NEGOTIATING A JOB OFFER

Part 2

Prof. Stephen W. Nason

Professor of Business Practice

© Prof Stephen W. Nason – All Rights Reserved

What were the key takeaways from the
previous discussion on negotiating a
job offer?

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Stephanie & Ellie

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What Issues Should You Consider For
Any Job Negotiation?
Anything That Is Important To You
 Salary  Direct supervisor
 Start Bonus  Number of subordinates
 Other pay  Assistant

 Stock Options  Job assignment/rotations

 Retirement  Flextime
 Training/Education
 Saving plan
 Insurance (auto, home, life, work)
 Pension Plan
 Maternity/Paternity leave
 Rapid Review
 Child Considerations (schooling)
 Vacations
 Pet Considerations
 Conferences
Negotiating a Job Offer
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Other Issues to Consider?

 Title  Parking fees

 Location  Taxes
 Computer  Services (professional, household)
 Computer replacement
 Severance pay
 Expat. terms
 Start Date
 Home leave
 Clothing
 Parental Care
 Housing  Travel

 Moving expenses  Fitness

 Student loans  Golf membership
 Wind Speed time off

Negotiating a Job Offer  Etc

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Which type of issues should you negotiate first?

Negotiate the Non-monetary issues first

 Builds commitment
 Creates value
 Often if they can not meet the non-monetary issue they will increase the
salary to compensate

Negotiating a Job Offer

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Candidate and Boss: Compatable Issues

Candidate (Hayden) Boss (Riley)

 Job  Employee

 NYC  NYC

 Pay (.....?)  Salary <.....K

 Trip  Sabbatical

 Trip cost  Harvard

 Move cost  Move cost

 Good boss  Good attitude

Negotiating a Job Offer

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Value of Each Issue for Trading

Candidate (Hayden) Boss (Riley)

 Job  Employee

 NYC  NYC

 Pay (>…..K?)  Salary <….K

 Trip (fun) …K  Sabbatical …K

 Trip cost -…K  Harvard

 Move cost …K  Move cost …K

 Good boss  Good attitude

Negotiating a Job Offer

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Salary Exercise: A Possible Bargaining Zone

Boss
Boss
$.....
Initial Offer (With Sep 1 start date)

Barg. zone

Candidate Candidate
$..... Initial offer
(With moving $)
(give up summer trip)

Negotiating a Job Offer

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How Can You Discover Employer’s Reservation
Point?
1. Research the employer’s salary scale and BATNA
– Look at industry averages
– Research common salary/career websites (Monster, JobStar, PayScale,
Glassdoor, Salary.com, Indeed, CareerOneStop, MyCareer, etc.)
– Ask current and former employees
2. Ask the employer …
– How does their offer to you fit into their official salary range
– What skills determine placement within this range

Negotiating a Job Offer

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How Much Is Negotiating Worth?:
Conclusion Part 1
Most recruiters are willing to negotiate but
 most applicants do not try any negotiation
– Mainly out of fear and misperceptions
What is the average increase if you try to negotiate?
 10% increase just by trying to negotiation
 HK$ 2,000 / mo (HK$24,000/yr)
• This = almost HK$ 3,000,000 in a 40 year career
• assume start salary increase 5% increase/yr
 US$ 5,000 / year
• This = over US$ 600,000 in a 40 year career
• assume start salary increase 5% increase/yr

TRY to negotiate your starting salary

Negotiating a Job Offer
© Prof Stephen W. Nason – All Rights Reserved 11
Salary Negotiation Basics: Conclusion Part II

Find as many issues that are important to you as possible

Pay attention to the core negotiation strategies
 Preparation, preparation, PREPARATION!!!
 BATNA and Reservation Point
 Issue list
 Trade

Negotiating a Job Offer

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What Else is Different About Employment/Salary
Negotiations?
Employment negotiations are very important and very stressful and
What else is particularly relevant to employment/salary negotiations?
 Preserve the relationship!
– Consequences of bad feelings are even more severe
 Building rapport
 Building a reputation within firm
Remember: Employment negotiation has Long term implications
 Salary increase affects you every month for the rest of your life!

Negotiating a Job Offer

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Your Results with the
Relationship Data!

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What are the implications of a poor relationship
after the job negotiation?
If you future boss is not enthusiastic about you
 Poor job assignments
 Fewer promotions opportunities
If the candidate is not happy
 Less enthusiastic work
 Looks for another job
 Leaves as soon as possible
 Quiet Quitting

Always make sure you have a

GREAT relationship in the job negotiation

Negotiating a Job Offer

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During the Negotiation Itself

 Assume that their offer is negotiable

 Think about the best way to position and present your opening offer
 Immediately re-anchor them by reviewing your strengths, needs, and
rationale
 Build Rapport

Negotiating a Job Offer

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How do you Build Rapport

 Preserve integrity of relationship at all costs

 Avoid unreasonable demands: avoid ultimatums
 Aggressive negotiating may get you what you want in the short term, but
it may kill you in the long term
 If you are friendly and display interest in the position the employer will be
more interested in your interests
 As long as you are reasonable and negotiate with a smile you can ask for
almost anything

Negotiating a Job Offer

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What Makes Building a Positive Relationship
Difficult in This Case - Different Information
Hayden's Riley's

 Career center say  Info say

– Avg. = ….. - ….. – Little experience = …. - ….
– Max = ….. – Max = ….
 Hayden's Friends say …..  Riley’s son salary …..
 Hayden thinks he has strong  Hayden has little relevant
relevant experience experience

Which is right?

Negotiating a Job Offer

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Salary Negotiation Basics: Conclusion Part 2

 Put extra care into

– Building the relationship and rapport
– Minimizing negative outcomes
– Maximizing your results
 As long as you are reasonable and negotiate with a smile you can ask for
anything!

Negotiating a Job Offer

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During the Negotiation Itself

 Don’t reveal your BATNA or your reservation point:

– Unless you want to receive it
 Rehearse and practice
 Imagine that you are negotiating on behalf of someone else (not just
yourself)

Negotiating a Job Offer

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When is the Best Time to Discuss Salary in a Job
Negotiation?

Negotiate the Salary AFTER

1. you have received an offer
2. you have discussed non-monetary issues
3. you have built rapport

Negotiating a Job Offer

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Preparation II

Prepare for different scenarios

 If the employer agrees immediately to your counteroffer
 If the employer makes a low-ball offer and says, “This is our final offer.”
 If the employer makes one small concession
 If the employer asks you to make a reasonable offer

Negotiating a Job Offer

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Hardball Tactics!
 Exploding Offers
 Good Cop/Bad Cop
 Highball: Outrageously extreme offers
 Bogey: Pretend that an issue of little importance is actually very
important: Then trade it for big concession
 The nibble: Once the deal is almost done, ask for a small concession to
close it
 Chicken: A final bluff
 Intimidation and Aggression
 Friendship
 Deadline
 Snow job: Information overload

Negotiating a Job Offer

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Exploding Offers: A Nasty Hardball Tactic

Make a final offer, provide almost no time to think about it, take it or leave it –
 A type of threat!

5 Characteristics:
1. Power difference: The side making the offer has more power and is rubbing
you face in it
2. Pressure: Places great pressure on the recipient
– Test of faith: “If you are one of us you will accept
3. Restricts choice or recipient
4. Lack of consideration and respect
5. Lack of good faith: Forces either a great deal or no deal

Negotiating a Job Offer

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Exploding Offers: Solutions

1. Be Reasonable
– Make a sensible, non inflammatory counter offer
– Pretend the deadline does not exist
– Do not show weakness or confusion

What if reason and niceness fail?

2. Fight Tough! Use the Farpoint Gambit

Negotiating a Job Offer

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The Farpoint Gambit

You are given an exploding offer

I accept ….
…. Provisionally, provided that …
 Now make a completely reasonable request that will force the deadline to
be extended for some reason they will accept, like …
– Need for further clarification
– Need for further consideration
– Need to get higher authority

 Once deadline passes, the credibility of the offer has been destroyed
 Now you can get back to normal negotiations

Negotiating a Job Offer

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When to Use The Farpoint Gambit

Farpoint Gambit is tricky. Use it only when all 4 following conditions are
met:
1. Other side uses an exploding offer in an unethical/unfair way
2. Other side does not respond to reason
3. You are truly interested in making a deal, but need more time
4. There are genuine issues that need clarification

Negotiating a Job Offer

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