By Hal Lancaster
From: The Wall Street Journal
Wesley D. Millican knew, by the numerous calls he was receiving from peers and headhunters, that there were many jobs available at higher pay than he was currently earning. But he liked his job as vice president of physician services for Physician Reliance Network, which manages medical practices. So, instead of entertaining offers, he decided earlier this year to ask for a raise.
Rare is the corporate manager who actually enjoys bracing his boss for a pay increase and rarer still is the manager who’s good at it. Most, dreading conflict, uncomfortable at tooting their own horn, or not wanting to be seen as money grubbers, take what the company offers.
That’s a big mistake that could cost you millions of dollars over the course of your career, says negotiations expert Robin Pinkley, an associate professor at Southern Methodist University’s business school and co-author of the soon-to-be-published “Turning Lead into Gold: The Expert Negotiator’s Guide to Negotiating Salary and Compensation.”
Having advised you in the past on ways to determine your market value, I thought it fair to help you take the next step, making the pitch for more money. I’ll use Mr. Millican’s experience as a beacon.
The Dallas manager plotted his campaign carefully. Not wanting to catch his boss by surprise, he requested a meeting, at the boss’s convenience, to discuss his compensation package. “People need time to research what the market is,” he says about giving his boss notice.
He wrote a proposal, including his research on comparable posts, the money he wanted and why he thought he deserved a raise. It allowed him to marshal his arguments and edit his thoughts before the meeting. Also, says career adviser Eva Wisnik, the memo provides your boss with something concrete to present to the other executives involved in the decision.
In the memo, Mr. Millican made it clear he wasn’t shopping around, a touchy topic in most raise negotiations. Many experts insist you should never mention outside offers. Even if it helps you get a raise, they contend, your bosses will never trust you again. It’s a risky strategy and should be used only if you’re willing to quit if your bluff is called.
Still, it is the ultimate leverage. Some companies, Ms. Pinkley points out, don’t respect you unless you’re getting outside offers. For those bosses who react negatively to such threats, you can still play the card by artfully conveying that you’ve chosen not to shop, even though you could. That way, Ms. Pinkley says, “you’ll get credit for loyalty from the company.”
Mr. Millican chose the high road, stressing how much he wanted to stay with the company. In raise negotiations, too many people adopt an “If-I-don’t-get-this-I’ll-leave approach,” he says, “Your intention shouldn’t be to make demands, but to make sure your compensation is up to market standards.” In the memo, Mr. Millican also provided detailed facts and figures about how he contributed company’s success, a must in raise negotiations. “I could show that I was more productive than comparable people in other organizations,” he says, basing the comparisons on his past experience and on current information about staffing in the industry.
What are good arguments for a raise? In this cost-conscious, performance-driven market, for instance, your financial needs are irrelevant. “Don’t ask for pity about your mortgage payment and the high rent of your boat slip,” advised Jack Chapman, a career counselor who coaches clients on salary negotiations.
The best argument for a raise these days is that you are below market value for your position, and you couldn’t be easily replaced, because of your expertise, the tight job market, or some combination of those factors.
Many companies, fortunately, fear losing managerial talent in this tight job market. Retention is all corporate human-resources executive Lee Miller hears about at meetings. “Five years ago, it was, ‘how do we control our costs,'” he says. “Now, people are very sensitive to the fact that you have to stay competitive, and other companies are trying to recruit away your talent.”
But companies also continue to cut back even as they’re growing, and often remain reluctant to offer sizable salary increases. To overcome any resistance, Mr. Millican listed future goals in his memo and offered to negotiate a decrease if he failed to deliver the value he promised. “It shows you’re truly committed to delivering that value and it’s not just about dollars,” he says.
Some final tips: Every company has its cultural idiosyncrasies, so interview veteran managers to learn how your company handles raises. Present specific salary targets; if you offer a range, your boss will generally choose the lower end of the range.
Know when to stop negotiating. If the boss won’t budge on salary, try for a bonus, stock options or added responsibility. “Money may come with added responsibility,” Mr. Miller says, “but even if it doesn’t, you’ve got something you can market to someone else for more money.”
Whatever you do, don’t end the talks on a sour note. Mr. Millican got a substantial raise, although not as much as he had requested. He decided it was more important that both sides walk away happy. Creating a good work environment after negotiations, he says, is “more important to your career in the long run.”