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8 key steps to negotiating your salary
8 key steps to negotiating your salary in the year ahead without losing the respect of your manager...
1. Be prepared
The more information you have about your market value the greater your likelihood of achieving a satisfactory increase. There's a wealth of information available on the Internet and from your recruiter. Time spent preparing for negotiations may be the best investment you'll ever make.
2. Recognise that employment negotiations are different
When the negotiations are over, you'll have to work with or for the person with whom you're negotiating. Moreover, your future success may depend on that person. So, while you want to negotiate the best possible deal, you need to do so in a way that doesn't damage that relationship. Make sure your expectations are realistic, employers today will not in most cases entertain increases outside of 5% to 15%. The average range for increase is 5% to 10%. Remember that the higher the salary, the higher the expectation of your performance. People receive improved salaries on the basis that with the additional experience gained over the previous year, future performance should add more value to the organisation. The days of getting increases for simply being there, are gone.
3. Understand your needs and those of the employer
To be successful in this type of negotiation, you need to examine your priorities. What do you really want? Are you comfortable with a low salary and a large benefits package? Understanding your needs will also help you determine the type of company you want to work for. For example, a small to medium sized enterprise may be able to offer a competitive salary and a large bonus based on results, but may not be willing to offer shares. By recognising what an employer can and can't do, you'll be able to determine what issues you should press.
4. Understand the dynamics of the particular negotiations
Sometimes you'll have skills that are in great demand and sometimes, you may be one of several employees in a particular section being capable of doing a particular job. Size up the situation and understand your relative position.
5. Don抰 base your salary expectation on what you believe others are being paid
Understand that you are being paid a price or economic rent if you like, for your labour and not for someone elses? Benchmarking is useful but if you are solely expecting an increase based on what you believe others around you are being paid, then you are missing the point, that companies pay for performance. Salary rumours do more damage to employment relationships than any other single factor.
6. Understand the role fairness plays in the process
The guiding principle for most employers when negotiating is fairness. Within the constraints of their budget and organisational structure, employers usually will agree to anything that's fair and reasonable to hire someone they want. Appeals to fairness are your most powerful weapon. Thus, you should be able to justify every request you make in terms of fairness. Your prospective employer will want you to accept its offer and feel that you've been treated fairly. Understanding the importance of fairness as a negotiating principle can make the difference between success and failure.
7. Focus on your goals, not on winning
Negotiation is about exchange. Good negotiations are about a win win result. Good negotiators are as sensitive to the other parties issues as they are to their own. Too often in negotiations, the act of winning becomes more important than achieving your goals. And it's also important not to make your manager feel as if they have lost in the negotiations or been held to ransom by you. You'll have gained little by negotiating a good deal if you alienate your future manager in the process and are probably on a path out of the business without realising it.
8. Know when to quit bargaining
The one sure way to lose everything you've obtained is to be greedy. There comes a point in every negotiation when you've achieved everything you could have reasonably expected to gain. While most companies will want to treat you fairly and make you happy, few managers want to work with a prima donna. Being perceived as greedy or unreasonable may cause the relationship to fall apart.
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