Winning the salary game

By JULIE MIDDLETON

First, negotiate with yourself.


Get introspective. What are your priorities and goals? Short-term or long-term security? Flexible hours? Regular sabbaticals?

Failure to nut out priorities when decisions have to be made can lead to "cognitive dissonance," says United States sports negotiator Leigh Steinberg, the agent who inspired the film Jerry Maguire, in an interview with American business magazine Fast Company.

He says: "You'll feel increasingly torn between mutually exclusive alternatives, and you'll become more and more confused.

"The confusion leads to stress, and since the human psyche can withstand only so much stress, you'll be tempted to make a decision, even if it's the wrong decision, just to relieve that stress."

Horner and Partners consultant Peter Harbidge says: "If you want ongoing job satisfaction, you should be focused on cultural fit, a supply of challenges, promotions and training opportunities, a values match.

"The dollars are part of it, but there are other, more important things to take into consideration."

Then move from your values to your value.


What are your unique skills and talents? What are colleagues in similar positions getting? What are your benefit and income goals, and what trade-offs are you willing to make?

Do your homework and ask questions of contacts, industry bodies, friendly recruitment companies, relevant salary surveys and contacts.

Check your sparring partner.


What will the structure of the interview be? How much authority will the interviewer have?

What is that person's track record? What are their negotiating tendencies? Or will it be a panel?

Mine contacts for detail. Find out the interviewer's agenda, and understand it. What represents a successful result for him or her?

Negotiations are like chess games.


That is, they are a series of moves heading for one comprehensive result, says Rogen New Zealand negotiation expert Sandy Hollis - but New Zealand executives tend to overlook that.

"They tend to plan the negotiations as a whole, rather than a whole list of individual issues.

"They need to list as many issues as they can, and make sure they know what position to take in each of those things. What is the range of options on each?"

How do you want to be compensated for your work?


The big change in executive pay is the increasing amounts put at risk and tied to performance.

"If a company doesn't want, or can't afford, to go higher on fixed remuneration, the employee can try to negotiate a higher portion of the package at risk," says remuneration expert Kira Schaffler.

"The dollar value and the percentage value [employers are willing to grant] is increasing every six months."

But performance-based pay systems must offer challenging but achievable targets, and be based on measurable factors which can be influenced by an employee's work.

Targets set unrealistically high, or kyboshed by things the executive can't control, are soul-destroying - so if you can find out details in advance of how a company's performance-based system works, you've got an extra negotiating tool. Otherwise, ask about it.

Another growing trend, mainly to streamline administration costs, is movement from cash-plus-benefits packages to all-cashed-up packages, says Schaffler: "The exec can elect how to make that up."

And in a talent-short market, she says, companies are often willing to be flexible.

But that requires homework: how much is each benefit worth to you?

Rosemary Foxcroft, of career management consultancy DBM Australia, suggests making up a list of all the benefits that would contribute to your ideal job.

That list might include the more obvious: company car, medical insurance, company-supported superannuation, or provision for severance payments.

To that list you can add shares - a common part of overseas packages. But as consultant Stephen Mockett points out, New Zealand's sluggish stock market makes that sort of stake less attractive.

Only 2.7 per cent of top performers in New Zealand received an issue of shares in the 12 months to March, according to Cubiks' twice-yearly Top Executive Report.

Cubiks' report also offers useful calculations on how to convert a benefit such as a car to a cash value.

For example, someone on $65,000 driving a Nissan Maxima SL would need to be offered an extra $28,308 to give it up but be no worse off.

But that's possibly a better deal to a company, says Cubiks, as the annual costs of running such a vehicle come to $25,002 - and that's without the other hassles of car ownership.

However, Foxcroft suggests a big list of other benefits executives should also consider - car servicing, education funding, discounts on company products, study leave, extra holidays, flexible working hours, home office equipment and home office maintenance, travel vouchers or hotel accommodation, loans or mortgages, matching charitable donations, better office size and location, professional memberships, spouse travel, support staff, payment of frequent flyer/private lounge fees, childcare, company credit card, compensation time for travel, financial planning assistance, office decor/art, salary review schedule, in-office reference material, luggage for travel, magazine subscriptions and travel insurance.

Map your range, then map their range. But be realistic, says Harbidge.


"A lot of executives at the upper level expect to make the same or more money [in a new job].

""They forget that what they are being paid for is a reflection of their value to their current organisation."

Employers need to consider existing internal relativities at the company they are eyeing, as well as prevailing market rates.

And they also need to factor in the cost to employers of things such as fringe benefit taxes - effectively 33 per cent for perks such as private use of company cars - and the cost to employers of contributions to medical insurance and super funds.

Also list strengths and weaknesses for both parties, says Hollis, so you can get leverage.

In a talent-short market, of course, the career manager has a distinct advantage.

Don't negotiate with a stranger. You need to build rapport as soon as you can. You'll feel less on edge and will consequently perform better.


Look for "cooperative opportunities", says Hollis - positive moments where you can build on mutual respect.

Be confident, courteous, calm and curious.


"Emotion will always be there," says Hollis. But keep emotion at bay. Don't take anything personally - this is business.

Reinforce points of agreement - it will enhance the mood of mutual compatibility.

Don't show your cards until you have to. "If the organisation knows what salary you're already on, it weakens your negotiation position," says career consultant Graeme Duhs, of Right D&A.


And don't ever take the first offer, he says. That's when negotiations should start, not conclude. Women who suffer from "imposter syndrome", take note.

But it is imperative to have pre-planned a response to that first offer, along the lines of: "That's great, but it's below fair market value."

Make positive noises but no firm decision, and go away and think about it - then it is clear, says Duhs, that you are interested and serious, but no walkover.

Dealing with a deadlock.


"Don't get into an argument, get critical or blame yourself," says Hollis. "A deadlock comes because people are coming at it from different perspectives - they don't understand each other's values and why."

A break is required: "I'm a great believer in taking time out," she says.

Whether that break is a trip to the bathroom or several days away, have a return time fixed before you leave - and consider changing the venue.