The pre-negotiation stage is the period before you have made a sale. Up to this point you have deferred all talk of compensation. But the interview is going well and it is time to approach the subject your objective is to give salary guidance to your PE while avoiding direct questions or discussions of salary.
The best approach is an indirect one. For example, you can describe an experience you had with your company car. This will alert the PE to the fact that you expect a company car or equal compensation. Or you can tell a story about a subordinate and mention his salary. The salary level you assign to your subordinate will give the PE an idea of what salary you expect Say anything you want in the way of a subtle hint, but do not come out and state your compensation requirements.
The key to success in the interview, or in any dialogue with the PE, is to listen. By listening carefully you will know when you are about to get an offer. The PE will begin to sell the job to you. He will describe the advantages of the job, the company, working conditions, or recreational opportunities. The crucial moment is when the PE begins to describe fringe benefits. This is one reason that you should not bring up fringe benefits yourself. If you allow your PE to do it, you will know that you have made a sale and will gain a psychological advantage in negotiation.
How to Avoid Negotiating from Your Old Salary
In many human endeavors there are guiding principles of success that must be observed. In salary negotiations there is such a principle. It can be stated simply: you are trying to negotiate a significant increase in salary, do not make your present or previous salary the basis of negotiations.
If you are already making a satisfactory salary, you may be seeking a superior job for another reason for example, to improve your opportunity for advancement or to get out of an impossible political situation. In this case, you may want to reveal your previous salary and negotiate from there.
If you are after a significant salary increase, there is an important fact that you must know. Most American companies will try to use your previous salary as a starting point for negotiations and will try to limit increases to 10 to 15 percent of your previous salary. Yes, even though this policy is obviously shortsighted, the average PE wants to get a bargain. A bargain to him is as close to your previous salary as possible, assuming your previous salary is not high and he has no other guidelines.
To avoid negotiating from your old salary, you must give your PE some other basis for negotiations. One good basis is what the job is actually worth to other companies. Before going into the interview, you should obtain accurate salary information about the job, taking into account industry, function, title, geographical location, and size of company. As discussed in Chapter 17, you can obtain this information from friends, headhunters, the AMA's compensation service, and colleges or universities. Sometimes professional societies can help you out. Try to get a good idea of exactly what you are worth so you do not inadvertently price yourself out of the market and so you can speak with authority when discussing salary with a PE. Prepare your research carefully before you begin overt negotiations.
You have been alerted that an offer is about to be made. Now the PE will probably ask you, "What is your present salary level?" or "How much were they paying you at the XYZ Company?" or perhaps "What compensation do you require?" You should preface your answer by telling the PE that you researched compensation for the job, size of company, and geographical area before the interview. Then your pitch might go like this: "The Engineers Association 1983 Survey shows a salary range from $35,000 to $43,000 per year, with a median figure of $40,000 per year. I believe I am exceptional, or you wouldn't want to hire me in the first place. Therefore, I think that $X to $Y is a fair range. Agreed?" The X and Y, of course, are top and bottom of the salary range you have decided on.
Another basis for negotiation available to every job hunter is the mythical offer. It can be used either by itself or in conjunction with your researched salary figures. If a PE asks you your present salary or desired compensation, say, "Well, I already have an offer at $X." If the PE balks at the range determined by your research, you can come through with the statement about your salary research. As long as you haven't priced yourself out of the market, the PE will begin to negotiate with you.
