Here's Val Aurora's "short version", but you should really read the whole thing;
1. Negotiate! It will almost never hurt you, and almost always help. Screw up your courage and just do it!
2. Do your research - know what you are worth. Ask for advice from knowledgeable, well-compensated people with more skill and experience than you.
3. Never ever give the first figure for salary - make the person hiring say a number first, even if they ask, repeatedly. Never ever ever! If there's a form, don't fill in the "Salary" blanks. Just don't do it.
4. Always act slightly disappointed, no matter what the job offer is. Ask for time to think about it (i.e., plan your strategy) before getting back to them.
It's great if the other party gives a number first, but this binary, on-of-us-has-to-be-a-looser game can be a pain in the ass. Have a fall-back strategy, like giving a high number first, or even better, simply be very pragmatic, i.e. know what you're worth (or want), say that number first and don't ever budge. When pressed, point out that you understand it's bad negotiating strategy to give a number first, but you're not playing games here, you being very straight up.
Ditto. It also doesn't hurt to come off as sincere.
If I like you, I'll push to get you. Simple as that. I'd like the best deal, but at the end of the day I'll do my best, and I'll let you know how far I can go. At that point the ball is in your court to turn me down.
But don't start talking about your worth. That just comes off as cocky, and generally speaking, I've got a pretty good idea what the position is worth to me.
It's a fine line of course. I wouldn't recommend kissing up. I'm just suggesting that there's ways to communicate your value without giving the impression that you're going to be a thorn in my side and not worth the trouble.
It comes down to the type of person you are dealing with really but the most pragmatic approach would be to indicate that you feel you deserve an increase but are stuggling to quantify how much as your perception of your worth to the company won't be as accurate as theirs. At that point ask them to suggest a figure. Give them the opportunity to take time away from the discussion to think about it.
The only negative about putting the ball in their court is that it gives them control of the negotiation as they can easily come back with an extremely low figure stating that they have discussed all of the options with the appropriate personel and the quoted figure is their absolute maximum allowable increase, leaving you with zero scope to stretch it.
The original article is more focussed on "I've just got a new job", where there isn't your current salary as a peg. It's going to be a lot harder to negotiate given that.
What you have to do is somehow reframe the conversation in terms of what it'd cost to hire - and train - someone to replace you. This only works if you really are essential, of course.
The "we're all thieves" bit I guess (the downmodder wasn't me).
Anyway, it's wrong: your new employer has to know your previous salary so they can calculate your tax correctly. If you lie about it, you will get caught. Lying in an interview/on a CV == instant dismissal.
now, I am not advocating lying... but at least here in America, the employer has the employee fill out worksheets to figure tax deductions, then at the end of the year the employee evens up with the IRS. (if your calculations are off and you underpay by more than a certain amount, you have to pay penalties on top of paying the owed taxes, so the employee has an incentive to get it right.) In 15 years of working, I've never had an employer ask what I was getting before outside of salary negotiations, and I've been in situations where I owned my 'previous employer' so I'd know if they tried to contact the previous employer to verify income.
So while I think lying in general is a bad strategy, in part because you don't know when you'll get caught, I'm fairly certain that American employers won't catch you through their tax calculation process.
I think my terse reply emphasized the wrong point and was completely misunderstood. Sorry.
I am not saying to maliciously lie about being underpaid, nor about non-salary compensation to your new potential employer. What I am saying is that during the initial negotiating process, when they ask "how much did you make at your last job?", if you suspect they might try to low ball you or negotiate you down, then you can maintain the advantage by lying and telling some arbitrary higher amount. Although if this is happening to you, you probably might want to look else where for a job. Unfortunately the economic reality means that is not always possible—who hasn't accepted at least one job from an employer they would not ideally choose to work for?
This thread and my reply is about the well-known claim that in any salary negotiating process, who ever first lets slip a specific dollar amount loses the advantage in the entire process. My reply was simply to point out that the entire logic is premised on a flaw, namely that you, the job candidate, are the one telling the employer how much you used to make, and then naming that amount becomes equivalent to losing the advantage of "don't make the first move." Since in most cases your new employer has no way to even verify what your previous salary & compensation was, they are utterly reliant upon trusting that you are telling them the truth. I have no idea what later commentors were saying about telling your new employer what your previous taxes were. I have never heard of any employee being forced to share their tax info with future employers. (No doubt there are some professions and jobs where this happens, such as those elected to public office or serving the public interest.)
My point was this:
in any negotiation process involving money it is a mistake to implicitly assume either party wants to be perfectly honest to their own disadvantage. If you look at any economic process like salary negotiation through the mathematical lens of Game Theory, you would never expect any "game player" to give away such an easy advantage.
Now I know this is going to offend many because it stabs the heart of the economics driving what we (falsely) believe is a strictly "ethical" matter, but please hear me out. I say we are all "small thieves" in our own context-dependent ways, because there really is no such thing as an objective "price." Rather, all prices are simply an arbitrary amount somebody is "willing & able" to pay. Any time you buy or sell, you first have to determine how much you can get from the other party. We are all skimming off the top of somebody else's profit margin, no matter how small.
No salary negotiation I've ever heard of followed this logic:
Recruiter: "how much did you make at your last job so we can trick you into making the first move and losing the advantage in this Game Theory-based negotiation?"
Candidate: "how much are you willing to pay?"
Even though in reality that is precisely what both sides are already trying to do. Size each other up and determine if both parties can agree to mutually benefit within their financial constraints. It's economics 101. But neither party will be honest and tell themselves nor the "opponent" that is what they are doing. And that's equivalent to lying—like Mark Twain said: "the worst lies are told in silence." And that is why I say we might as well throw out any ethical preconceptions and just look at it as a strictly game theoretic, economic process.
Since I don't even view this through the lens of ethics, I can playfully throw around the term "thieves" as a way of winking at the rules of the game itself. Who hasn't played cops & robbers and had fun pretending to be the robber?
To further see my point, think about the exact same situation, but inverted: if you, the candidate, were to ask anyone under the new potential employer: "how much did you make last year?", could you expect anyone to tell you?
Or ask the CEO: "I might want to work for you, but how big was your bonus last year?"
The conversation would come to a screeching halt right there.
In our era of Too Big to Fail, where the average CEOs makes hundreds of times the average salary of their lowest paid employee, why do so many of us "worker-bee" types have such a problem with turning the tables and fighting fire with fire? How do you think the CEO and the big guys got so big? How do you think the global Labor movement achieved so many gains on behalf of workers back in the 1920's? Why shouldn't employees be able to do the same today on a smaller scale? Fair is fair afterall.
That is all I'm saying. Stop voting down my insights just because I explained myself poorly and it sounded like something morally offensive to your biases. Where's the fun in having biases if we can't debate them on the Internet. :)
Recruiter: "how much did you make at your last job so we can trick you into making the first move and losing the advantage in this Game Theory-based negotiation?"
Candidate: "how much are you willing to pay?"
Isn't that how it pretty much works always? I mean, personally I'm pretty bad at negotiation. If it is something that really matters, I always need to get multiple bids. I mean, personally, I switch jobs fairly often, so I think that my old salary is usually pretty fair... saying "I am making X now, beat that" seems to work okay. I am leaving some money on the table, yeah; The thing is, as an employee, there really isn't that much room to negotiate most places. Especially larger companies have strict guidelines for pay for particular positions. Even at smaller places, the boss is very conscious of perceived 'fairness' - The boss might not like his employees talking about money, but he knows we do it anyhow. The idea is that paying one worker more than another without an externally visible reason can be damaging to the business above and beyond the extra cash expended.
The problem is that the employee is at a /massive/ disadvantage, even if she is a good negotiator. As an employee, you are applying for a job designed for people who are not primarily driven by money... and you are competing with other people who are also primarily not driven by money. If you apply for a full-time employee position, you are saying that you don't really care that much about maximizing your cash return on your time... that's not what full time jobs are for.
Listen to all this talk of 'work-life balance' - most jobs are not designed for people who want to retire at 30. most jobs are designed to be comfortable enough that you can do them most of your life. And really, that's what most people want.
It's easier to maximize cash as a contractor, 'cause people who value safety, stability and comfort leave contractor positions as soon as they can, leaving the field to the mercenary and the incompetent, so it's a place where a competent mercenary can thrive.
eh, I guess what I'm trying to say is that if you are an employee, you have already traded away money for comfort and stability. no matter what you think about the fairness of continuing to be honest in the face of what are essentially professional liars, for most of us, for various reasons, not having to lie is part of that comfort.
More cynically, many people here are not anonymous... Few few people, I imagine, are willing to publicly and non-anonymously advocate dishonesty.
In my profession, this is known as "controlling the document." It is often true that he who controls the document controls the deal. Psychologically, if the negotiation begins with with your proposals, it's likely to proceed from your perspective and not the other guy's. The end result is much more likely to be in your favor under such circumstances. Most people in the real world are too lazy to draft their own contracts and, if they do, often do a poor job. Always be the first to present the contract. By doing so, you are taking the initiative in setting the terms of the deal for the remainder of the negotiations.
In the few [play by email] games [of Diplomacy] I've played so far, the majority of players I've negotiated with have tended to open negotiations after every turn something like this: "Hey, that last turn went well/OK/bad for our alliance. Where do you want to go from here?" I believe most players who do this think they are trying to force the other player to "show his hand," but I don't see what that accomplishes. In my view, opening a negotiation in this fashion is a huge mistake. It concedes all of the negotiation momentum to the other party and gives him a chance to write the draft contract which will form the basis for the remainder of the negotiaion. It seems a lot of leverage to give up in order to go on a fishing expedition for information that is not likely to be terribly useful.
You don't have to take my word for it. Read the [end of game comments] in Dan Shoam's games which are published regularly in this 'Zine. Notice how Dan tends to dominate the diplomatic front in his games almost by sheer volume alone. It is not that he merely sends lots of press. He also makes all of the proposals. The other players in his games invariably play by responding to his ideas, rather than generating plans of their own. Dan seizes the negotiating momentum early and never lets go. His is the best application of lawer-like Diplomacy that I've seen. Anyone who tries to cleverly get Dan to "show his hand" is just more grist for his mill.
Here's another way to think of it. Winning an individual military battle is a matter of getting there fastest with the mostest. Winning the negotiation battle often occurs the same way. If you are the first to put a treaty proposal or battle plan on the table, you are the odds-on favorite to get that plan accepted by your negotiating counterpart.
Maybe this is different in other parts of the world, but in Germany I have never ever been able to do nr 3. Employers over here never set the anchor for negotiating.
At least thats my impression. Prove me wrong and tell me how you were able to do it.
Negotiating with the help of other workers (also known as collectively bargaining) also works and works much better in most cases than a single person.
Comments
As a founder, and therefore Mr Cost Control, I hope you never, ever read http://valerieaurora.org/howto_salary/. :)
Here's Val Aurora's "short version", but you should really read the whole thing;
1. Negotiate! It will almost never hurt you, and almost always help. Screw up your courage and just do it!
2. Do your research - know what you are worth. Ask for advice from knowledgeable, well-compensated people with more skill and experience than you.
3. Never ever give the first figure for salary - make the person hiring say a number first, even if they ask, repeatedly. Never ever ever! If there's a form, don't fill in the "Salary" blanks. Just don't do it.
4. Always act slightly disappointed, no matter what the job offer is. Ask for time to think about it (i.e., plan your strategy) before getting back to them.
It's great if the other party gives a number first, but this binary, on-of-us-has-to-be-a-looser game can be a pain in the ass. Have a fall-back strategy, like giving a high number first, or even better, simply be very pragmatic, i.e. know what you're worth (or want), say that number first and don't ever budge. When pressed, point out that you understand it's bad negotiating strategy to give a number first, but you're not playing games here, you being very straight up.
Ditto. It also doesn't hurt to come off as sincere.
If I like you, I'll push to get you. Simple as that. I'd like the best deal, but at the end of the day I'll do my best, and I'll let you know how far I can go. At that point the ball is in your court to turn me down.
But don't start talking about your worth. That just comes off as cocky, and generally speaking, I've got a pretty good idea what the position is worth to me.
It's a fine line of course. I wouldn't recommend kissing up. I'm just suggesting that there's ways to communicate your value without giving the impression that you're going to be a thorn in my side and not worth the trouble.
If you ever give a salary range they will only look at the low end. So if you think 50 is fair do not say 40-60. Your offer will be for 40.
What's the best strategy to get the other party to put out a salary figure first?
It comes down to the type of person you are dealing with really but the most pragmatic approach would be to indicate that you feel you deserve an increase but are stuggling to quantify how much as your perception of your worth to the company won't be as accurate as theirs. At that point ask them to suggest a figure. Give them the opportunity to take time away from the discussion to think about it.
The only negative about putting the ball in their court is that it gives them control of the negotiation as they can easily come back with an extremely low figure stating that they have discussed all of the options with the appropriate personel and the quoted figure is their absolute maximum allowable increase, leaving you with zero scope to stretch it.
The original article is more focussed on "I've just got a new job", where there isn't your current salary as a peg. It's going to be a lot harder to negotiate given that.
What you have to do is somehow reframe the conversation in terms of what it'd cost to hire - and train - someone to replace you. This only works if you really are essential, of course.
Don't give a salary figure in the first place ;-)
this is not always possible. most ask for and press to know your current salary
Why do they assume the compensation you tell them is the true amount you received?
Lie.
Bang! they just lost the negotiating game.
There is no honor amongst theives, and I might be an idealist, but as long as money exists in the world, we're all thieves in our own small ways.
I wish whoever downmodded this had instead explained what they disliked about it.
The "we're all thieves" bit I guess (the downmodder wasn't me).
Anyway, it's wrong: your new employer has to know your previous salary so they can calculate your tax correctly. If you lie about it, you will get caught. Lying in an interview/on a CV == instant dismissal.
now, I am not advocating lying... but at least here in America, the employer has the employee fill out worksheets to figure tax deductions, then at the end of the year the employee evens up with the IRS. (if your calculations are off and you underpay by more than a certain amount, you have to pay penalties on top of paying the owed taxes, so the employee has an incentive to get it right.) In 15 years of working, I've never had an employer ask what I was getting before outside of salary negotiations, and I've been in situations where I owned my 'previous employer' so I'd know if they tried to contact the previous employer to verify income.
So while I think lying in general is a bad strategy, in part because you don't know when you'll get caught, I'm fairly certain that American employers won't catch you through their tax calculation process.
I think my terse reply emphasized the wrong point and was completely misunderstood. Sorry.
I am not saying to maliciously lie about being underpaid, nor about non-salary compensation to your new potential employer. What I am saying is that during the initial negotiating process, when they ask "how much did you make at your last job?", if you suspect they might try to low ball you or negotiate you down, then you can maintain the advantage by lying and telling some arbitrary higher amount. Although if this is happening to you, you probably might want to look else where for a job. Unfortunately the economic reality means that is not always possible—who hasn't accepted at least one job from an employer they would not ideally choose to work for?
This thread and my reply is about the well-known claim that in any salary negotiating process, who ever first lets slip a specific dollar amount loses the advantage in the entire process. My reply was simply to point out that the entire logic is premised on a flaw, namely that you, the job candidate, are the one telling the employer how much you used to make, and then naming that amount becomes equivalent to losing the advantage of "don't make the first move." Since in most cases your new employer has no way to even verify what your previous salary & compensation was, they are utterly reliant upon trusting that you are telling them the truth. I have no idea what later commentors were saying about telling your new employer what your previous taxes were. I have never heard of any employee being forced to share their tax info with future employers. (No doubt there are some professions and jobs where this happens, such as those elected to public office or serving the public interest.)
My point was this: in any negotiation process involving money it is a mistake to implicitly assume either party wants to be perfectly honest to their own disadvantage. If you look at any economic process like salary negotiation through the mathematical lens of Game Theory, you would never expect any "game player" to give away such an easy advantage.
Now I know this is going to offend many because it stabs the heart of the economics driving what we (falsely) believe is a strictly "ethical" matter, but please hear me out. I say we are all "small thieves" in our own context-dependent ways, because there really is no such thing as an objective "price." Rather, all prices are simply an arbitrary amount somebody is "willing & able" to pay. Any time you buy or sell, you first have to determine how much you can get from the other party. We are all skimming off the top of somebody else's profit margin, no matter how small.
No salary negotiation I've ever heard of followed this logic:
Recruiter: "how much did you make at your last job so we can trick you into making the first move and losing the advantage in this Game Theory-based negotiation?"
Candidate: "how much are you willing to pay?"
Even though in reality that is precisely what both sides are already trying to do. Size each other up and determine if both parties can agree to mutually benefit within their financial constraints. It's economics 101. But neither party will be honest and tell themselves nor the "opponent" that is what they are doing. And that's equivalent to lying—like Mark Twain said: "the worst lies are told in silence." And that is why I say we might as well throw out any ethical preconceptions and just look at it as a strictly game theoretic, economic process.
Since I don't even view this through the lens of ethics, I can playfully throw around the term "thieves" as a way of winking at the rules of the game itself. Who hasn't played cops & robbers and had fun pretending to be the robber?
To further see my point, think about the exact same situation, but inverted: if you, the candidate, were to ask anyone under the new potential employer: "how much did you make last year?", could you expect anyone to tell you? Or ask the CEO: "I might want to work for you, but how big was your bonus last year?" The conversation would come to a screeching halt right there.
In our era of Too Big to Fail, where the average CEOs makes hundreds of times the average salary of their lowest paid employee, why do so many of us "worker-bee" types have such a problem with turning the tables and fighting fire with fire? How do you think the CEO and the big guys got so big? How do you think the global Labor movement achieved so many gains on behalf of workers back in the 1920's? Why shouldn't employees be able to do the same today on a smaller scale? Fair is fair afterall.
That is all I'm saying. Stop voting down my insights just because I explained myself poorly and it sounded like something morally offensive to your biases. Where's the fun in having biases if we can't debate them on the Internet. :)
Recruiter: "how much did you make at your last job so we can trick you into making the first move and losing the advantage in this Game Theory-based negotiation?"
Candidate: "how much are you willing to pay?"
Isn't that how it pretty much works always? I mean, personally I'm pretty bad at negotiation. If it is something that really matters, I always need to get multiple bids. I mean, personally, I switch jobs fairly often, so I think that my old salary is usually pretty fair... saying "I am making X now, beat that" seems to work okay. I am leaving some money on the table, yeah; The thing is, as an employee, there really isn't that much room to negotiate most places. Especially larger companies have strict guidelines for pay for particular positions. Even at smaller places, the boss is very conscious of perceived 'fairness' - The boss might not like his employees talking about money, but he knows we do it anyhow. The idea is that paying one worker more than another without an externally visible reason can be damaging to the business above and beyond the extra cash expended.
The problem is that the employee is at a /massive/ disadvantage, even if she is a good negotiator. As an employee, you are applying for a job designed for people who are not primarily driven by money... and you are competing with other people who are also primarily not driven by money. If you apply for a full-time employee position, you are saying that you don't really care that much about maximizing your cash return on your time... that's not what full time jobs are for.
Listen to all this talk of 'work-life balance' - most jobs are not designed for people who want to retire at 30. most jobs are designed to be comfortable enough that you can do them most of your life. And really, that's what most people want.
It's easier to maximize cash as a contractor, 'cause people who value safety, stability and comfort leave contractor positions as soon as they can, leaving the field to the mercenary and the incompetent, so it's a place where a competent mercenary can thrive.
eh, I guess what I'm trying to say is that if you are an employee, you have already traded away money for comfort and stability. no matter what you think about the fairness of continuing to be honest in the face of what are essentially professional liars, for most of us, for various reasons, not having to lie is part of that comfort.
More cynically, many people here are not anonymous... Few few people, I imagine, are willing to publicly and non-anonymously advocate dishonesty.
I'm sorry, but where I come from it is assumed that people will pad their salaries. Most of the time I add something small like 10-20%.
The linked article goes into detail.
I disagree on 3. You should always start with your own proposal. Set the point from the discussion starts.
This is especially important for negotiations that are more complex than a real number.
To quote Paul D. Windsor, Esq., Laywer and Diplomacy Player (http://www.diplom.org/Zine/F1997R/Windsor/lawdip.html):
1. Always Start With Your Own Proposal
In my profession, this is known as "controlling the document." It is often true that he who controls the document controls the deal. Psychologically, if the negotiation begins with with your proposals, it's likely to proceed from your perspective and not the other guy's. The end result is much more likely to be in your favor under such circumstances. Most people in the real world are too lazy to draft their own contracts and, if they do, often do a poor job. Always be the first to present the contract. By doing so, you are taking the initiative in setting the terms of the deal for the remainder of the negotiations.
In the few [play by email] games [of Diplomacy] I've played so far, the majority of players I've negotiated with have tended to open negotiations after every turn something like this: "Hey, that last turn went well/OK/bad for our alliance. Where do you want to go from here?" I believe most players who do this think they are trying to force the other player to "show his hand," but I don't see what that accomplishes. In my view, opening a negotiation in this fashion is a huge mistake. It concedes all of the negotiation momentum to the other party and gives him a chance to write the draft contract which will form the basis for the remainder of the negotiaion. It seems a lot of leverage to give up in order to go on a fishing expedition for information that is not likely to be terribly useful.
You don't have to take my word for it. Read the [end of game comments] in Dan Shoam's games which are published regularly in this 'Zine. Notice how Dan tends to dominate the diplomatic front in his games almost by sheer volume alone. It is not that he merely sends lots of press. He also makes all of the proposals. The other players in his games invariably play by responding to his ideas, rather than generating plans of their own. Dan seizes the negotiating momentum early and never lets go. His is the best application of lawer-like Diplomacy that I've seen. Anyone who tries to cleverly get Dan to "show his hand" is just more grist for his mill.
Here's another way to think of it. Winning an individual military battle is a matter of getting there fastest with the mostest. Winning the negotiation battle often occurs the same way. If you are the first to put a treaty proposal or battle plan on the table, you are the odds-on favorite to get that plan accepted by your negotiating counterpart.
Maybe this is different in other parts of the world, but in Germany I have never ever been able to do nr 3. Employers over here never set the anchor for negotiating.
At least thats my impression. Prove me wrong and tell me how you were able to do it.
Negotiating with the help of other workers (also known as collectively bargaining) also works and works much better in most cases than a single person.