Salary Negotiations

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Facts

* This negotiation was an important one from a career point of view as it involves a salary negotiation for an existing job. I have never been in a situation where I have actually negotiated a salary for a person working under me, so it was a good experience for me. I was playing the role of Pat Lynch, V.P. of marketing for Rapid Leatherhead Goods Company. There are 4 main product lines which comprise the major portion of the company’s online sales. A new director for marketing was hired two years ago for mail order sales. He has done a good job with three lines, but the fourth line, which was a problem even before he joined, is still a problem and there has not been an increase in sales for that product. It is the company’s premier brand and it is important for the company’s image that the sales increase for that line. This is the time of year for salary adjustments and I feel a salary hike of $4,000 (6 2/3%) is good for his efforts. I was surprised when he asked for a 20% increase in salary as I thought that was excessive, but then he showed me the new sales figures which I did not have. We negotiated over the figures and thought of a way to negotiate the salary. He was quite forceful about taking other figures into account and to determine the salary based on all criteria. I was adamant to take Top Flite, the aforementioned fourth product line, into account as it was the main objective. I thought of ways to satisfy us both.

Tools/concepts/models

* Foundation – To begin negotiations, I was the first to speak and started with praising him for the good job he had done with the three lines. I started by sharing the figures which I had, and told him that the increase in percentages compared to last year’s sales figures were commendable. Then I told him that Top Flite was still a problem as there was not much of an increase seen in this line. I wanted to know his reaction to that and how things could work out in the company’s favor. I was quite surprised when he showed his reluctance and utter disbelief in what I said, since he believed that Top Flite was also doing well and the increase in percentage sales was pretty big even for this line. I then realized there were some numbers which I did not have and needed to listen to him to know the true facts about Top Flite’s growth.

* Separate the people from the problem: After our first 5 minutes of discussion, it was very important that I separated the person from the problem. I asked him the reason why he felt that the increment I was giving was not up to mark, and what his justification for getting a better increase was. I listened to my counterpart and realized that he has worked really hard and had surpassed company expectations in the other three product lines, and it was important that these accomplishments were considered when determining an increase. I decided to budge on this issue and told him that we would find a middle ground so that the requirements of both the parties are met. It was in my interest that the sales of Top Flite should increase. I wanted to be very sure that I could justify any increment that I gave him which was above my already decided increment percentage, and at the same time make sure that I acknowledge his achievements in the other lines.

* Focus on interests not positions: Focusing on interests was an important tool for this negotiation. I asked him why he felt he deserved a better hike than the one I was giving him. He then talked about how they had introduced a new strategy in the market to increase the sales figure of Top Flite. They had started sending out offers to a new list of people whom they thought were more interested in buying the company’s product. Hence this helped in saving money by not sending out pamphlets to people who would not be interested in buying the product. They offered money back guarantees if the customers were not happy with the product, this way customer satisfaction was increased...
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