Are you earning what you're worth? Master negotiator Roger Dawson shows you how to get a better deal from your current employer and how to negotiate the best deal from a new employer. And you won't come off as greedy, overly aggressive, or selfish. In fact, you'll learn how to win salary negotiations and still leave your boss feeling like he or she has actually won! You'll also learn how to become more valuable to your employer or prospective employer, how to develop power and control over your career, and gain an amazing ability to get what you want.
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You probably invested in this book for one of three reasons:
Youâd like to talk your present employer into paying you more.
You are up for a promotion and will be negotiating your compensation package.
Youâre applying for a new job and want to cut the best deal you can.
Iâm going to teach you a lot of negotiating tactics that will help you negotiate the best deal, but first letâs look at the big picture. What makes you valuable to an employer? What positions you to get the best deal?
Chapter 34
Power Comes From Having Options
Hereâs Rule Number One in any negotiation:
Your power is in direct relationship to the options that you have versus the options that the other side has.
At Harvard University they call it BATNA: Best Alternative to a Negotiated Agreement. The side that has the best BATNA has the power in a negotiation. Letâs apply that very sound principle to your relationship with an employer.
Your Value Is Directly Related to the Difficulty of Replacing You
Iâve been applying that rule for most of my life, ever since I started my first business as a resort hotel photographer when I was only 16. Iâve never come across an exception to the rule. It always applied when I was a personnel director at a large department store and was hiring people every day. It always applied when I was president of a large real estate company in Southern California with 28 offices, 540 sales associates, and a headquarters staff of 50 people. And it still applies today.
Do you ever wonder about the people who collect tolls on bridges and freeways? Donât they realize that on any given day they could show up for work and their cozy little tollbooth would have been torn out and replaced with a mechanical transponder?
What about the people who check you out at the grocery store or the hardware superstore? Donât they understand that they are being replaced every day by self-service checkouts? And that the customers donât miss them?
Check into a big casino hotel in Las Vegas these days. You donât get to talk to a desk clerk. You walk over to a screen and identify yourself by inserting your credit card. The machine assigns you a room and asks you how many keys you want. It instructs you to take blanks out of a box and insert them into the slot to make your key for you. You donât talk to anyone. Thatâs the way itâs done in all the mid-level mammoth hotels. Itâs even an option in the luxury hotels such as the Venetian. And a lot of guests prefer it to lining up to talk to a person.
So how can you use this principle to increase your value to your employer and improve your negotiating situation? Hereâs the answer:
Do One Part of Your Job so Well That You Become Irreplaceable
You reduce the options that your employer has by doing one part of your job so well that you become irreplaceable. It doesnât have to be everything you do on your job, just one part of it. Do one part so well that they wouldnât know where to find a replacement. For example:
Be the physician in the emergency ward who never gets flustered, however great the pressure.
Be the police officer who has an uncanny ability to calm down angry people.
Be the schoolteacher who can make math sound exciting to even the most reluctant pupil.
Be the business manager who has an exceptional ability to spot new trends.
Be the receptionist with an amazing ability to handle complaining customers.
When the executive committee meets to discuss your raise or promotion, you want them saying, âHeâs not perfect in everything he does, but when it comes to __________, thereâs nobody who can do a better job. I donât know where weâd ever find a replacement.â
Remember that your power as a negotiator is in direct relationship to the options that you have versus the options that your boss has. You want to remove the options that your employer has by doing one part of your job so well that you donât think he or she would ever find a replacement.
On the other side of the coin, you want to use this principle to increase your power. How do you increase your power in a salary negotiation? You do it by developing options before you go into the negotiation.
It amazes me how many people will go into a salary negotiation, but they havenât thought through what they are going to do if the boss says no to their request for more money. If only they would think it through a little. If they would say to themselves, âWhat would I do if I wasnât working here? What options are available to me?â
Even better, make a few phone calls and line up a few options. Then youâre started to develop real power.
It doesnât mean that youâll charge into your boss and say, âGive me what I want or Iâm out of here!â It does mean that youâll be a more powerful negotiator because youâll be sitting there thinking, âI hope theyâll offer me a good deal, but if they donât, Iâve got these other options that look good to me.â
If you want to have ultimate power in a salary negotiation, make the options better than what youâre negotiating for. Now youâre sitting there thinking, âIâll stay out of a sense of loyalty but I hope that they say no because I really want to go start my own business (or join the Peace Corp, or become a professional golfer).
Your power in a salary negotiation is in direct relationship to the alternatives that you haveâversus the alternatives they have. Iâm not suggesting that you threaten to quit if you donât get an increase in pay. But to identify which side has the power, you might want to take a piece of paper and draw a line down the middle. On the left hand side of the line, write your alternatives in the event they donât give you what you want. How many other companies are out there that would give you as good an opportunity or better?
On the other side of the line draw a list of their alternatives in the event that you quit over this issue. How easy would it be for them to replace you? In this way you can establish how much power you have in a negotiation.
The third principle thatâs important here is the principle of being prepared to walk away. Itâs the number-one pressure point in any negotiation.
A pitcher for the Los Angeles Dodgers was once offered $4 million for a three-year contract. He asked for $8 million and he got $7.9 million. That roughly equates to throwing the ball and sticking $500 in your pocket. Throw it again, and stick another $500 in your pocket. What a country!
How did he get just about everything he wanted? He projected that he was prepared to walk away. Now, he didnât go to the management of the team and say, âLook, if you donât give me what I want Iâm out of here.â Many people negotiate that way, but itâs very confrontational and it creates more problems than are necessary. He was subtle enough to be talking to reporters, saying to them, âLook, donât assume that Iâll be back with the Dodgers next year. My contract is up for renewal, and Iâve had a really good offer from the Japanese. I may go play in Japan for a couple of years.â He wasnât going to go play in Japan; he wasnât going to leave the Dodgers, but what a brilliant opening negotiating position! âNo problem, Iâve got all kinds of alternatives.â
Donât do this if youâre in a weak position with your company. If you are in a strong position, though, it probably would help you to plant a few rumors in the department. Take the biggest gossip in the company to lunch and swear him to secrecy. Lean over and say, âCan I trust you to keep a secret?â The only reason youâve sprung for lunch is knowing perfectly well that you canât trust him to keep a secret, but heâs going to respond, âYes, of course you can; you know me.â Now heâs drooling to hear what you have to say. âDonât mention a word of this, but I may not be here much longer. Iâve had a terrific offer from a competitor and Iâm seriously considering it.â If youâve picked the right person, the entire office will be talking about it tomorrow, and by the afternoon your boss will be wanting to have a chat with you to assure you of your great future with the company.
So far, Iâve covered three basic negotiating principles that come into play in this situation:
Recognize that your power in the negotiation is your relationship to the alternatives that each side has.
Reduce the employerâs options by doing one part of your job so well that they wouldnât know where to find a replacement.
Realize that the most important pressure point is this: Which side is prepared to walk away from the negotiations if they canât get what they want?
Key Points to Consider:
Your power in a negotiation comes from convincing the employer that you have options.
Your value to your employer is directly related to the difficulty of replacing you.
Do one part of your job so well that you become irreplaceable.
Chapter 35
The Magic of the Trade-Off
If you want to justify your big increase in pay, youâd better be prepared to show your company what itâs going to get for the money. Long gone are the days when an employee asks a boss for a raise in pay because he or she is going to get married or going to have a baby. Todayâs bosses are fighting for survival. Theyâre going head to head with the toughest international competition that theyâve ever known. They are not going to give you a raise in pay because they like you or because you need the extra money. And cost-of-living increases are miniscule!
In negotiating we say that there is magic in the power of trading off. Children know it instinctively. Your 6-year-old says, âI fixed your computer for you, Mom. Do you want to go to the movies tonight?â Your 10-year-old says, âI washed your car for you, Dad. Can we go to Chuck E. Cheeseâs tonight?â Children know that itâs a lot easier to get somebody to do something if you offer something in return.
Look how much trouble unions have getting employers to make concessions when they donât offer anything in return. The supermarket clerks union, which is the United Food and Commercial Workers union, went on strike in Southe...
