Get what you deserve
By Vanessa Papas
Did you know that just one R5 000 raise, properly invested, can be worth R1-million over your career? If that’s not reason enough to ask your boss for a raise, then maybe the realisation that you’re actually worth more than what you’re making is a good start. Asking for a pay raise is one of the most fraught parts of a working life, a process maniacally Googled and agonised over with friends. Advice is often conflicting: do not give your number first, or always do; start with a number you don’t really expect to get, and so on. It almost always involves the uncomfortable situation of selling yourself, articulating your worth and taking a stand with your superiors.
“A frequent piece of advice, hallowed in many business school textbooks on negotiation, is to avoid giving a salary band with a minimum and a maximum figure that you would find acceptable. This is because the manager is likely seize on the low end,” says Deirdre Elphick-Moore of The Office Coach, a skills and personal development firm. “Not only is that advice wrong, but done right, a range actually leads to better results than suggesting one number, according to a new study from Columbia University. Researchers suggest that a ‘bolstering range’ can be effective. This means setting a fairly ambitious number at the bottom range, equivalent to the one you would have used as a single point offer, and then a higher number as the top range. Within their research, they conducted five experiments. In each case, a bolstering range led to better counter offers, there were higher estimates of the lowest price someone would accept, and a resolution. They also found that starting with a single, high number had a negative impact and often shut down negotiations.”
Deirdre continues to say it goes against conventional wisdom that says people have selective attention, that they focus exclusively and narrowly on the number most attractive to them. In fact, the research authors demonstrate that we are more complicated than that. First, a range shapes expectations about an acceptable counteroffer. When there’s a number explicitly framed as a base, people assume you’re unlikely to take something below it. People don’t necessarily make the same assumption when given a single number. Second, there’s the politeness effect. Managers are less likely to move lower than the bottom number because they feel it would be insulting. Third, offering a range is generally seen as a sign of flexibility, even when the actual numbers are relatively high. The perception that you are looking for a compromise may make your counterpart more likely to concede a position in your favour.
“The Colombia University researchers also looked at the impact on relationships between parties post-negotiations. Across the experiments, people offering the higher range were not viewed as anymore aggressive or obnoxious than those who offered a single point, even though the high end of their range was much larger. But they were seen as more flexible and confident,” says Dierdre. “So, if you are not making the first offer in a negotiation, consider doing so, and once you do, make it a bolstering range. The problem is that there is little advice out there on how to figure out the correct range, or at what point in your negotiations to share it.” You can set your baseline number more confidently if you know your market worth, i.e. what you could expect to be paid elsewhere. There are also factors that influence your value to the organisation you are currently with: depth of experience, knowledge of the industry and/or business, ability to influence key people and strong relationships with stakeholders. It is a good idea to be clear about these factors as they will help you justify your bolstering range during negotiations. One factor that experts recommend you learn about yourself before you enter negotiations is your best alternative to negotiated agreement (BATNA). This is the option you would take if the negotiations fall through. For instance, if you are negotiating over a salary increase, your choices of BATNA could be benefits not linked to salary, e.g. sponsored studies, reduced or flexible working hours, or time on projects not directly linked to your job, so that you can develop your CV. Knowing your BATNA is essential because you cannot make a wise choice when you do not know what your choices are. Like the game show contestant who must choose between mystery door number three and the R100 000 in hand, you would be going blindly by not establishing your BATNA. And, the better your BATNA is, the stronger and more confident your negotiating can be.
Before entering a salary negotiation learn as much as you can about your situation and alternative options. If these celebs could go back in time they’d ask their employers for an increase and scooped far more than they did in movies that went on to make millions: Chris Evans earned just R4-million for Captain America, Jamie Dornan a mere R1.7-million for Fifty Shades Of Grey, Jonah Hill a pitiful R800 000 for The Wolf Of Wall Street and Jef Daniels a laughable R670 000 for Dumb And Dumber – which went on to gross nearly R3.3-billion.