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Negotiating Compensation, Promotions, and Wage Increases

If you have been performing well at work – going above and beyond the duties and responsibilities of the position – and think it is time for a promotion or if your compensation package needs to be increased, you definitely need to understand some of the rules of the game. The rules are the same when it comes time to negotiate a compensation package at the start of a new job.

First rule: You are not ready to negotiate money until after the sale is made. You are ready to negotiate money and the other benefits of a compensation package when you have a "ready buyer." The key words you must hear are "We are ready to make you an offer," or, if you are already employed the words to wait for are "You have been doing a wonderful job." Until those words are spoken, you are not ready to negotiate. So wait until you get the offer or have proven your value to your employer before beginning the negotiations.

Second rule: Understand your value to the employer. Before deciding how big a raise to request, or the total benefit package for a new position, you need to find out what other people earn for performing similar functions. In order to replace you, or to hire someone with your credentials, the employer is going to have to pay more or less the going rate, which you can use as a benchmark. The Bureau of Labor Statistics publishes the Occupational Outlook Handbook, available in most libraries. This annual publication gives detailed salary information organized by industry. Another source is the "American Salaries and Wages Survey," edited by Helen Fisher. To find out how salaries break down by specific region, try the Economic Research Institute’s "Geographic Reference Report."

Third rule: Assess your own job performance or performance capabilities. If you want a raise or want to negotiate your new compensation package with a new employer, you will need to prove you’re worth the extra or starting money. That means you need to take a long, hard and honest look at what you do, or will do, for the company. Working overtime isn’t enough-you need to actually accomplish something during those extra hours or bring a skill set to your new employer that they will value. Think in terms of Quantity: Do you, or will you, produce more than you’re expected to or more than the industry standard? Think in terms of Quality: Is your production of higher quality and does/will it benefit the company by saving money, resources, or attracting more clients? Think in terms of Additional responsibilities or additional tasks: With a dynamic workplace, employees are often expected to perform new tasks beyond those for which they were hired to do. You may also bring a skill set that would allow the company to benefit from your ability to perform additional tasks or assume more responsibilities.

Forth rule: Evaluate the economic health of the employer. You need to know about your company or your potential new employer: Is the business expanding? Contracting? Is the employer hiring new workers or laying off old ones? Is the company an established business? A startup? A nonprofit company? What are the future prospects of your employer and for the industry it operates in?

Fifth rule: Determine how much to ask for. Understanding the prevailing salaries in your industry for someone with your skill set, or your own job performance, and the employer’s financial health allows you to be ready to determine a fair compensation package or raise. Find out as much as possible about the firm’s compensation policies. Does the company have standard ranges for positions? Standard ranges for raises? When are raises given? Who has the final approval for compensation?

Sixth rule: Know your minimum acceptable salary below which you’d start looking for work elsewhere or refuse an offer. If you know you would not start for less than a specific sum, or leave if the offered raise was less than a specific sum, you will go into the negotiations with a clear plan.

Seventh rule: Think big. Don’t be afraid to ask for what you want.

Eighth rule: Build a case. If you have done your research and know where you should start or where you should be, provide that information to the decision maker. List the special skills you would bring to a new job or make a list of your accomplishments so that you can remind the employer of the ways you have, or will, contributed to the success of the business.

Ninth rule: Be firm but flexible. Threats are not a good idea; if you threaten to leave you might just get a pink slip. Don’t talk about other offers. Tell the decision maker that you need to be certain they understand the value you will, or currently do, bring to the operation. By avoiding confrontation, you keep the communication open.

Tenth rule: When you are told "no", make the most of it. You can benefit from a 'no' if you ask why: Is it too soon? Is it a matter of performance? Is money tight? Are you pricing yourself out of contention? Ask what you can do to increase your value to the company. Offer to review a proposal from the company and propose a date in the future to discuss the matter again. Be persistent as most raises or initial compensation packages are not accomplished after one meeting; it takes organized and ongoing effort.

-Dr. Jerry Bills, IJCTC, CPRW
International Job and Career Transition Coach
Certified Professional Resume Writer
Resume Center, Inc.
1-888-632-9050 (toll-free)