Negotiating Your Salary: How to Make $1000 a Minute by Jack Chapman

• New research data supports a radical shift from "Let them go first", to "you go first".
• We put hours of practice into a sales pitch, hours of research into understanding the company, and two or three nervous days into interviews, straining to beat out the competition. The most important part, the whole reason we started in the first place--getting paid--we often handle in sixty seconds or less!
• For months afterwards, we roll up our sleeves and give our new job every ounce of brains and drive we can supply. But when it's time for a raise, most of us just accept whatever we're offered. How many minutes do we spend negotiating the money? Zero.
• Proper negotiations can double your income. Mishandling negotiations can be a multi-million-dollar blunder.
• Winning at salary and raise negotiations requires, first of all, understanding the principle of quality.
• Quality is remembered long after price is forgotten.
• Compensation negotiation is about those [quality] 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.
• 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.
• When you negotiate for your true value, both you and your company win.
• Sticking to those [five salary making] rules assures your best chance of getting every dollar and benefit possible.
• Here are the five salary making rules ahead of you.
• When to discuss money.
• Who goes first.
• Your first response.
• Your researched response.
• Clinch the deal and deal some more.
• Salary Making Rule 1: Postpone salary talk until there's an offer.
• Your biggest leverage and strongest tactic in negotiations is to NOT show your hand to the employer. Rule 1 says to avoid discussing and disclosing salary information until they are actually making you an offer.
• Salary Making Rule 2: Let them go first unless...
• Good negotiations achieve a happy medium between your ideal compensation package and what the employer is willing to offer. But being at the higher end of the medium is better for you than being at the lower end.
• Recent studies show that the final negotiated amount on this common ground tends to end up closer to the person who goes first.
• If you can tolerate a small degree of risk, research says you'll do better if you go first.
• Salary Making Rule 3: Repeat the number of the top of the range, and be quiet.
• Don't compare the offer with your most recent salary. Instead, use the thirty second to compare their offer with your number trio (ideal, satisfactory, and no-go).
• Employers' basic principle in hiring (and converssely, firing) is the Make Me a Buck principle. They bring you aboard because they think your contribution will pay back more money than you cost.
• Without a "bottom line", you may be swayed to accept a salary that's too low. If you are clear about it before you go into the interview, you are in a solid position.
• Salary Making Rule 5: Clinch the deal, the deal some more.
• It is extremely important to maintain your enthusiastic voice, gestures, and energy so your request for time is not taken as a lack of interest in the job. There's a delicate line here between demanding time and requesting clarity.
• Good negotiations are ones in which both sides applaud the outcome.
• The more you can do, the more complicated are the problems you can solve for someone, and the more your labor should be worth.
• The employers' first principle is: Labor is intangible.
• The employers' second principle is: The main variable that determines compensation is the extent of the employee's responsibilities. The more people or products an employee's decisions affect, the more money those decisions influence as well. Salary is merely an indicator of that responsibility.
• The employers' third principle is very simple. The "universal hiring principle" is: Make me a buck.
• Your decisions and labor must gross a company several times your salary to make hiring you worthwhile.
• We all work on commission. We all earn only a percentage of what we make for the company.
• Either you make more for your employer than you cost, or you go.
• The basic principles of effective salary negotiations:
• Labor is intangible.
• Salary relates to level of responsibility.
• Employees must make more money for the company than they cost.
• When you examine your present compensation or look at a new salary, hold this attitude: "When I'm paid the very best my skills can get in this company in this market, I've made a good bargain."
• A budget is the way we hold on to the illusion that we are controlling our finances.
• Employers are always curious about your most recent salary for just one reason: to screen you. When faced with a lot of applicants, they use salary as a quick, shorthand way of assessing the fit and narrowing down the list.
• Postpone salary discussions until you have been offered the job.
• When Mr. Employer offers you the job, he's either in the judgit stage, or as close to it as he's going to get. He's convinced you're the best candidate. Therefore, he's more willing to make the pay scale flexible, and even practice creative budget juggling, to get you.
• Wait to discuss a raise until after your performance review. If your performance review has been impressive, your boss will be paused at the judgit stage, ready to be flexible about money.
• If you find it awkward to play "dodge the salary" when the employer brings it up you can head off that entire scene using the "handle it now" technique.
• Delaying salary talk until there's an offer is almost always the correct move.
• A tug of war over disclosing your money requirements hurts your chances of being hired because it destroys the rapport needed for hiring. Your rule of thumb here is to put off the first request, maybe the second, but if asked again you'll need to handle it more directly.
• Interviews start with employers buying and you selling.
• Negotiations, at their best, should leave both parties feeling like they've won. At the very lest, they should each feel like they got a good trade.
• In good salary negotiations you attempt to exchange your time, energy, ideas, and skills for the employer's money. A good trade leaves you feeling well paid, and the employer feeling satisfied with the [promise of the] fruits of your labor. Both of you are happier after the negotiations because you each got something better than what you had to begin with.
• If you start laying out your ideal compensation package and they're still interviewing other candidates you can blow yourself right out of contention.
• Recent laboratory research indicates that the person who goes first wins! That is, research says that you'll make more money if you start high and allow yourself to negotiation down than if they go first and you try to negotiate up.
• There's a psychological mechanism researchers call "anchoring" which says the final negotiated amount will be closer to the first speaker's position (the anchor).
• If you have no concern of losing the job offer altogether, then you may "drop anchor" first, and take advantage of the opening position. [...] On the other hand, if you are more concerned with lockin in the offer than a few anchoring dollars, allow them to speak first.
• By letting the employer go first, you have a rock solid, secure offer from which to negotiate.
• Unlike many other types of negotiations, in salary negotiations, one of the most important outcomes is that you get the job. By contrast, when you're negotiating for a car, a house, or a vase at a flea market, it doesn't matter too much if the deal falls through because there's always another car, house, vase, somewhere else. Not so with a job offer.
• Well before the negotiations time, you should have three numbers all ready:
• Your ideal (I)
• Your satisfactory (S)
• Your no-go (N)
• The Ideal (I) should be a package that would thrill you. A package you think no one would be likely to actually offer you, but it's not pure fantasy, either--there's a rationale underlying it and you can defend it if needed.
• The No-go (N) number is as low as you'll go. It doesn't necessarily mean you'll walk away, yet. If your employer can't reach this number, you'll declare that you're too far apart and ask for 24 hours to consider it.
• The Satisfactory (S) number is in between the Ideal and the No-go. It is your own assessment of where you think the negotiations will realistically end up. It inhabits a win-win common ground.
• If you choose to go first, start with your Ideal number. Let the Hiring Decision Maker know that you know that the number might be high, and that you put it out there as a target, not a demand. Include the rationale for your Ideal number so they understand the realistic basis for your assessment.
• When you hear the employer's figure or range, follow Salary-Making Rule #3: repeat the figure or top of the range, and then be quiet.
• You must repeat the figure or top of the range with a contemplative tone in your voice. Your enthusiasm for the job and company and industry has been unbounded up to this point. Now let a quiet look of concern grace your countenance and gaze at your slightly shuffling feet as you ponder this offer. Count to thirty and think.
• Hourly workers can easily convert an hourly figure to a yearly one by doubling it in thousands.
• The most likely outcome of this silence is a raise.
• Listen. Be quiet. Think. Compare, contrast, evaluate, and then respond. What do you respond with? The truth.
• The truth is either "Sounds great", "Sounds acceptable", or "Sounds disappointing". You'll know which one is correct because before the interview you'll have followed the advice in this chapter and prepared your ISN numbers. That will give you the strength and power to negotiate for your full value because you'll have the information to back it up.
• Note that your past or present salary is only one indication of your market value. [...] So don't compare the offer with your most recent salary. Instead, use thirty seconds to compare their offer with your research, using the formula below.
• Understand that a fair market value is not one neat, tidy number, but a range from Ideal at the top to No-go at the bottom.
• Satisfactory is where most negotiations land. But the road that ends up at Satisfactory begins with your Ideal.
• An ISN market value is a composite picture made up of four pieces: your objectively researched value, your extra individual value, and what I'll call your risk-factor dollars.
• Objectively researched value comes from current published data about the going rate; this year's average earning range for people doing the kind of work you're considering.
• Individual value is a subjective assessment of the strength of your past track record as it applies to this new job or promotion.
• Risk-factor dollars are compensation you are willing to make contingent on your future success; speculative compensation.
• Find out in what range people get paid for work similar to yours by consulting published surveys. Make sure you're comparing apples to apples, that the salary you find matches the responsibilities of the job you expect to be paid for.
• Nothing beats PayScale for up-to-the-minute salary information.
• [Benefits] are important for two reasons. First, they can complement a solid salary, making the total package even better. Second, if the salary you've been offered isn't quite what you expected, adding on some of these often-nontaxable extras can bring the entire offer very close to the figure you had in mind.
• The first thing to explore after negotiating your base salary is the salary review. One of the reasons for negotiating the best base salary first is that raises are routinely computed as a percentage on that base. The higher the base, the greater the [...] raise will be.
• If your raise is 10 percent one year, but inflation is 10 percent over the same time, then you haven't received a raise at all. You're simply being paid in purchasing power exactly what you earned the previous year.
• Once you get your potential employer to agree to a COLA, then you have already raised the actual percentage of your next raise because it will need to be computed and then added to the COLA.
• Whatever time you estimate you will  need to show tangible results, double it to be safe, and ask for the review at the end of that time.
• On straight commission, your compensation is strictly a percentage of your sales. To many people that arrangement seems like the most risky, but it's actually the one most under your control. If you sell well, you're safe; no one will fire you.
• The best salespeople love straight commission because they know they get every dollar that's coming to them and that their income is entirely in their control. However, straight commission is not practical if you can't make sales right away. When the sales cycle is lengthy, straight commission is ordinarily not workable.
• When your sales work involves a lot of new-account generation, you would be wise to negotiate a residual commission on those new accounts. The justification here is that the reward for selling the account belongs to you; after you leave and the account is maintained, a portion of the income should still be yours for a while.
• Watch out! Don't get cheated out of your commissions when you leave. One of the most common, but avoidable, misfortunes in negotiating sales commissions is not being clear about what happens when you leave the company.
• Whatever your commission structure is, make sure you get clear exactly how commission and pay are handled when you leave the company.
• Even if you're not in sales, negotiating a performance bonus can be a very win-win way of earning extra income. A bonus based on the profitability of the area you're working in gives you an incentive to work and your employer a way to make more money.
• For positions in which there is a lot of travel involved, discuss the travel-and-mileage allowance or the possibility of getting a company car. A company car may be worth several thousand dollars because it saves your paying insurance and maintenance costs on your own vehicle and depreciating that vehicle, and in certain cases may even save you all the taxes on those expenses.
• If you can't increase the money, perhaps you can reduce the time! Negotiate vacation, personal days, or your hours per week.
• Let's get one thing clear on the vacation issue. No one pays you to go on vacation. You earn it.
• The hardest part about job hunting is that offers generally come one at a time. You are seldom comparing one offer with another. Instead you're comparing a bird in the hand with two in the bust. The key in buying time to leverage other offers is to concentrate not so much and getting the firm offer extended as on accelerating the pending one.
• People often aattach identity, status, value, and prestige to their incomes, so revealing them can be scary, too intimate.
• Keep in mind again that your salary is linked to your level of responsibility. You need to treat salary as a thermometer; you'll be telling people how much heat you can take.
• Part of getting top dollar is your self-presentation. If your own estimate of value and competence is not matched by your contacts' estimates, the problems could be your image or communication.
• Getting what you're worth through your image requires dressing in your salary range, displaying etiquette in your salary range, grooming in your salary range, and speaking in your salary range. There are studies that show the most reliable indicator of a person's salary level is vocabulary, and that a limp, fish handshake could cost you thousands of dollars.
• Look around you and notice the way your target-level people dress and act. Imitate them or their superiors.
• Besides looking the part, you also need to communicate your capabilities in a strong, positive way that is directly understandable and applicable to your prospective employer's needs.
• "overqualified" relates to salary negotiations one time out of three. It means your potential employer is worried that:
• You'll be bored, so bored that you'll last a few months, then quit for more exciting work;
• you'll be expensive, so expensive that you'll work for a few months, then quit for a better-paying job;
• a polite way of saying they don't like you and think that in a few days you'll alienate everybody and get fired.
• When asked about their current earnings, some people are tempted to inflate them. Never do that.
• Your aim is to establish value before discussing price.
• When interviewers say "inflexible" or "nonnegotiable", they're still in the budget stage. So wait for the judgit, and look for ways to change the box you fit in, the box the job fits in, or the box-maker's minds!
• Final acceptance of an offer can be handled by phone, but whenever possible avoid doing the initial negotiating that way.
• The company's hiring decision is based 95 percent on your personality, enthusiasm, and transferable skills. Only 5 percent has to do with your specialized knowledge. Since the company can't teach manners and common sense, they company hires it. Since it can teach its subject, it trains you. Therefore, 95 percent of you is experience worth bargaining about.
• If you're given something that sounds like their lawyers wrote it, let your lawyer read it. There's a strong probability you won't really know what it means! Sometimes, more important than telling you what's there, she can tell you what's not there; i.e., default provisions such as dispute resolution attorneys fees, commission payments, etc. So, read it, of course, but have an attorney tell you what it really means.
• Most states have employment "at-will" laws, which means that, as long as employers don't discriminate by race, creed, sex, age, certain disabilities, etc., or break any individual employment contract, they are free to hire and fire anyone they wish--and you're free to quit! While being fired is never pleasant when it happens to you, all in all the free-enterprise system runs better with this flexibility, and it makes it easier for the "system" to hire you somewhere else.
• In my opinion, you'd be better off to get a severance and go forward with your life. Get your "revenge" by negotiating a severance, taking the money, scoring a new job quickly, and laughing all the way to the bank.
• In most situations, employers aren't required to offer even two weeks' notice (severance), though they generally won't go below this unless you are terminated for cause.
• Severance pay should be in addition to, not in lieu of, accrued vacation and personal time.
• If you've been let go, don't go yet! Negotiate a severance. Better yet--negotiated severance in the hiring interview.
• There is simply too much variation between companies and employees within companies to provide a "hard-and-fast" negotiation strategy for stock options.
• A stock option gives you the right to purchase a certain number of shares of stock in your company for a fixed price. It is a contract between you and the company, subject to certain terms and conditions.
• The Most important factor that will determine the value of your options is the performance of the company's stock price, something that is not negotiable.
• Employers don't give raises, employees earn them.
• People act as if they're entitled to a raise every year but, from your employer's perspective, continued increases in salary without increases in value merely make you a prime target for the next layoffs.
• If you put your brain to it, you can actually work less time and accomplish more.
• How do you negotiate a raise? Communication. Here are three communication steps:
• Document your results.
• Get your boss to acknowledge them.
• Negotiate a raise the same way you'd negotiate a salary.
• Measure your achievements with respect to dollars, people, productivity, exposure, or anything else countable or measureable.
• Knowing what your boss values will help you measure your results in language he or she will understand and appreciate. If you don't know what your boss considers important, ask!
• Don't just wait for reviews and anniversaries to ask for a raise, either. An ideal time to get an increase is when changes occur at work.
• Sometimes a new job just creeps up on you. When you document your accomplishments, notice how your job has evolved. [...] Do some subtraction. This year's responsibilities minus last year's responsibilities may yield a big remainder. It's called a new job. Instead of a raise, it deserves a whole new salary based on its actual value to the company.
• The clearest way to break the box your employer thinks you're in is to invent a new job title.
• You don't have to answer every single question an interviewer asks; you're not on the witness stand.
• Most of us are not accustomed to negotiating for ourselves. Our present habits push us to do just the opposite: accept what's offered and hope for the best.
• Habits are very strong controllers of even simple behaviors.
• Coaching helps us see ourselves objectively.
• I strongly urge you to practice. [...] Although negotiating may never by 100-percent comfortable for you, you can still make it sound more and more natural.
• The practice you put in will generate good new habits and a high degree of comfort that the employer will interpret as confidence that you truly deserve what you're asking for.
• Increased salaries and raised are nice, but financial independence is even nicer.
• When compensation is negotiated in a win-win way, both you and your employer will be motivated to get the very best performance and accomplishment from the situation. That, in turn, will produce more money for the employer and career satisfaction and success for you.