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Your Job Offer

The offer a company ultimately makes is the result of a continuous line of discussion, consideration, and negotiation from your earliest contact with them. Early miscommunications can confuse negotiations, causing a poor offer to be made and an otherwise good career opportunity to be lost. It is important to understand a few points about compensation from the start:

A company might offer a "generous" compensation package - not because it wants to give away its money, but because it believes that a particular employee will bring the company a financial return far greater than most other comparable candidates known to them at that moment.

It is up to the employee to determine how much one wants or needs in compensation, although there is no guarantee that those figures will be met in the marketplace.

Each case is unique, so do your research when looking at other companies. Analyze the specific company as a unique case, and see if you would feel comfortable in that type of company. Salaries are not necessarily higher in large companies than they are in small companies. Sometimes large companies can pay more valuable stock options than pre-IPO startup firms. Large companies, it is said, have bigger budgets to pay higher salaries, but frequently smaller companies pay better because it is harder for them to attract the people they need. A key person working at a startup firm may bring exceptional value to a small company, and that person might be able to negotiate for a better package.

Bonuses could be paid on a per-individual basis, per-department basis, per-project basis, or be based on corporate profitability paid to every employee regardless of performance. There are all kinds of bonus formulas. If you are very money-motivated and have great confidence in your own abilities, a bonus pegged to your personal performance perhaps would be best for you. Typically, people in sales should want this type of bonus structure. If you do a good job, but if it might be hard to put a raw number on your yearly efforts, then perhaps a per-project or corporate profitability bonus structure might be better for you.

There are no set patterns in pay, and there are no rules, other than "supply and demand." It is therefore your duty to help move your own career upward from within your company and from one company to another or another. In each job change, ideally you should be aiming to create a special improved value for for yourself. Your special abilities, experiences, attributes, achievements and personality help determine your corporate compensation.

If you are working at a job where you feel underutilized or unappreciated, you are probably right. You could probably do better elsewhere. And the same could be said for your compensation.

If you are happy at your present company, make sure that you are also paid fairly. Some cynical employers are experts at manipulating people who might have low self-esteem, or who might have gotten their first job there after school or their first job in the country as immigrants. Some of these companies know how to push good-natured employees' buttons at raise review time. They know to remind them "how far they've come because of the company." No, such people probably could do well anywhere! It has nothing to do with that company. The lucky party was the company to have stumbled upon such a good employee. If they can get along well with their boss and colleagues, if they can "learn a lot," or if they have been promoted, they most likely could also do as well or better at other firms, and with higher pay. Everyone starting out makes sacrifices or "pays one's dues," but make sure that you are not in effect financing your own job for many years needlessly by accepting low pay at the same company year after year just, because they seem nice to you.

When you look at other companies for career moves, keep in mind that your path toward compensation improvement will go hand-in-hand with your path toward career opportunity improvement. This means that if you take a job at another company doing the same job that you are doing now, but for more money, you may be OK for a while, but that new job has to give you something more than money to prepare you for your next stage after that. Will you be given greater exposure to people, capital resources, technologies, processes or personal challenges that will make you even more valuable to the job market?

Higher salaries can be fun for a while, but only if you like your job. When you are looking at a new job, ask yourself this: regardless of salary, would I still enjoy this job? Would it be good for my career? If the answers are no, do not consider further negotiations. Politely tell the company, directly or through the recruiter, that the job would not be right for you. Tell them why. If it is something that can be helped, many companies will do whatever they can to get a good employee. Sometimes job functions can be reconfigured. Sometimes even new jobs can be created around a top candidate who could be great for a company.


NEGOTIATING YOUR OFFER  
 
Negotiating offers is very hard for everyone, and decent companies feel every bit as uneasy as do candidates. Many very good and otherwise honest people unfortunately sometimes temporarily turn into unrealistically greedy negotiators when salary negotiations start. Sometimes candidates vastly overstate their salary requirements in the belief that "the higher I go, the higher I'll end up." Meanwhile, some employers, also otherwise decent, greedily make offers unrealistically low, in the belief that "we'll start low and see if the candidate will take it."

In both cases, a sloppy, semi-suicidal, unsophisticated negotiator goes by the foolhardy belief that the other party will cave in and bring the offer to a fair and acceptable level. Sometimes it happens that way, but in too many cases, the other party is rightly offended and ceases negotiating altogether. There are many, many variables in the hiring process, and the best chance of success is when both parties at the negotiating table are forthright about what they realistically need and what they can realistically afford.

Do not wait until an offer comes to you, before deciding what offer you want to see from a company. Your calculation should be starting when you first hear about a position, and should be revised after your first interview and when you come home from the second interview.

You must base your requirements solely on what you want to receive in return for working at that job. If you feel that you have been missing out on raises at your present job, do not calculate all the "lost money" that you "could have” or “should have” received from your employer but did not receive. Do not burden a new employer with the sins of your last employer.

Similarly, if you are moving from a lower cost-of-living area to a more expensive area, it is best not to expect the new company to offer you double your salary, simply because you used to live in an area where houses cost less. Local wages are not likely double what they were back home, and your "requirement" will price you way beyond other good local candidates.

Think of each new job as an entity unto itself, meant to serve your career. State a fair and acceptable compensation for your new job, otherwise you may lose your dream job and hinder your plans. All compensation figures must be carefully broken down by base salary, bonus (and conditions, likelihood and history of payment), stock (see bonuses), pension plans, and health and other benefits, as well as taking into account taxation issues. The total calculation of your offer is ultimately what matters, not just base salary. It might be actually worth taking a position at a similar base salary to your current position, for example, if the new company has a tuition reimbursement plan that could pay for an executive M.B.A. at a top business school, effectively giving you a significant cash bonus over two years, as well as an invaluable career asset. In another case, a person with a family member in need of expensive medical care may be well ahead by working at a solid firm with an excellent health insurance plan.

A general rule is that in negotiating, the negotiating candidate must be able to "speak the language" of the negotiating company. In other words, if the company appears to be very straightforward, you be straightforward. If the company insists on playing games, the candidate might have to play games, unfortunately. There are a million variables involved in the subject of negotiating compensation packages, and it is often difficult or impossible to really know what the other party has on their mind. Are there really other candidates, or is that a bluff? Does the candidate really have other offers, or is that a bluff? (Usually there are other candidates, and there often are other job offers.)

Some companies insist on negotiating directly with candidates, while others prefer to use a recruiter to help guard against any misstep by the principal parties. Recruiters can help cushion any potential hard feelings that might be felt in direct negotiations between the principals, but recruiters can only serve as go-betweens involving negotiations between two serious and realistic parties.