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Getting paid what you deserve
5 Tips: Negotiating a raise can be nerve-wracking. Our tips will help guide you.
May 2, 2005: 3:09 PM EDT
By Gerri Willis, CNN/Money contributing columnist
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CNN's Gerri Willis shares five tips on how to negotiate a raise.
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NEW YORK (CNN/Money) - For some of us, negotiating is exciting and challenging. For others it's just awkward and obtrusive.

One thing is for sure, negotiating your salary either in a new job or your current one walks a fine line between being challenging and obtrusive. Don't put any pressure on and you'll be taken to the cleaners. Ask for too much and you'll come across as arrogant and pushy.

In today's five tips, learn how to negotiate your best salary the smart way.

1. Do some soul-searching.

It's easy to be frustrated with work when you aren't being paid well. There could be other aspects of your job that are getting to you too. Before you step into your boss's office and demand more money for the long hours you're currently putting into a project, stop and think. Is it just the pay you want to change?

Take a moment and write down your frustrations. Besides pay, maybe you are frustrated with your title and your career path too. Money is only one part of your compensation. Titles, corporate perks, career and growth opportunities are also a big part of the overall package.

By realizing this, you can create a set of "wants" to draw on while negotiating with your boss. Then rate them based on importance. Maybe a better title is worth more to you now than a bigger pay increase.

"Know what you want in the negotiation session, and what you can live without," says Richard Bayer, Ph.D., chief operating officer at The Five O'Clock Club, a career-coaching service.

2. Know your worth.

Experts say the job market is improving. While that means there may be opportunities for new jobs, it doesn't necessarily mean that companies have money growing on trees. With a little extra money in their budget, departments are using it to retain good employees. In other words, if you're a superstar, there could be money out there for you.

However, you need to know first if you are the superstar you think you are. What you think is adding value to the company might be seen by management as a waste of time.

"In the absence of having a formal discussion about expectations, most employees do what they think appropriate, which may not be what the company values most," says Steve Gross, leader of Mercer Human Resources Consulting pay practice group.

Therefore, it's important to understand your boss's expectations. Don't be afraid to ask her: What is good performance, and what is going above and beyond good performance?

When you know where you stand, it is more natural to choose a percent you can ask your salary to be raised. Right now, Mercer Human Resource Consulting says the average pay increase for 2005 is estimated at 3.5 percent.

If that's average, superstars might be able to ask for 8 to 10 percent. If you know you're not the best employee in your department, try for 5 percent. You can also compare your salary to that of others in your industry on and

3. Don't demand.

The perfect execution is key when asking for a raise. Experts recommend you never say, "I need more money." The fact is, your employer doesn't need you -- there are probably plenty of people out there to fill your shoes.

You must convince your boss why you deserve the raise. Point out the ways you have gone beyond your boss's idea of good performance and how it added value to your team or department. If possible, explain the value you added in quantities or dollar amounts.

Say you landed five additional accounts or you were $100,000 above your sales target -- those numbers help shine some light on your hard work.

Gross advises you then ask your boss, "Based on my contributions, do you think my pay is fair?" Ultimately, you want your boss to compare your performance to other employees in your same position at the company. If they are an honest and fair boss, says Gross, they'll likely give you an honest answer.

4. Never make the first bid.

With the presentation of your superstar abilities in the bag, now's time to play hard ball. Whether you are negotiating a raise or the salary at a new job, don't throw the first pitch.

In the raise scenario, you've just asked your boss if your pay is fair. If she says no, ask what she thinks would make it fair. Say she only offers 5 percent, and you were thinking 8 to 10 percent. Tell her, "Eight percent would work for me." If she replies no again, then ask what would work for her.

When you're bargaining with a new employer, try to force him to make an offer first. Keep in mind: if you're already at the negotiations stage with a new boss, it's clear he wants you on his team.

He is, however, going to try and get you for the lowest salary he can. Don't fall into his trap. If he says, "How much do you want?" avoid the question (and the opportunity to shortchange yourself) and respond, "How much are you offering?" Bayer recommends. That puts the bossman on the spot to bargain for you.

5. Try Plan B.

So the bossman comes back with not nearly what you're hoping for. Bayer advises, "Talk about the job. Look disappointed and say how enthusiastic you are about the position, the company, and the possibility of doing great things for this manager. Say everything is great, and you can't wait to start, but your only reservation is the compensation." Ask next what can be done about that.

Also remember that money isn't the only thing to negotiate. If your boss won't negotiate a raise or your base salary any higher, Gross recommends you look to other rewards.

You might ask for the opportunities to take classes on the company's tab, to have your tennis club membership fee paid for, or to work in another country for a few months.

Your boss might be pleased by your flexibility. After all, she is wrestling to stay in her budget, and often other rewards come more easily from the company than just more money.

Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. E-mail comments to  Top of page


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