It pays to negotiate & bargain

So there’ll come a time when most graduates will reach a point in their career when they feel they want a little bit more. That little bit more being in the form of Great British Pounds – and what better way to seek that extra paper than a pay review? Whether the pay review is part of your annual appraisal, or you’ve simply requested one, you’d better have a good case negotiating for that Rolex you’re planning to buy with it.

image Courtesy of Google

image Courtesy of watchshop.com

Of course, you don’t justify WHAT you want to do with that extra money, but rather WHY you should even be considered to receive it. Thompson (2005) actuates that ‘Negotiation is an interpersonal decision-making process necessary whenever we cannot achieve our objective single-handedly.’ This means that we need to get our manager or supervisor on side and Robbins (2012) can help us do just that with his five step plan.

image courtesy of lifehack.org

image courtesy of lifehack.org

Step one: Preparation & Planning

Do your homework! I’m not talking about writing an essay, but work out exactly what you want. You know you want a pay rise, but by how much exactly? What’s in it for your boss? Get a figure in mind and formulate your BATNA so you can determine your goal.

Step Two: Definition of ground rules

Who’s going to facilitate the hearing? When and where will this take place? If you’d like some privacy ask to hire out one of the function rooms, rather than discussing in the staff canteen. Make sure that the other party understands the sincerity of this review – a five minute meeting won’t be enough time to build your case. Glance down at your wrist – You REALLY want that Rolex!

image courtesy of ehow.com

image courtesy of ehow.com

Step Three: Clarification & Justification

Once you’ve pitched your case, make sure your facilitator is clear on what you really want and why you deserve this salary increase. Your boss may have to report to a higher authority and if you really want your case to have any chance of success, it’s important that you explain, clarify and justify those reasons. Leather wrist strap or tortoise shell?

Step Four: Bargaining & Problem solving

So, you may not get the £6,000 increase that you were hoping for, but this is the stage where you can ‘hash it out’ – come to a mutually acceptable agreement that will leave both yourself and your manager speaking the same language. This is where your BATNA comes into play – what are your alternatives?  More River Island than Rolex? Well, that’s okay – use your bargaining power to re-convene in six months and assess your pay again?

It’s also important to note that using an integrative bargaining strategy that is beneficial to both parties is far more effective in building long term relationships and could mean the difference between facilitating working together in the future, or creating office gossip over the water cooler.

Image courtesy of blog.expertmarket.co.uk

Image courtesy of blog.expertmarket.co.uk

Step Five: Closure & Implementation

Formalise the agreement and propose a date for your next review. Work together on how to implement and monitor your progress over the next six months. Shake hands. You’ve got a rise and even though you didn’t get your ideal figure, your BATNA helped you to define your best alternative and your bargaining influence bagged you another review.  Happy days.

Personally, I want the money, the cars and the clothes. I want to be successful. If you have got Champagne dreams with lemonade money, or purely think you are worth more than what you’re being paid – have you got any further ideas on how to negotiate or bargain to increase your salary? Alternatively, have you successfully negotiated a pay review and how did you secure that rise?

This video shares ideas about the right time and right situation to negotiate a salary increase.

So, come on and share your wisdom – I’ve got my eye on a suave Oyster Perpetual…

– JR –

5 thoughts on “It pays to negotiate & bargain

  1. Can I begin by saying that I absolutely love your blogging style? It has been a while since I discovered a blog that speaks to its readers in such a light-hearted, personal way regarding serious topics and simultaneously gives good advice while incorporating a little bit of humour. And this is coming from a person who spends a lot of her free time browsing and following blogs. Please do keep your wits about you, and trust me when I say you stand out.

    Now onto the topic discussed here. I absolutely agree that it pays to negotiate, and as I have recently discovered, whether new graduates realize it or not, negotiating at their very first job caves the path for their entire future careers. It has been proven that if you don’t negotiate at your first job out of university, you are likely to trail behind your counterpart who did negotiate your entire career, continuously making less than they do. Basically, if you don’t start strong, it is extremely hard or even almost impossible to catch up. Which is why this topic is something that absolutely deserves more coverage and I believe that in this short blog post you have managed to do it justice given the word limitation.

    Regarding what the right circumstances are for negotiating one’s salary, I think it depends on each person’s particular situation and that is not for me to judge, but for them. But the one thing that applies to every employee regarding negotiation is that it should not be done when the person lacks faith in themselves or their performance. A healthy amount of confidence is absolutely vital when it comes to negotiation. If one goes into a negotiation scared and worried they will not be convincing enough, then they are prepared to lose and they probably will. An employee should have faith in themselves above all – not just when they are seemingly not being observed while working, but all the time. Be good and know your strengths.

  2. Josh,

    I have to say that I overwhelmingly agree with Maria… Your writing is a pleasure to read, and makes me green with envy!

    I really like your post and think it balances the right amount of theory with personal insight, opinion and experience.

    For me personally, I think the most important factor in negotiation (in the workplace context) is really knowing your worth, doing a SWOT on yourself is priceless as far as I’m concerned. I think if you know exactly where you stand within an organisation, and what value you add to it, you’re half way there, even in this economic climate I think being able to demonstrate to your boss, that you’re a huge asset to the company, is likely to make them much more open to the idea of throwing a raise your way.

    Maria is bang on the money, when she talks about negotiating straight out of university. I too have read research that fully supports the idea, that the earlier you start the better! I think being a young graduate can be a daunting experience, and having to slog it out for six months doing work experience, makes you a lot more likely to jump at the offer of any paid work… However, within reason I don’t think it at all silly to ask for more money if you really think it’s not an unreasonable request!

    I have a friend who graduated and was offered a job soon after, although it was offering £18,000 he knew that it wasn’t a viable option in terms of living off that wage. When he first suggested the idea of increasing it to £20,000 the employer seemed uninterested, but as soon as my he was about to walk away from the offer altogether the employer soon agreed to the extra £2,000. It just goes to show, if you portray the right image and make an employer want you, you really do have a lot more room for manoeuvre.

    Great post – it’s been my favourite read so far!

  3. Hi Skills of Persuasion & Oliver – You’re both very kind and I’m glad you liked the post – I take it you both are Rolex fans?!

    I hear what you’re both saying about starting early. I guess its a case of ‘If you don’t ask, you don’t get’ – and I agree with you both about knowing your strengths – a SWOT analysis on yourself is a clear way to visualise what you have got to offer! My post is based around assuming you already have a position within a company, and I think once you have your foot in the door, you get to know how far you can push your luck and who you have to negotiate with to get that raise, or that day off even.

    I think one thing to bear in mind is, the type of job you’ve got. You have to do your homework and find out similar salaries of others either in your company or in similar industries and what benefits or rises they have received. This way, you can build your case and have a solid ‘argument’ when it comes to the negotiation and bargaining process. This Guardian article tells of how employment is rising, yet our salaries are taking a hit – do you think it is fair to pressurise your boss with news like that?

    Starting in your first job to negotiate salary is extremely daunting – Getting a job is not made much more of a promising prospect when you read articles which tell you, unemployment rates are paralleled with school leavers!? Can you believe that despite going to University, there are still 25 per cent of 21 year olds, with a degree, who have not been able to secure a job? So, wouldn’t you be lucky enough to simply accept any job that comes your way? Oliver – your friend was extremely lucky and must have been very impressive for the employer to change his mind so quickly!

    However, do you think that there are other ways to to secure yourself that pay review or help you work towards one? And given that we are in a tough economy, do you think that pay reviews are distributed more in some industries than others?

    JR

  4. Hi Josh,

    Saw your Linked In post, hope you don’t mind my comment.

    You’ve given a basic outline of how to approach a pay review and on paper this seems extremely easy – and in most instances it is. Some companies, however do utilise and adopt a pay review process as part of their employee benefits packages, therefore you may not have to go to all this trouble. The key is finding the right job!

    I think one great way of getting a pay rise or pay review is to actually go searching for another job. Here me out! I work in Risk Management and every six to twelve months we get a member of our team who decides they’ve either had enough or they want to progress further (basically they want more pay). They will usually have already sourced or secured another job at a rival company and they will tell us this is the case – So, what my company does, is offer them an incentive to stay with us, better or equal to what the other job is willing to give and normally that works, and the member of the team will stay. You see, companies invest a lot into their staff, and it takes so much more effort and time to keep recruiting new members. It also builds trust with our team, as this makes them realise that they are valued.

    I’m not trying to suggest you should threaten to leave your job JUST to get a payrise, but this is one of the ways, I’ve experienced can work! You have to be careful though that you actually do have another offer set in stone, as your employee could be jumping for joy at this news and hand you your P45, or even call your bluff, leaving you with NO JOB!

    Best
    SW

    • Hi Sheree & Thank you for your comment,

      Wow, so from what you’ve said, it seems that the right job should really be offering you renumeration progression as part of your benefits package? This would definitely cut out the anxiety of asking your boss for even a meeting to discuss a pay review!? But like you say, those five steps are simple and easy to follow, and I would feel comfortable asking for a pay review via that method.

      With regards to bringing something extra to the table (such as another job offer) you mentioned the risks of potentially ending up with no job! Would you still recommend doing your homework and following Robbins 5 step plan if you found yourself in a situation such as your team member? Or would you be as bold as to just hand in your resignation?

      JR

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