Understanding the Negotiation Process
The first step in negotiating a raise is to understand that the employer has an ego and that he will react very negatively if he feels he is being threatened or blackmailed. Your intention may be innocent enough, but if he thinks that you are trying to push him around he may go so far as to withdraw any previous offer he has made, and send you packing.
I watched this exact thing happen some time ago. I had interviewed a man for an executive position with a medical supply company. Although he was very qualified, he was very arrogant with me so I told my superior that I did not want to hire him. My boss, however, overruled my objection and personally entered into direct negotiations with him. Apparently the man could have had the job at the salary he wanted (much higher than normal for that position) because my boss was so impressed with his credentials. But the man was so arrogant and demanding during the negotiations that my boss threw him out of his office!
The point is that everyone has an ego abuse threshold, and there is no real standard other than common sense to determine what that is for the person that you are talking to. However, a basic rule of thumb is to ask yourself how much you yourself would take before you would reject the candidate and withdraw your offer.
The second step is recognizing that you must focus on what the person really wants rather than what he says he wants. You may be surprised to learn that these two things are usually not the same. Perhaps a simple example would prove useful.
Now, each party has stated his position and as a consequence each is at a significant stalemate. Neither side is likely to be willing to change his mind because he does not want to appear to be weak, or to be giving in. And as long as each insists on his respective positions, there can be no progress.
If Jack is smart, he will analyze the situation and try to figure out what the employer really wants. Is he trying to save money for his company or is he sticking to policy? Maybe it is something else entirely different such as his ego? By asking himself these questions he begins to deal with the real issue behind the stated intent - which the employer does not want to feel that he is being pushed around. By focusing on the man's ego-threat he could then begin to negotiate more effectively.
Here Jack has done two important things. To begin with, he has complimented the employer which addresses the real issue of the man's ego. Also, he has opened the negotiation to possible compromise thereby eliminating the stalemate. Jack’s the employer responds that he still is not willing to pay more than $40,000 Jack should try to establish some objective way to determine what his salary should be. And that is the next step in effective salary negotiation.
For instance, Jack could suggest that they scan the local newspaper together to see what the average salary is for a person of his experience and success. Or he might propose that they contact an executive recruiter to establish an objective standard for a salary base. Finally, Jack could suggest that they examine each aspect of the job to establish its real value to the company. Once the objective standard is set, negotiations become easier because the employer's ego is safe-he no longer feels the threat of being pushed-and Jack's sense of his own worth is protected-the fair standard will determine his value once and for all.
Presuming that they agree on the standard, Jack should now try to work out as many options as possible to speed the process along. For example, if $50,000 seems to be the fair salary for the position, how should it be paid out? Is he willing to take $45,000 plus a company car and a stock option plan? Would he accept $40,000 plus a substantial semiannual bonus? The point is, the more options he has, the more successful he will be because: 1) he seems flexible and willing to compromise; 2) he can move around the employer's objections more easily; and 3) he can respond to the employer's suggestions more effectively. Without these options, Jack and the employer are likely to wind up in a stalemate again.
One other aspect of the option package that Jack should bring to the negotiation is to try to have other offers when he negotiates with the employer. While this is not always possible, if he can arrange it, he is in a much stronger position to bargain. First, the other offers will keep him from panicking and accepting the initial $40,000 offer out of desperation. Second, he can explain to the employer that he has another offer and that he must weigh both of them before making his final decision. This last point, of course, puts pressure on the employer to meet Jack's terms.
