Salary negotiations are a bit of an enigma.  They have all of the elements of a Hard Bargaining situation:

1. Limited variables
2. Price is the main focal point (Salary)
3. There are usually multiple applicants vying for the same position

Yet a salary negotiation also consists of elements of a High Dependency situation:

1. Focus is on long-term gain and results
2. Both parties are dependent upon each other
3. Trust and relationship play a critical role in the negotiation

There is no ONE way to negotiate a salary; each situation will vary depending upon the circumstance surrounding the negotiation.  I’m going to first look at a situation where the applicant is a new hire from outside the company.   Step one is to determine how much leverage you have in the negotiation.  To assess your leverage you’ll need answers to the following questions:

1. How many other qualified applicants are in the final stages
2. What are your alternatives to this position
3. What is your breakpoint
4. What is their breakpoint (you’ll have to guess unless you are able to question effectively to unlock this information)

If there aren’t any other applicants and you have multiple options, you have quite a bit of leverage and can effectively set the bar very high.   Continue reading →