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Salary Negotiations: What is Possible When There's no More Money (articulateventures.com)
256 points by arrogantrobot on March 7, 2013 | hide | past | favorite | 82 comments

When I was negotiating my salary with my previous employer the only thing I asked for was more vacation time. They refused and instead offered me an extra $3000 so I could take unpaid time off.

They ended up working me to the bone for 6 months then laid me off once the product shipped.

Little things like this can really give you insight into how a company works. If a company is only willing to negotiate on money then maybe money is the only thing they are interested in.

I'll play devil's advocate here: making special deals on benefits other than salary is a land mine. Everyone is used to the fact that people are paid differently, but people are used to uniform benefits (all you out there: please don't call out your exception to the rule... it really is generally a rule). It's likely to have a negative effect or morale, whereas giving you more salary won't. (Yes, people find out these things.)

This is the main reason I am a contractor -- I take a LOT of time off. For my clients, it is normal for contractors to have gaps in availability. For my on-site colleagues, they know that the vacation is unpaid.

Increasingly it feels that contracting is the most straight forward way to work for an organisation. They pay X, they get Y. No messing about with broken promises and vague commitments.

I've also been able to comfortably do contracts for companies that have worked friends (who are full time employees) to the bone. If they want a 60 hour week from me, they have to pay me 50% more.

Also, some contracting companies now give their long-time folks paid vacation. The "vacation" rate may not be as high as the "working" rate, but it still beats a blank.

That said, at least you got to keep the extra money.

This is in line with what one of my previous bosses taught me about negotiations: negotiation is about truly understanding the interests of the other side. In this case even those they are not aware of.

He also used to put crap clauses into contract drafts (if he knew they'd be passed through lawyers), so that the lawyers can demonstrate being useful without messing with the actual matter of the contract. A true example of serving the true interest of the other side :)

Classic example working in a service department for a medical equipment maker. We had a service contract with the relevant department in Hospital Foo, but the admin rolled slow there. The department had the funds and wanted to pay us. We wanted to be paid. We trusted the department on their word - so we kept supplying the contract despite not being paid. At the point 10 months overdue in the annual contract, the word came down that the payment was coming, just the new lawyer was looking over it.

The new lawyer was very much a Make Your Mark person, and despite us, the dept, and admin all saying "we're happy, please pay", she had to add a clause saying: "At any point during the contract, we can cancel and get reimbursed the full price of the contract". That is, they could cancel at 11 months 29 days of receiving support (this is actual send-field-techs-out support, not 'here's our pdfs and phone number') and get the entire year back. Of course it was bargaining nonsense, and we negotiated to a prorata clause, but it caused a fuckton of busywork for all involved, useful to zero people except the Make Your Mark lawyer. So much wasted time and money everywhere just for her to feel validated.

>..so that the lawyers can demonstrate being useful without messing with the actual matter of the contract

There's actually a programming version of this referenced on an old StackOverflow question - a "Duck", i.e. a feature submitted so management will take issue with it and not something else more important.

http://www.codinghorror.com/blog/2012/07/new-programming-jar... - see entry #5

Interestingly, map-makers put in fake geographical features, known as "bunnies", so that they can catch people copying them:


A former co-worker of mine used to manage 7-elevens. They would do the same thing when a regional boss came on an inspection. They would deliberately do one display just a little wrong so the boss could ding them on that and move on without looking too closely at the rest of the store.

Another example. . .deliberately inserting grammatical and other errors to distract the red-pen weenies. And, of course, you already have the corrected version ready to go. . .you're just waiting for management to return the red-lined version.

I think many successful people and organizations take a similar approach all around.

Is your baseball team underfunded compared to others? Use the lowered expectations to test theories and find market innefficiencies.

Are customers are worried that our company is too small? We'll give you the email address of the CEO if you have a problem.

Don't have any money for raises? Offer employees special deals that no larger employer would even consider (like the wave height deal in the story).

Take the weakest part of you and beat the bastards with it.

It's more than just finding your weak points, it's about creative solution finding that resonates with both parties. If Brenda had offered the author unlimited mountain biking time, the author might have left the station.

This story made me happy.

I took a negotiation class a few years ago running through some examples where each side had to negotiate X and got crib sheets talking about what were the different aspects of the negotiation and how much each aspect meant to each person.

We did the exercises and learned lessons but one thing I noticed was that if we threw out conventional negotiation tactics and instead just showed the other person what our value assignment to each aspect was we both ended up maximizing our utility from the negotiation event. So you would think that it would be great to just be an open book when entering a negotiation right?

The problem is that as soon as one person hides any information then the trust factor that makes this work is broken. And for whatever reason (pride or lack of authority) this happens all the time in real life.

That's why I liked this story. Apparently both parties came to the table open and honest about what they wanted and the outcome I thought was favorable to both parties.

I believe this is the basis of the Prisoner's Dilemma

Great article.

It bothers me that people think like this:

> I was already getting paid almost as much as people who had been on staff for many more years than me.

Salary should be based on performance and expertise, not how many years you've been sitting in a seat.

Are you're saying that companies shouldn't give yearly raises except for inflationary increases? Wouldn't that be an implication of not considering time with the company?

Rewarding loyalty to the business is not a meaningless gesture, nor should it be an affront to new people.

The difficult thing from the employer's perspective is balancing the reward for many different aspects of each employee that makes that employee important to the company: leadership, loyalty, consistency, trustworthiness, performance, expertise, efficiency, etc.

Companies shouldn't reward loyalty, especially when that means punishing performance. Loyalty is only meaningful in the sense that your company-specific knowledge makes you more valuable to the company.

All other things being equal, a 25-year-old who just joined the company and automated 5 people's worth of work is worth several multiples of the 35-year-old analyst who'd been at the company for 10 years and was doing one of the (now automated) jobs. Yet most companies will pay the 25-year-old significantly less. This is just plain dumb and irrational, and encourages top performers to go elsewhere.

Loyalty is only meaningful in the sense that your company-specific knowledge makes you more valuable to the company.

I couldn't disagree more. Loyalty is its own benefit that's worth compensating people for. I value people who come into a group and do more than just contribute a bunch of code. I value people who contribute to the culture and the framework of the ongoing enterprise.

Furthermore, I want newcomers to see how I treat the current employees with respect and reward for being contributing parts of the team not just this past week, but for years.

I'm not at all saying that just occupying a seat in the office should get you rewards. It shouldn't. But occupying the seat AND being productive while you're there is a benefit to me as a company founder.

Give me a competent employee whom I can rely upon year after year vs some hotshot code slinger who is here today and gone tomorrow.

I call it the "Mike Krzyzewski" team building strategy.

It sounds like we actually agree in practice and I've just heard the word "loyalty" used differently from the way you've heard it used. Apologies if I used the wrong definition, and let me try to clarify my point:

I completely agree that contributing to culture and the business is valuable. What annoys me is how much a lot of companies value seniority over anything else. The attitude of "Well, X is older and has been here longer than Y, so they should get paid more" is incredibly prevalent even in the USA. Especially in tech-heavy jobs, I've seen plenty of cases where someone might contribute 5x or 10x as much value as the average person in their position...and receive a 10% higher raise as a result.

People are lazy. Calculating seniority is easy and "objective", not controversial; in fact, it's so linear you could even write a program to automate it (I bet somebody did just that). Evaluating performance or actual returns to the business, that's hard; the metrics are often very subjective, and people will start arguing. Rule #6582 of the Safe Manager: Don't Give People Excuses To Argue. So seniority it is.

This was unfortunately exacerbated by Trade Unions, which needed something "objective" to force owners to pay up and keep members happy, so they built their demands on this sort of easy metrics: seniority, hours of work, etc.

I'm sure if you could find a generic way to calculate productivity in an uncontroversial way, managers and unions would jump on it, but in most cases there ain't, so seniority it is.

Employee evaluation forms is not a good metric to evaluate performance?

What you're talking about is seniority, not loyalty. Someone can have 30 years at a company and still be not loyal if their heart's not in it, they plan to jump ship, they take advantage of others, they embezzle, etc. Seniority is length of time employed at the company. Loyalty is investment in and contributions to the work community.

And that kind of loyalty makes a company a nice place to work, because what you have is a community of people who are invested in each other.

A HN sub-thread that moves toward consensus. Wonders never cease. ;)

There's also a lot to be said for people who loyally provide/demonstrate leadership (especially when it's not part of their job description) as a core value, thus contributing to the improved performance and morale of others whose jobs were not automated our of existence by the hotshot codeslinger. And maybe imbuing some leadership in others, as well. Something else that cannot be done by here today, gone tomorrow folks.

Companies should reward loyalty because it is expensive to hire and train new employees.

It's possible to do both, using two tools: promotions and performance bonuses. If the 25-year-old is more of a rock star than the 35-year-old, promote the 25-year-old. Or, give them a nice fat performance bonus for that particular project.

But what is going to keep the 25 year old there for 10 more years? You can only promote someone so much. This is why companies provide merit raises within positions, and how a 35-year-old ends up making more than a 25-year-old for the same job.

All things being equal, odds are the 25-yo who just joined the company knows fuck-all compared to the veteran who's been there 10 years.

An exceptional 25yo vs a should-have-been-fired-already 35yo, maybe you'd have a point.

Companies shouldn't give out inflationary rises.

Assuming they're happy with you they should pay the market rate - what it would take to replace you in the job you do at the level you do it.

If they do that you shouldn't have to worry bout being under paid, they shouldn't be worried about over paying you and for most roles it's pretty easy to work out.

Plus from a selfish point of view anyone in IT would have done better than inflation over the past decade.

Is it just me, or is it weird that this brand new blog (really just an advert for a writing company) has had 3 blog posts, all 3 have been submitted to HN (2 by the same person), and all 3 have gotten pretty high scores?

The other 2 stories being:

https://news.ycombinator.com/item?id=5304317 http://news.ycombinator.com/item?id=5292431

They must be good writers!

EwanToo I am the writer- those two guys just showed me the site. I used to blog on my company website (for like a month) but I quit because it never went anywhere- but when it gets posted here people talk about it- comment etc. made me want to write more.

I'm glad to hear you're a real person then :)

Hate to do the grammar nazi here, but since the company seems to offer grammar editing, reading phrases like

    This new method helped us to raise a more money in less time then normal boring pledge drives.
doesn't lead to much trust in their skills...

Yea I don't make much money as an editor. see: http://www.articulateventures.com/thoughts-on-being-an-emplo...

Please, please fix "I am a good writer, the content that I create is quiet good (I think)". That's the first line of your paragraph about gramatical oversights, and you say "quiet" instead of "quite". Also, the "(i think)" makes me feel like you're not a professional.

ALSO, I'm sure you can hire someone on craigslist to give your work a second read for gramatical mistakes, if that's really a blind spot you care about.

But I worry, are you even trying to get better? It sounds like you've accepted your current skill level as a fixed balance that can't improve, when that's probably not the case.

I thought that was a pun!

That's an interesting article, thanks. And I'd like to say that I did enjoy your first article too, and that I was willing to overlook the tiny details... until I came here and saw that writing (and more than writing - grammar editing) was your core competency.

But I'm curious then: do you currently do the grammar editing yourself (in your "Fixer" package)?

"Weakness is strength. Strength is weakness."

Being a small flexible company means they can't compete on money, but they can compete on flexibility and increasing quality of life.

I think that's all any employee wants from a job -- a good quality of life. Money is probably the worst way of quantifying if they employee is already middle class.

It's amazing even how "here's a week to fix that low priority problem that bugs the shit out of you" would go to improve morale.

It's also amazing how working for a large company starts to become less fulfilling when they can afford to pay you instead of really rewarding you in a way that is meaningful. Sometimes money really can't buy happiness.

What if "that low priority problem that bugs the shit out of you" is your crappy job?

Then there are bigger issues at hand and no amount of money or 'alternative' raises will make a difference.

I found this article awesome, but not only for showcasing the creative tools a leader can might under tight resource constraints:

Beyond her creativity, Belinda shows great empathy for the author, and at the same time draws on the author's own empathy. This is both powerful and gratifying; at the end of the negotiation, each side feels that the other has his best interest in mind and truly cares about them. This arrangement is not a one-time compromise or an appeasement deal, and it certainly doesn't feel that way. It's a relationship that continues to grow.

One point the author, perhaps prevented by modesty, does not make is that he/she too is a good negotiator. He/She wanted to make it work - actually recognized the efforts of their boss as genuine and feels grateful for what they learnt from the experience.

I have seen too many engineers go into negotiations with the attitude that there is only one right deal - the one they have crafted and proposed on their own. Yes, management does offer a lot of bull, but its important to re-evaluate every new offer that is different from your own starting position.

I find this article slightly odd. It sounds to me like the author got a raw deal. I've been in this situation before early my career. The old "we want to promote you but can't give you much more money, here's a bunch of vacation days instead". Guess what you do with vacation days when you have no money. Sit at home and be bitter about the fact that you can't afford to go any where. And you look for another job.

> She told me that she wanted to pay me more, but the $2,000 increase, I was already getting paid almost as much as people who had been on staff for many more years than me.

That's an awful reason not to give someone a raise! Politics like this is why so many companies lose good employees. If the author was worth more than the more senior staff, she should have gotten paid more. People talk and there's no real way to keep salaries secret, but who is easier to replace in this situation?

> She more than gave me a fair deal. I stayed with the organization until I was accepted into graduate school. I did not financially benefit from that job in the short term, but in the long term- she put my career in a catapult and shot it forward.

Sounds to me more like she held you back. What could you and the company had achieved had you been properly rewarded? Had to been giving the motivation to take the next step within the company? Keeping you poor sends a clear message that you should focus your efforts elsewhere.

Guess what you do with vacation days when you have no money. Sit at home and be bitter about the fact that you can't afford to go any where.

Good grief, no. I was in a similar situation- I got a day off each week, and worked from home for another. That day off was a fantastic benefit- I could get all of the dreary stuff I had to do on the weekend (grocery shopping, laundry) done in half the time I would otherwise, because everywhere was less busy.

That, in turn, made my weekends much more productive and fun. You can do a lot without spending too much money, you know.

> Guess what you do with vacation days when you have no money. Sit at home and be bitter about the fact that you can't afford to go any where.

What? This whole "no fun without money" attitude is maleficent bullshit.

This dude had a surfboard and waves are free. Besides that, there's a ton of activities that are fun and free or almost free. Running, walking, swimming, biking. Even if you can't do physical activities (for a reason that isn't merely an excuse) there's still meditation, for which the only requirement is basically that you are alive.

The only reason that stops anyone from having fun without money is the mindset.

I'd rather have a day off with my surfboard on a day with waves than $400 to spend on a Friday night. Easily.

To some people money is the ultimate proxy for happiness, for some it is not, and of course there is a spectrum. It sounds like money is a better proxy for happiness for you then it is for the author.

I actually had a discussion with my employer the other day about how next time he considered a raise, I would actually prefer more vacation time, or a shorter work week. I enjoy the stability of a monthly paycheck, and I enjoy the work I do. However, given the choice of more free time and more money, I currently desire more free time.

> Guess what you do with vacation days when you have no money. Sit at home and be bitter about the fact that you can't afford to go any where.

The opposite can also be said, "Guess what you do with extra money and no vacation days. Work all day saving money and be bitter about the fact that you don't have time to take a vacation and spend it."

She could barely pay for gas though... that's not enough money.

>Guess what you do with vacation days when you have no money. Sit at home and be bitter about the fact that you can't afford to go any where. And you look for another job.

I bet literally nobody on hacker news has a side project that they wish they had time for.

Nope. Nuh uh.


The stuff I'm pushing for at my company is being allowed to remote-work, and more time off. Not because I want to get away from anything, but because it will allow me to focus better on the projects I'm doing for them, and also have more time for the projects I'm doing for me.

We're talking about someone who couldn't afford a cell phone. Money becomes less important the more of it you have.

I took a semester off to live with some ski bums in Colorado. Them: "Why do you work so hard?" Me: "So I can get rich" (young and stupid response) Them: "Well, what are you going to do when you are rich?" Me: "Ski all the time" Them: "Dude, you don't have to be rich to ski all the time. We freaking clean toilets, but I ski 100+ days a year".

That conversation changed my life. I realized that getting rich was a stupid goal, because everything I wanted to get by being rich I could get without being rich. There are broke people traveling the world, skiing everyday, surfing everyday, etc.

I also realized that although a random day skiing is undoubtedly more fun than a random day working, I would be unsatisfied by just doing that all the time.

I think the ideal is a job you believe in with good work/life balance. 3 day weekends every weekend. Even working 40 hours a week with a short commute and quick access to a mountain or an ocean is great.

Meanwhile, working 80 hours a week for really any amount of money isn't worth it.

Loved this- and it is right in line with the skier- I am reminded of a Pearl Jam lyric- "if he only knew now what he knew then."

And somebody who wanted to spend all of their time surfing.

What do you think they'd be doing on days off? Surfing maybe?

Its not wrong for you to approach everything so skeptically, but I think you have to see it from the authors perspective:

1. He clearly has an altruistic bent (he'd just returned from the Peace Corp. in Kenya)

2. He liked his position for its flexibility and variety as noted throughout the article.

I think the point of the article is that many people approach salary negotiations as an optimization of just salary. But his real desire was to be happy and money was only one component of that. The boss found ways to make him happy without meeting his salary demands.

The story isn't a story of a 'clear win' for him, its an analysis of how to approach negotiations. Salary negotiations aren't always about maximizing your salary, you can make them more flexible by maximizing for your happiness. It presents more flexibility to both participants.

I don't disagree with that. The author flipped a bad situation and found a way to get out. That's exactly what you should do in that situation, rather than standing your ground to make a point.

Perhaps where I disagree with you (and others who have responded to me) is in how important it is to keep good employees. If the author really is worth more than the more senior staff, the company has failed itself tremendously by losing him. If he is worth more than the others today, what will he be worth in the future (what is his growth potential). Putting up roadblocks for growth in your employees has to be one of the worst things HR can do.

You may be reading a lot of a extra meaning into a generic negotiating tactic / ego stroke comment from a boss.

I'd add that as with any "advice" articles, it's worth being mindful that one size does not fit all. They should be taken only as advice, no matter how assertively stated.

It sounds like you were screwed by someone else and are bringing that bile over that situation to to this.

Clearly the author believes it was a somewhat raw deal in terms of the money, read the summation at the end of the article, however he shows that you can get something you want that is not directly monetary, and that long term value can come out of it.

Also he clearly says that he had the chops to find another job, but what she did was make the non-monetary compensation attractive enough that it fit. If it did not, he would not have taken the deal.

Also to address the "keeping you poor" comment, he states more than once that she showed him all the budgeting, and he agreed with her conclusion that there wasnt any more money. Where should the money come from?

>Guess what you do with vacation days when you have no money. Sit at home and be bitter about the fact that you can't afford to go any where. And you look for another job.

Not everybody treats a 'vacation' the same way. For someone with a family that could be extra time with the kids. For my dad it would mean extra time in the garden and doing yard work. For me it would probably mean sitting at home playing video games. People aren't obligated to spend money traveling somewhere on their vacation time.

1. I don't think you can be so simplistic in branding her decision as "politics", I'd say it was more "prudence". Quite possibly he was just one of a number of underpaid workers that truly deserved a raise. Giving him an obscene raise would have had a high likelihood of severely negatively impacting the morale of the other workers.

2. "Keeping you poor". That really depends on how you measure poverty - the author clearly feels like the lessons learned from his time at the company were far more valuable than an extra $3,000 a year would be, and given his writing, I'd be inclined to agree with him.

Bottom line... Always work for experience over money.

Are you saying that she could have fired some other people and given this guy their money? Because he was working so hard that he could replace them? If not where does she get the money? You can talk about what you deserve to get paid all day long, but if the money isn't there, you have to take whatever money is there, or quit. And you keep talking about the company. It was a non-profit radio station in a tiny market, what was the next step?

It didn't sound like was a budget problem - it sounded like the issue was that more senior people would be butthurt that someone who hadn't been there as long as making more money.

Well, in the article it does state she ended up showing him the financials and they genuinely couldn't afford anything over that extra $2k.

Ah, you're right, I skimmed too quickly.

She didn't hold him back. She helped him draw nearer to his bigger goal of going to grad school by being creative. Sure, a bigger raise would have also achieved the same goal, but as the author pointed out, she empathized with her employee and found creative ways to show that she actually cared and wanted to make the situation best for both of them, not just her.

"Bargaining for Advantage" is my goto book. It's really solid and highly recommended for anyone that does any negotiation of any sort.

It has a test to see what bargaining type you are and doesn't just focus on the "get the max tricks" like a couple of other books.

Pretty ethical in general.

This made me sad :-( I was dissapointed with my recent pay rise (+3%, 18months after the last rise). Maybe I didn't negotiate well but I was open and honest. I don't care if I'm paid more than my peers, or that there's no more money in the pot, it's still a shitty deal with no sweeteners. I guess that is what you get for being someone else's employee.

I don't know where you are but it helps to document your accomplishments ahead of time and socialize that. I'm not talking about being an obnoxious self-promoter but making sure people acknowledge your (actual) contributions.

I find that many wait for their managers to automatically do the right thing and then get disappointed. I've always advocated being more proactive about this.

Let's say I want a raise and a promotion this year. I outline it in my goals, and as the year progresses have meetings with my manager to make sure I'm doing everything possible to reach that goal as well as documenting things along the way. When it comes time for review, one of two things will happen: either you have communicated clearly what you want and you get most of it, or you get screwed either by your manager or his/her manager. If that's the case, you then need to decide if something went wrong, or if it was not in good faith. If so, it's time to leave.

Also, protip: find out when budgets are being set, that's the time to push/remind for more money/whatever. Usually by the time reviews come around, things are pretty much set in stone.

Don't be sad. Keep kicking ass and follow what I've written. I'm willing to say that you will likely have a more positive experience next go-around.

PS. This only works if you do actually work hard and get shit done. If you like goofing off and just want more $$, it will NOT work.

This is a great post. A concern is that this only works when the base salary covers your needs. If it doesn't, you can't pay your rent with surf time.

Don't negotiate salaries. Negotiate responsibilities. The salary comes after that.

Article assumes a situation where company can not pay market rate because there is "no money". No money means either they are not profitable and not funded enough to succeed, or they are lying to the candidate. Whichever one it is doesn't matter because in either scenario accepting position is a poor move for a talented and capable candidate in an environment when there are many positions available for competent people. These insights terrifically simplify negotiations in this scenario to: "No thanks."

That's true only if you value money and nothing else.

I know plenty of people who work at below-market wages for nonprofits because they support the mission. This fellow had some of that, but he also valued surfing time more than extra cash. People also value recognition, good colleagues, solid benefits, low stress, and a bunch of other things.

Just because people value different things than you doesn't make them wrong. De gustibus non est disputandum.

Those claims are fallacious.

It has nothing to do with the supposed greed that you absurdly assign to the engineer. It has to do with critical evaluation of the company's financial condition. A company that can not pay market rate because they don't have enough money can't afford to be in business and will not continue to do so for much longer.

There are lots of jobs out there, just like there are plenty of potential romantic partners. Sure, someone could date a homeless crack addict. Perhaps those who don't do so are shallow according to the same sort of argument being used here.

Well, let's test your theory. The article describes a real place that was being run on a shoestring. Looking at resumes, this was 2006-2008, so it's circa 5 years later. Are they out of business?


Looks like they are still going. Just like every shoestring nonprofit I know.

And the reason is exactly that people get paid in things other than money. They could also have run the radio station with market-rate salaries. They would have had a drastically smaller staff. But because they wisely recognized that money isn't the only thing that matters, they looked for people who could take substantially lower salaries but valued other things they could offer.

I see that you are not a risk taker.

There are reasonable and foolish risks. Only a fool takes a foolish risk.

A better job elsewhere :)

this woman is my new hero. i only hope that i am in a position to do that for someone some day.

My go to books for negotiating:

* Getting Past No

* Getting To Yes

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