A QUICK REFRESHER OF MAIN POINTS:
There are 5 “Lightning Rounds” tucked in between chapter 1 and 2. They cover the Five Salary-Making Rules in a very condensed fashion. If you are in a rush, go to that condensation and come back here later to enjoy the full Negotiating Your Salary: How to Make $1000 a Minute.
Calculating the Dollars You Can Make, or Lose, in Those Sixty Seconds of Negotiations
We spend years thinking about what we’ll be when we grow up. We put thousands of dollars and hours into school to get a degree and then spend weeks on resumes, letters, and ads. We schlep from city to suburb to city, talking to jerks, jokes, and gentlemen about their job openings. We put hours of practice into a sales pitch, hours of research into understanding the company, and two or three nervous days into interviews, straining to beat out the competition. The most important part, the whole reason we started in the first place—getting paid—we often handle in sixty seconds or less!
For months afterwards, we roll up our sleeves and give our new job every ounce of brains and drive we can supply. But when it’s time for a raise, most of us just accept whatever we’re offered. How many minutes do we spend negotiating the money? Zero.
However, sixty seconds is all you’ll need to negotiate either a salary or a raise. You’ll learn in this book how to make those sixty seconds count. You’ll learn how to make thousands of dollars in that minute, and how to improve your whole sense of work and worth.
Consider for a moment how that adds up.
A modest-to-low annual lifetime wage, beginning at, say, $20,000 a year and ending at $80,000, averages out to be $45,000 a year. Over forty-five years, that totals 2,025,000! So even a simple 10-percent original raise that provides a larger base for all subsequent raises means an extra $202,500 over that time. You could buy a home with just a 10-percent raise!
That’s just the start. Proper negotiations can double your income. Mishandling negotiations can be a multi-million-dollar blunder.
And it’s easy to blunder. In my many years as a personal career- and salary-coach, I’ve seen people earning only half their value just because they never correctly asked for more. How would you handle these three situations?
Million-Dollar Blunders
Example 1: Mr. Eager Loses the Offer
Mr. Eager is bright, ambitious, and interested in working hard. He expects to be paid fairly and at the top of his range. His potential employer is looking at Eager’s record. The resume looks good and Eager has just the kind of experience the company could use and some solid examples of making things work right.
Desirous not to waste his time, Eager pops the question in the most tactful way he can. “Well, let’s see if we’re in the right ball park. I’m looking for a salary in the middle eighties.”
Mr. Employer figures the amount is okay, but is just a touch put off. He thinks Eager should primarily be interested in long-term work with the company. Eager’s approach makes it sound as if he’s more interested in the money. Well, that’s understandable, but Mr. Employer is also interviewing Mr. Dedicated for the job. Although he doesn’t know what Dedicated’s price range is, it certainly sounds as if he’s interested in the company. “After all,” Mr. Employer decides, “I built this company from the ground up in the last ten years. I want team players.”
“Well,” Mr. Employer tells Eager, “we might be able to meet that; let’s keep talking.”
Sounds promising but, when all is said and done, Mr. Employer picks Dedicated. “I want a company man,” Mr. Employer reasons, “and I’m willing to go to the middle sixties to get him. After all, Dedicated must be worth at least as much as Eager.” Eager loses the offer.
Example 2: Ms. Polite Loses $7,500 a Year
Ms. Polite knows that women make just over seventy-nine cents to a man’s dollar. She has corporate aspirations, though, and a solid background to build them on. Now that an M.B.A. has been added to the top of her resume, she’s got the technical education to back up her ambitions. But the job market is tough and competition amounts to survival of the fittest.
“We’re budgeted at $75,000 for this position, Polite,” says Mr. S. Tablishment, “and we really shouldn’t talk any further unless that figure fits your requirements.”
“Hmm,” Polite thinks, “not quite what I expected, but no use quibbling now; I want to stay in the running. I can’t reject it. Better give in here and negotiate later.”
“That seems fair,” she says. “Tell me more about the qualities you’re looking for.”
Thursday, Polite’s phone rings. “Mr. Tablishment calling.” He says his firm is offering her the job, but she should decide right away because he has to contact the other candidates.
“Oh my,” she thinks, “if I push now, I might lose the offer. Better say yes and negotiate a raise later based on my performance.”
On Friday Tablishment tells his comptroller, “Harry, I know we had $85,000 set aside for the new position, but you can put $10,000 of that into my travel-and-entertainment budget. I’ve found someone with real potential, and she’ll start at $75,000.”
So Polite loses an annual $10,000, and all the raises based on that.
Example 3: Mr. Hardwork Loses His Raise
Mr. Hardwork is hoping for a substantial raise this year. His accounts have perfect records and 10-percent-better profits than last year. Several customers have written to the company to say what a conscientious job he’s doing.
The raise is a week overdue, actually, because his boss has been discussing raises and overall compensation with the board since January. The grapevine has rumored that the raises will surface on Groundhog Day.
On February 9, Hardwork finds a note in his mailbox praising him for all his fine work the past year and acknowledging his wonderful contributions. It also informs him that he has been awarded a “very generous” 5-percent raise.
Hardwork feels cheated. Complaining bitterly of how unfair that is, he storms into his boss’s office saying he deserves at least 10 percent for his outstanding work.
“Gosh,” says the boss, “we’ve really gone over all the records thoroughly. The board personnel have looked at them and consulted industry standards. That’s the best we can do. But tell you what, I’ll talk one on one with the CEO and mention you specifically, and we’ll see what we can do.”
Hardwork never got that extra 5 percent, and he didn’t think to make it up by negotiating perks like vacation time, education, car, health-club membership, bonuses, and IRA contributions.
Hardwork lost half his raise. Don’t let that happen to you.
The Principle of Quality
Winning at salary and raise negotiations requires, first of all, understanding the principle of quality.
“Quality is remembered long after price is forgotten,” I was told by an accomplished salesman who was a client of mine. He reminded me that the many “bargains” I’d picked up in my life had worn out quickly, broken, or performed only after silent prayers or loud curses. I then remembered the times when I’d paid dearly for the “top of the line.” Almost every one of those tools, appliances, and articles of clothing is still with me. Each time I use or wear one of them I relish the craftsmanship and care, admire the fit and effectiveness, and appreciate the durability.
Compensation negotiating is about those kinds of purchases. It is about the joy and satisfaction you will bring to employers when they see their investment in quality—yours—compounded daily, easing their minds, and making more