problems on a timely basis?
- Do you meet schedules or advise where schedule changes must be made to meet action items?
- Do you keep morale on the high side?
- Do you understand your responsibilities?
- Do you know how to delegate responsibility?
- Do you show genuine interest in people?
- Do you remain calm and rational when things don't go your way?
- Performance: A 10 percent improvement in performance can result in a raise of 25 to 30 percent.
- Location: Working in New York City, where the cost of living is high, may mean 10 to 35 percent more in pay.
- Business risk: A rise in business risk of 10 percent may result in a 5 percent increase in pay.
- Size: The size of a company includes a combination of sales volume, assets, and shareholders' equity. A 10 percent increase in size may raise a CEO's salary by 2 percent.
- Industry: CEOs of power utilities are paid the least, followed by CEOs of transportation and retailing concerns.
- Tenure: As a rule, a CEO of long standing earns less than a newly hired one. A CEO's salary may decrease by 6 percent for every 5 additional years with the same company.
2. Examining Your Needs and Wants before a Salary Review
When you request a raise, your supervisor's initial response may be, "Why do you think you deserve an increase?" For this reason, prime prerequisites of a salary review meeting include adequate preparation and job performance above expected levels. When challenged, be specific in stating how you've exceeded expectations. Be ready to list your accomplishments, to explain their benefit to the company, and to describe what you see as your role in the firm, both for the present and in the future.
To start, perform a self-appraisal by answering the following questions:
- Are you doing just your job, or more than is expected of you?
- Do you fit into the company's long-range plans, and are you promotable?
- What are your salary goals-now, a year from now, and in the next decade?
- Are you keeping up with your professional education?
- What are your performance goals and objectives-now and for the future?
- What are your strengths and weaknesses? (Do your strengths outweigh your weaknesses?)
- Will you seek employment elsewhere if you are denied a raise that is satisfactory to you?
- What can you do to improve your value to your firm?
Having gained a rough idea of the raise you want, give yourself latitude to negotiate the exact amount. Be prepared with a salary range that you consider acceptable. Your top figure may be higher than the one that has been established by the company for your position. Even so, your salary requirements should be based on how important your work is to both your supervisor and the company, and the company's apparent willingness to pay for it.
If you are aware of the company's range, you may want to take the initiative and present your salary requirement first. However, if you are uncertain of the range, let your supervisor, not you, make the initial offer. But before making a counteroffer, question the range: When was it last increased, and when will it be updated? Don't be surprised if your supervisor is reluctant to give you answers. Expect to hear some objections, such as "Company budgets are limited," "Other employees in your category are not making as much as you are now," and "This offer is a lot more than you are currently earning." If this happens, try using closing techniques, but first determine the reason(s) that your request is meeting resistance.
4. Understanding Your Supervisor's Viewpoint
When negotiating raises, you and your supervisor are, frankly speaking, adversaries. You want the highest raise you can get. Your supervisor wants to retain a productive and loyal worker at the lowest cost. His or her overall goal is to increase the workload while minimizing the number of employees, and to have these employees follow orders with a minimum number of questions and little need for direction and training. In addition, your supervisor wants to make an impression on his or her own superiors-to demonstrate outstanding performance as a leader, while reducing the number of problems being brought to the attention of upper management. How much your supervisor may be willing to give in return for your assistance in achieving company goals may depend on how well you've "sold" your worth, what you are willing to accept, and what compromises you both are willing to make. How easily you reach an agreement may depend on your replies to questions and how well you keep the salary discussion open until your objective is met.
An important factor with a direct impact on the negotiations is personalities-yours and your supervisor's. You should know how to recognize a person's social style and be aware of the different ways people interact. This knowledge can be useful in winning the other party's respect and acquiring the capability to anticipate his or her remarks and actions. The following are four common personality types:
- Ambitious types are oriented more toward achieving results than toward dealing with people. They appear uncommunicative and stable, and act independently and competitively in relationships with others. Most people who fall within this category have pleasant, even charming, personalities. However, they tend to slight other people, mainly through failure to recognize good work.
- Extroverts appear to be communicative, warm, and approachable, but they are also competitive. They may seem to seek your friendship but actually may only want you to follow and support their ambitions. Your relationship with an extrovert may continue only until he or she reaches a self-serving goal.
- Friendly types are the most people oriented of the personality styles. They treat people as individuals rather than as a means of achieving results or influence. They look for-and usually get- supportive opinions. They are friendly and warm, but they avoid taking risks.
- Introverts are uncommunicative, levelheaded, and independent. They may show cooperativeness, but are cautious in displaying friendliness and are mainly concerned with getting things done without any personal involvement.
When meeting with your supervisor to review salary, it's vital that you have a positive attitude. The following list of negative personality types describes behavior and attitudes you should avoid:
- Silent is unresponsive and withdrawn, and neglects to ask questions to get facts in a meeting with others.
- Concurrent agrees with everything because he or she has a dire need to be liked and hates to pursue a difference in opinion. Also, he or she is overly concerned with the personal feelings of others.
- Mr. or Ms. Negative believes that nothing ever works out and usually never takes the advice of others.
- The Bitcher may complain about the workload and working conditions. He or she may uncover real problems but may present them negatively, which turns people off.
- The Wise Guy can be the most difficult to get along with. Wise Guys think they know more than any other person. Usually, they are superior in knowledge and performance, but their attitudes rub people the wrong way.
- Low Tolerance Level types lose their cool very quickly and are most irritating. They are looked upon as losers.
