Maximize Your Salary Potential

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Negotiating a salary is never easy. In fact, it's something that makes many people downright petrified. However, negotiating a fair salary and benefits package right off the bat is even more important than you might think.

     

     Some job candidates simply take the first package a company offers, thinking higher pay will come once they have proven themselves. Beware of this tactic, says Ron Krannich, co-author of 'Dynamite Salary Negotiations,' (Impact Publications). "Unless you somehow become very indispensable to the organization -- the employer simply can't live without you -- and threaten to quit, the initial salary you get may determine what you will receive in the long run, regardless of how well you perform on the job," he writes.

     

     One important area to consider in your compensation package is how you will be rewarded each year for your performance, as well as how your salary will meet cost of living increases. While many people think these are the same thing, Krannich points out that there is a difference between a raise to cover inflation, and a raise for excellent performance. For example, receiving a typical 3 percent raise each year will generally just cover inflation, and allow the company to cover its bases.

     

     Krannich notes that if an employee is truly excelling and deserves to be rewarded, that employee should receive a raise that goes above the inflation rate. "You want to make sure you are protected against inflation, but that's a baseline," says Krannich. "A raise should be given for performance, not inflation."

     

     The truth is, once you consider inflation, some people are not receiving a raise at all, but are just breaking even. To ensure you are being rewarded for your performance, you need to do a little extra groundwork.

     

     Think of the Future in the Job Search Process

     If you are looking for a job, Krannich says you should make the topic of salary increases a part of your negotiation process, but only after you have done your research. This means knowing what the market is paying and understanding how the organization operates. Ask about the company's compensation policies and about how raises are handled. Does the company simply establish a percentage to cover cost of living increases, or does the policy allow for flexibility to reward employees for exceptional performances? Is there an opportunity to increase your salary ahead of the typical rate? If not, does the company consider bonuses tied to goals and other achievements?

     

     Krannich suggests raising these questions at the end of your overall interview process, and doing so only if you have stressed your value along the way. The bottom line is that getting all of these factors on the table early will keep you from being stuck in a rut later.

     

     Options Once You Are in the Door

     If you are already employed but don't feel you are being compensated for your achievements, you might be able to put yourself back on the right path. If you have not been receiving at least a 3 percent annual raise, start by pointing out that your salary is not keeping pace with inflation.

     

     "If your salary is not being raised for inflation each year, you are really being penalized," says Krannich. If you have been excelling and receiving stellar performance reviews, ask your employer to develop a reward system that compensates you for your contributions to the company. Again, the key is preparation and research. Krannich says that you need to make your case in a way that is compelling and back up your points with real examples of your worth. Document your achievements and accomplishments, researching the market, and demonstrating goals you have met. Krannich suggests putting together a one-page paper with talking points that you can use when you go in to ask for a raise.

     

     Consider all Compensation Options

     Whether you are joining a new company or sticking with an old one, Krannich says that it is important to remember that base salary is not your only option. "Most people get preoccupied focusing on the gross salary figure," he says. He points out that a salary of $50,000 at one company might be worth $75,000 at another company once all of the other benefits and perks, bonuses and commissions are figured in.

     

     No matter which path you are on, Krannich says to stay professional, nonthreatening and focus on the bottom line. "Put yourself in the shoes of the employer," he says. Always demonstrate how you will bring value to the company and, finally, make sure you live up to your own hype.

Last Updated: 24/09/2007 - 3:50 PM


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