Adopting a strategic approach to salary negotiations

It's important to choose the right moment to enter salary negotiations. But too much spontaneity can also be risky: If you don't consider your arguments carefully, you could end up with a stalemate situation.

For many employees, the subject of salary can be quite emotional. If they believe that their salary is too low, they feel that they are being treated unfairly, neglected, and underestimated. Bosses have a more rational approach. Is higher pay compatible with the budget? Does the employee earn enough money for the company to justify a higher salary? How does the employee's performance weigh up compared to that of their colleagues?

Before employees initiate a discussion about their salary, they should be aware of these different dispositions and interests. On this basis, they can choose the best time for the negotiations and the most promising argument.

In the negotiations, employees have to sell their performance. Bosses are the buyers—and must be made aware of the performance that they should pay more for. That's the case after completion of a successful project or winning a new customer or a good order. Alternatively, employee performance appraisals may be suitable, since the aim of these interviews is to discuss past performance. If past performance was good, it may be time to talk about appropriate remuneration.

But what is appropriate? This is what must be balanced out in the discussion. The guiding principle should be that the buyer wants to be courted. Pressure paralyzes the negotiations in the same way as a brusque rejection of an offer or insisting on a specific figure. Discord distracts from the actual subject: good performance deserves to be rewarded.

If you argue without consideration you will get nowhere. The obvious answer to threats that you could get better paid jobs elsewhere is: “Be my guest.” Moral pressure—such as comparisons with colleagues, accusations of lack of appreciation or references to how many mouths you have to feed at home—is misplaced. Rather, your aim should be to emphasize the added value that your work generates for the company. Your boss needs to consider that information. Harassment will not work. After all, your boss needs to weight up rationally how much your performance is worth to the company—and how much more you could achieve.

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