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Let's face it. One of the reasons why many of us dislike salary
negotiations is the feeling that we are rarely in a powerful position.
It often seems as if we have little leverage as we deal with our
employers who have more information and the final say in whether we get
what we want.
However, one of the benefits of advancing in a career is that the
balance of power can change. Your leverage in salary negotiations can
increase as you gain knowledge, expertise and experience. All of a
sudden, you realize that you are now quite valuable to the company, and
irreplaceable should you decide to leave for one of those great offers
you keep receiving.
When you are sitting in that position, your negotiation will likely
feel much different than it has before. You may feel great temptation to
use your leverage to exact revenge for the numerous slights (real or
imagined) that were inflicted upon you in the past. Still, most people
do not want to gain a reputation for being greedy, tyrannical or
exploitative. Therefore, instead of flaunting your power and doing unto
them as they have done unto you, why not focus on your long-term goals
and negotiate in a way that enables you to get what you deserve and
enhance your status as a leader and loyal team player. Consider the
Focus on getting the best deal for yourself that is still good for
Begin with the realization that this is your opportunity to maximise
your compensation. Now is not the time to sell yourself short or leave
items on the table. Instead, focus on what you feel you need and ought
to have, and then negotiate for it. Many employers will provide their
most valuable executives generous packages of stock options,
profit-sharing bonuses, generous severance packages, along with
non-financial compensation like paid sabbaticals.
At the same time, unless your proposal helps the company satisfy its
interests (e.g. retaining your services, maintaining internal equity
among executives and establishing good precedents for the future) your
negotiations will go nowhere. For that reason, you must make sure that
your agreement benefits the company and helps it achieve its objectives.
Try connecting some of your compensation to the achievement of key
strategic objectives. Or, make part of your bonus contingent on
receiving good feedback on your ability to personally lead your team. If
your compensation richly rewards you for acting in the company's best
interest, you have struck a good deal for them and for you.
Make sure you have a fair deal.
Just because you have more leverage does not mean you have to be
greedy. Asking for an unreasonable package or item may jeopardise the
process and will likely upset the other negotiator, causing her or him
to fight much harder on other issues. It will also cause resentment
among your co-workers and staff (remember them - they help you look
good). If you do your research on what other star performers receive
(both in your company and at its competitors) you will be able to stake
out terms that are quite beneficial to you and justifiable as
appropriate given the value you provide.
Refer to your 'BATNA' - Your Best Alternative to a Negotiated
Agreement when you have to, but use it as a warning, not as a threat.
There may come a time in your negotiation when you have to consider
walking away. Perhaps the company is not appreciating the value you
bring or does not realize that you have a great offer somewhere else. If
you want to continue the negotiations, you may find it advantageous to
let the company know that you have other opportunities and that they
will suffer negative consequences if you leave. That dose of reality may
bring them to their senses, and alert them to the fact that you do have
leverage here. However, how you raise these opportunities is critical.
Use it as a warning, for example, saying "I would prefer to work
something out, but I just want to be clear about what I think will
happen if I leave ..." or "As you may know, I have an outstanding offer
from another leading firm ...". Making threats like "If you do not give
me this point, I will work for ..." only tends to inflame the situation.
In many ways, negotiating your compensation package is a form of
leadership. When you have the power to lead, you will want to act
honourably and effectively. You should not act differently when you
negotiate and you hold most of the cards.
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