Compensation is perceived value, how to negotiate.

When should you negotiate for an increase in compensation? When you just completed a major project that generated new revenue for the company, you were able to gain economic efficiencies by merging administrative support and cut your costs by 10%, or you identified, initiated, and directed a new line of business for the organization.

Let’s start with IF YOU deserve a raise. Everybody thinks they do, maybe you don’t. What’s the criterion? I may not give you a raise, I'm a tough boss. I've run five companies. Some big. Some small. So let's start with what are the most important issues in determining whether you deserve a raise.

What do you bring to the party today and everyday?
What are you doing for Mr. Boss?
How are you making Mr. Boss look good?
How are you making Mr. Boss's life easier?
What accolades is Mr. Boss receiving about you?
How do you demonstrate initiative?
What are you doing for your organization that is making it better?
How do you make Mr. Boss stand out from his competition? What? Yes, Mr. Boss has competition, it's his peers. So you better be making Mr. Boss a star or you aren't doing your job.
What has your ROI been the last 3 months, 6 months or year? Don't know? Find out.

If you aren’t doing any of the above, you don’t deserve a raise. So go back to your office and do something about it, contribute to the bottom line in some way, or figure out how to make Mr. Boss look good because that's why he hired you.

Now, if you actually accomplish the above nine points, then you deserve more money. Know your worth.

Presentation and leverage are the key to negotiating more money. The word conjures images of success, importance and wealth. Unfortunately, people frequently confuse the relationship between work and money. Money is payment for a product or service rendered right? However, here’s the anomaly. Compensation is NOT based on a product or service rendered. To the contrary, compensation is based on perceived value.

For example, what makes Michael Jordan worth more than Kobe Bryant? Or Bryant more than Alan Iverson? Perception is reality. It’s the exact same in business. So the question is what’s the perception about you?

Money is a scorecard and based on perceived value---not results. What is the single most important issue when addressing negotiating compensation?

Level the playing field.

Negotiating is not an easy thing to do. Reality is that both parties have to feel like they have won something. And negotiating is something you have to learn how to do. You need facts, you need preparation, and you need analysis. But what else do you need? How to listen and how to hear.

What do I mean? Listen for what isn't being said. You ask a question, but are you listening for what Mr. Boss isn't saying. Are you listening for the intention behind his words? He says,

"Gees, I'd love to talk to you about this now, but I'm rushing into a meeting."

What's he saying?

I have other things on my mind right now and this isn't important to me.

You are important, do me a favor and come back at another time.

I'm walking into my boss's office and I'm going under fire.

Are you joking? You haven't pulled you weight here for six months.

So what do you do? Why don't you find out how you're doing? How does Mr. Boss perceive your talents and performance? Why not put forth some facts and see if he agrees with facts that cannot be disputed? Then anticipate every conceivable objection prior to ever walking into his office---it will demonstrate your initiative, preparedness and strategic thinking skills. Any high level discussion, which entails a significant amount of money, should generally cover more than one meeting. So prior to your first meeting, write out answers to the questions and possible objections.

Why do I want more money?
Why are the reasons I deserve more money (must be from a non-personal, objective perspective)
What are my competitors making?
Why do I deserve more money?

From a numbers perspective, how have I added to our profitability? Our bottom line? How have I increased revenues, decreased costs, increased brand awareness, or increased market share, etc.

A good argument is not enough to win someone over. What motivates your boss? What makes him tick? Is he motivated by recognition? ROI? Profitability? Distribution? Marketing? Competing against his internal peers? How does your boss listen and how does he learn? If you aren't listening to how he listens, you aren't communicating to him effectively.

Listening

Effective listening requires more than hearing the words transmitted. Effective listening means you are present to hear the speakers “intention” not your own “interpretation”. This is where communication between people disconnects. Remember someone’s intention is not communicated—it is your interpretation of his or her words. You need to listen for their intention, which is communicated by not only the words they choose, their non-verbal language and their body language.

Obviously, you can’t listen intelligently while you are talking, so be sensitive to your own “thoughts and words in your head”. Stop any conversation that is going on in your head---or your “inner dialogue. This is the ongoing conversation in your head.

Time and place

Timing is everything. Business often considered war or a game of strategy, such as chess. Therefore, planning your strategy or the attack is crucial in victory. Try to get him on the same side of the desk as you are or at a table. You do not want a desk between the two of you. It is a psychological warfare tactic.

The Deal

When negotiating, the single most important detail to remember is everyone has to give something up. Remember the other side needs to feel like they won too. If the other side gives nothing up, then they lost and you won. How can any one feel they have negotiated a great deal if they conceded everything?

There is no victory if everybody doesn’t give something up! There is no “win”. What charges our adrenaline? Winning the game, the thrill of victory, knowing you gave it your all. See this from a gamesmanship perspective. Make sure that your boss has an opportunity to win in the negotiation, or you lose.

Since you now know you must give something up, then you understand that it is inherent in structuring a deal that you ask for more than what you want. If not, you created then you have not created a win-win.

Attitude

Your attitude is power. Your attitude should be you love this job. If you don’t, you need a new job. But, in the negotiating arena, you need to be able to demonstrate more of a c′est live′ attitude.

I’ll never forget one of my employees resigning. And I congratulated her on her new job. A day later she walked into my office and said, “I don’t want this other job. I just wanted a counter offer.” Big mistake. I don’t do counters. My advice is don't ever use that strategy with anyone.

Time

Some people think of negotiation as though it were a transaction----with a beginning and end. Think kids. That's a negotiation. Compensation is the same thing. If you don't have kids, go spend time with someone's kids. You'll understand negotiation in time.

Your meeting starts at 10:00 a.m. If you expect your meeting to be over at 11:00 with your raise in hand, that's a recipe for disaster thinking.

Pretend it’s your company. It’s real easy to say that you deserve the money. But how much time would it take you to think about spending that same amount of money? Give your boss and the process the same respect. Overnight decisions in this arena generally don’t happen

No doesn’t necessarily mean no, it just means not now. Go back tomorrow, or the next day, or next week. Do not give up! You need a good reason to give up and timing may be one of the reasons no means not now. So no doesn’t mean no, it just means not now.

Gender Related Negotiating Issues

Frequently women respond to the “discussion about money” as either a repulsive subject. They feel it's inappropriate to discuss money. And are generally more compliant in accepting their positions. They feel grateful that someone has given them the chance or the opportunity to prove themselves. Alternatively, men negotiate everything, down to relocation expenses, their cell phone, sign-on bonuses, contingent plans, management changes, etc. Ladies, pay attention, you only hurt yourself. This is a business transaction.

Unless a woman actively and purposefully pursues mastery in understanding the significant business differences between genders, they have difficulty translating their business success into economic parity. Women need to pursue educating themselves in basic business areas such as: negotiating techniques, leveraging success, re-framing her thoughts and actions as a teenager to adult woman.

Women do not understand the basic realities of how to achieve parity in economic terms. When discussion of money comes up---frequently they may listen, but will still say or do whatever it is that they think needs to be done. They are not open to advice, and are competitive from an unhealthy perspective.

The Most Important Rule

Get it in writing. Get it into your personnel file. Make a copy of everything. If you don't have it, it never existed. Management changes. Its life. Get it in hard copy with a signature. Everything needs to be in writing or it never existed. Prepare for everything as if you are going into a court of law.

Make sure you develop objective measurable results relative to your current and future roles. Don't walk out of current and future negotiations without them. "We don't do that here," is code for "I don't want to be held accountable for the discussion we just had." There may be times the other party doesn't make a commitment and for good reason. They may be "trying" you on to see whether or not they want to keep you .

Then again, you may be an underpaid star---know your worth!