Tuesday, April 28, 2009

How to Negotiate Salary with Your Boss?

The toughest negotiators will hesitate, when they need to negotiate the salary with their boss. Why? Because negotiation has always two goals simultaneously: 1) achieving your negotiating target and 2) keep the negotiation partner fairly happy. Have you ever tried to negotiate your salary increase with your boss? It is tough. But there is a way to make it easier. Here is how.

1) Increase your negotiation power

Prepare your negotiation long before it happened. Build your negotiation power during this time period. There are four different type of negotiation power.

Relationship power
If you have bad relationship with your boss, don’t even think to negotiate. The best way is to leave him as soon as possible. Find a boss who appreciates your talents and your contributions. Try to build as good relation as possible with him by communicating frequently, by finding ways to be more useful to him, by being a positive and likeable person, so that your boss enjoys your presence.

Performance power
Get things done and get things done quickly with high quality. Do everything possible to exceed your annual goals. Do not just stop when you hit your goal. Set new goals, but communicate this with your boss often. He might not know what you are doing exactly.

Knowledge power
Get the knowledge from human resource department about the salary band for your position. Get the benchmarking from the market. Understand the process exactly of the salary increase from human resource department. Understand the average and the maximum of the salary increase. Not all the information is available to you. But please try to get as much information as possible.

Argumentation power
Prepare arguments why you should get salary increase. Articulate your value to the company is far greater than the average. Articulate that you are underpaid compared to the market and compare internally.

2) Ask for what you want

Some people enter into the office of their boss just to ask a salary increase. This is not enough. You have to ask the salary increase of x % or y € per month. And tell the boss your reason for asking exactly that amount.

3) Develop well your options

I believe here is the key for success. Always start a negotiation with an option in your bag, an alternative offer or other career possibilities. The option should be real, which means you really would consider the option, if your negotiation fails. But there is no need to mention it during the negotiation. If you decide to take the option, just take it. Do not use it as threat. No one likes that. To have an option is the way to build your confidence and inner strengths in your negotiation process.

Do not start any negotiation, if you did not prepare a walk away position.

5) Focus on the benefits for your boss

Try to understand the benefits of your boss, when you are successful with your negotiation. The cardinal reason for the boss to increase your salary is to keep you motivated in the future, so you can perform at the same level or better. But there are other reasons such as fairness, willingness to support and develop others or building stronger employee relationship. Find out his red button you can push to make him move.

Last remark
during the economic down turn, negotiating salary with your boss may become obsolete. You might be happy to keep your job and to keep your current salary level. But this is an excellent time to start preparing to increase your negotiation power. It takes time, maybe one year. And hopefully the economy will start to grow again.


  1. HR: Human Resource; auf Deutsch: Personalabteilung.

  2. One thing to remember is that salary ranges are all very well, but the key to maximizing your compensation is about clearly demonstrating the benefits that you can bring to an organization. A well-documented performance which provides a prospective employer with quantitative results and shows him how you solved problems or accomplished tasks is pretty tough to argue with!