Salary Negotiations: Distributive Bargaining

Salary negotiation is more of an art than a science. It usually is one of the most neglected and under-rated aspects of a Job search. Salary negotiation is an important aspect of any job situation, and is often perceived as the trickiest part. Most common doubts raised are " Is it safe for me to negotiate a salary without jeopardising my chances of getting a job?", as well as "When and how do I negotiate my salary?".

The situation in which a salary is negotiated could vary depending on whether the individual is a candidate with a certain degree of work experience, applying for a position in a company, or is a candidate with no prior work experience, applying for an entry level position in an organisation. Another situation could be an employee looking for career advancement in his current organisation. The details of each of these situations might be different, however certain basic principles and rules regarding salary negotiation remain the same.

Principles for Negotiating: Points to consider

1: Be Prepared
Preparation is critical when negotiating the terms of your employment. The more information you have, the more successful you will be.

2: Recognize That Employment Negotiations Are Unique
Employment negotiations are different from other types of negotiations. They are not a one-shot deal like buying a house or a car. When the employment negotiations are over, you will have to work with your former "adversary" on a daily basis; more important, your career success may depend on the person with whom you have just finished negotiating. Therefore, even though you want to negotiate the best possible deal, you need to proceed in a way that doesn't tarnish your image.

3: Understand Your Needs and Those of Your Prospective Employer
Any employment negotiation is going to involve trade-offs. To be successful in this type of negotiation, you need to examine your own priorities. What is it that you want? Are comfortable with a low salary and a large equity stake? Do you feel confident that you can meet the requisite criteria to earn a bonus? Are you able to handle dramatic swings in income from year to year? How important is job security to you?

4: Understand the Dynamics of the Particular Negotiations
Sometimes you will have skills or experience for which there is a great demand. You may be the only qualified candidate to have made it through the interview process, and the company would like to hire someone quickly. Similarly, if you have been able to defer discussing compensation until the company has determined you are the best candidate for the job, your bargaining position will be greatly strengthened. These are enviable positions to be in.

5: Never Lie, but Use the Truth to Your Advantage
Honesty is important. If you lie during the negotiations, sooner or later you are likely to be caught. Once you are caught lying, you lose all credibility. Even if you don't lose the job, you will be placed at a tremendous disadvantage, and your future credibility on the job will be undermined.

6: Understand the Role That Fairness Plays in the Process
The guiding principle for most employers in determining what they will agree to is fairness. Within the constraints of their budget and organization structure, employers will usually agree to anything that is fair and reasonable in order to hire someone they want. Appeals to fairness are the most powerful weapon available in employment negotiations. Sometimes such an appeal may even convince an employer of the need to adjust its salary structure or increase the amount of money budgeted for a position.

7: Use Uncertainty to Your Advantage
If an employer is not certain what it will take to recruit you , its initial offer is likely to be close to its best offer. If you have divulged too much information, it will likely not offer you as much as it might have otherwise. By not disclosing exactly what your compensation package is or exactly what it would take to get you to leave your current job, you will force a potential employer to give you its best offer.

8: Be Creative
You may not be able to get everything you want, but you want to be sure to get everything you can. Focus on the value of the total package. Look for different ways to achieve your objectives. Be willing to make trade-offs to increase the total value of the deal. Limit your "requirements." When you lock yourself into a position, you limit your ability to be creative.

9: Focus on Your Goals, Not on Winning
Too often in negotiations winning becomes more important than the actual goals that are achieved. This tendency is particularly problematic in employment negotiations. Not only is it important to focus on achieving your goals; it is also important not to make your future boss feel like a loser in the negotiations. Remember, that this person will control you future career. You will have gained little by negotiating a good deal if you alienate your future boss in the process.

10: Know When to Quit Bargaining
There comes a point in every negotiation when you have achieved everything that you could gave reasonably expected to achieve. At that point you should thank the person you are dealing with and accept the offer. If you don't recognize when to stop negotiating, you run the risk of having the company decide that it made a mistake by offering you the job in the first place. Most companies will want to treat you fairly and make you happy, but few companies want to hire a prima donna. Being perceived as greedy or unreasonable may cause the deal to fall apart. Even if it does not, you will have done immeasurable harm to your career with your new employer.



Employment negotiations are the starting point for your career with the company. They set the tone for your employment relationship. Get too little and you are disadvantaged throughout your career; push too hard and you can sour the relationship before it even begins. How you handle the initial negotiations can have an impact, for better or worse, on how successful your tenure with a company will be.

The above points were taken from a book titled 'Get More Money on Your Next Job... in Any Economy'.

Get More Money on Your Next Job... in Any Economy

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