Negotiate a pay package

Why is it important?

We would all love more money and better perks, but successfully negotiating a reward package can be one of the toughest and most nerve-racking experiences we encounter in our working lives. It is a situation that we all face at some point in our careers, either when we join a new company, secure that well-deserved promotion, or at the annual pay review. So how can you make the most of this opportunity?

Prepare your case

Gather evidence to justify your value to the company. List responsibilities and major achievements, and if you are certain your talents make you unique or indispensable, emphasise them. Any initiative that has had a positive impact on the bottom line of the business will also strengthen your hand. So if you have managed a project that has saved money, be sure to point out how much.

Compile data on the salary range for your position so you can pitch yourself at a realistic level. Remember, you will seem more reasonable specifying a salary range rather than requesting an exact amount.

“Determine your ‘negotiation range’. What are your entry and exit points? What will you accept and where will you compromise?” says Peter Christie, director of reward at management consultancy Hay Group. “At what point will you refuse the job offer or resign?”

Hold a dry run

If you feel awkward about asking for this meeting, it can be constructive to work through the issues with a trusted friend.

“Use this conversation to determine your overall objective, map out the strategy you will use in the meeting, list the key points you wish to make and prepare for objections and/or counter arguments,” says Christie.

Consider the wider issues

Try to put yourself in the position of your manager. Are they subject to financial or other constraints? Are they able to authorise any agreement negotiated or will they need to convince other more senior executives? How familiar are they with your work and how you fit into the broader team?

You should also consider the company’s situation. If it is performing well, you will stand a far better chance of your request being met than if the company is about to embark on a redundancy programme in a less buoyant market.

Weigh up the benefits

Benefits packages are increasingly flexible, so if a hefty pay rise is not on the cards, think about what might make a fair trade-off, such as extra holiday allowance, a one-off bonus or employer commitment to more regular training and development. Also consider suggesting performance-related pay or developing a clear plan with your manager to help you step up to the next grade.

Above all, Christie advises individuals to remain dispassionate. “Don’t let your own emotional reaction cloud your judgement as to a fair and reasonable outcome,” he says.

Conducting the meeting

Keep the discussion focused on your reward, performance and promotion prospects. Make notes and write them up soon after the meeting, giving a copy to your manager so both of you have a record of key points and decisions made. Log any subsequent conversations and save relevant e-mails.

“Treat the meeting as the beginning of a dialogue,” says Christie. “If you can close the negotiation in the meeting, so much the better. If not, treat it as the first step towards getting what you want.”

If you only do 5 things



  1. List your responsibilities and major achievements
  2. Work out your ‘negotiation range’
  3. See the issue from your manager’s perspective
  4. Respect the value of benefits
  5. Ensure any discussions are calm and collected

For more info

30 Minutes to Negotiate a Better Deal
By Brian Finch, Kogan Page,
£3.00, ISBN 0749426667
How to negotiate


Expert’s view on negotiating a pay package

Peter Christie
Director of reward,
Hay Group

How can an individual improve their bargaining position?

The manager usually has the upper hand in the negotiation because they have more information. They know about competitive market levels of pay, pay differences among the team, what cost the business will bear, plus the total cost of a higher salary. Your strategy must be to level out this relationship by building your own knowledge and taking account of your manager’s position.

How should you work out the timing of the request?

Don’t let the issue fester, but also choose your moment with care. Explain what you want to discuss so that your manager can prepare. Ensure there is sufficient time for the meeting and that it is held in an appropriate location – the tendency for open-plan offices means you will probably need to ensure the availability of a meeting room.

Can anyone be a good negotiator when it comes to their reward package?

Negotiating your own pay package is probably the most challenging form of pay bargaining as it is difficult to separate emotion from logic.
However, if you are able to be dispassionate and follow clear logic when presenting your argument, you will have a greater chance of success.

The key is to not be a passive negotiator – make sure you have clear entry and exit points, and consider in advance where you would be willing to compromise.

When would you recommend compromising?

If your manager puts forward a reasonable plan that addresses the concerns that you have, you should accept this. It may be that it will take longer than anticipated to reach your objective, but bear in mind that most managers are unable to change the world in a day. There are a myriad of inter-dependent issues, so satisfying your concerns about reward may cause issues with other people. Ensure that any promises of future action are confirmed in writing with clear deadlines attached.

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