budgeted at $75,000 for this position, Polite,” says Mr. S. Tablishment, “and we really shouldn’t talk any further unless that figure fits your requirements.”
“Hmm,” Polite thinks, “not quite what I expected, but no use quibbling now; I want to stay in the running. I can’t reject it. Better give in here and negotiate later.”
“That seems fair,” she says. “Tell me more about the qualities you’re looking for.”
Thursday, Polite’s phone rings. “Mr. Tablishment calling.” He says his firm is offering her the job, but she should decide right away because he has to contact the other candidates.
“Oh my,” she thinks, “if I push now, I might lose the offer. Better say yes and negotiate a raise later based on my performance.”
On Friday Tablishment tells his comptroller, “Harry, I know we had $85,000 set aside for the new position, but you can put $10,000 of that into my travel-and-entertainment budget. I’ve found someone with real potential, and she’ll start at $75,000.”
So Polite loses an annual $10,000, and all the raises based on that.
Example 3: Mr. Hardwork Loses His Raise
Mr. Hardwork is hoping for a substantial raise this year. His accounts have perfect records and 10-percent-better profits than last year. Several customers have written to the company to say what a conscientious job he’s doing.
The raise is a week overdue, actually, because his boss has been discussing raises and overall compensation with the board since January. The grapevine has rumored that the raises will surface on Groundhog Day.
On February 9, Hardwork finds a note in his mailbox praising him for all his fine work the past year and acknowledging his wonderful contributions. It also informs him that he has been awarded a “very generous” 5-percent raise.
Hardwork feels cheated. Complaining bitterly of how unfair that is, he storms into his boss’s office saying he deserves at least 10 percent for his outstanding work.
“Gosh,” says the boss, “we’ve really gone over all the records thoroughly. The board personnel have looked at them and consulted industry standards. That’s the best we can do. But tell you what, I’ll talk one on one with the CEO and mention you specifically, and we’ll see what we can do.”
Hardwork never got that extra 5 percent, and he didn’t think to make it up by negotiating perks like vacation time, education, car, health-club membership, bonuses, and IRA contributions.
Hardwork lost half his raise. Don’t let that happen to you.
The Principle of Quality
Winning at salary and raise negotiations requires, first of all, understanding the principle of quality.
“Quality is remembered long after price is forgotten,” I was told by an accomplished salesman who was a client of mine. He reminded me that the many “bargains” I’d picked up in my life had worn out quickly, broken, or performed only after silent prayers or loud curses. I then remembered the times when I’d paid dearly for the “top of the line.” Almost every one of those tools, appliances, and articles of clothing is still with me. Each time I use or wear one of them I relish the craftsmanship and care, admire the fit and effectiveness, and appreciate the durability.
Compensation negotiating is about those kinds of purchases. It is about the joy and satisfaction you will bring to employers when they see their investment in quality—yours—compounded daily, easing their minds, and making more money for their businesses.
Smart employers know there’s no free lunch where talent is concerned. The relentless downsizing of the past two decades produced “lean and mean” companies where every single person’s talent and contribution counts. The proliferation of popular management books extolling the team-oriented approach to profitability also brings home the truth that human resources are the most valuable elements in a successful enterprise. On one hand, employers understand that they have to pay quality prices for quality personnel. On the other hand, since they are successful business people, they try to get the best quality for the lowest price.
Their job is to make good business deals. Your job is to see that they recognize your quality and pay you your best price. If you don’t, it can cost you thousands of dollars and a big chunk of your self-esteem.
Let me show you how much better your working life can be when you do it the right way.
Figure 1-1 . Entrenched in the Vicious Cycle
The Difference between Vicious and Virtuous Cycles
First consider the vicious cycle. Mr. Drone is overworked, underpaid, and undervalued. His attitude is less than 100-percent enthusiastic and his work of course shows it. His co-workers notice it, too, and the boss is secretly glad she didn’t give that extra 10 percent because, after all, Drone is performing only adequately.
“Raise?” she says. “Clean up these performance reviews and we’ll consider it.”
Maybe Drone says, “I quit!”
Perhaps the boss retorts, “You’re fired!”
Or maybe Drone just quietly shuts down. He does his job absent-mindedly, waiting for the moment when he, Walter Mittylike, can walk out on the place on the busiest day of the year. “Then they’ll miss me,” he says. “They’ll be sorry!”
Sooner or later, one way or another, Drone is out the door. To be polite, his employer gives him an innocuous letter of recommendation damning him with faint praise. Drone and his ego, a little worse for wear, hit the job market wondering, “Am I really worth that extra 10 percent?”
He sheepishly exaggerates when interviewers ask, “What was your last salary?” And since they weren’t born yesterday, they pick up that Drone either didn’t make that much or isn’t convinced he was worth it.
A few desperate weeks pass. Drone’s ego, once tall, is now barely crawling into interviews. Finally, someone offers him a job! Not quite what he expected, but it beats unemployment, and maybe this employer will notice his value and give him more money later.
The vicious cycle begins again, a little more entrenched.
Ms. Worth
Now consider the virtuous cycle, the story of Ms. Worth. She negotiated for top dollar in her first position. Her boss knew Worth was expensive, but convinced himself she was worth it, and placed serious responsibilities in her job. Encouraged by her boss’s trust and challenged by the work, Worth extended herself, putting out 120 percent while tucking success after success under her belt.
Figure 1-2 . The virtuous cycle of Ms. Worth.
