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 following advice:
Focus on getting the best deal for yourself that is still good for them, too.
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.