Salary Negotiation. Pt. 3

Welcome to Leadership Sovereignty, the podcast. I'm your host Ralph Owens along with Terry Baylor. In today's episode, we'll touch on topics such as focusing on common interests instead of positions, how preparation is the key to success in any negotiation, the power of the anchoring technique, and understanding the best alternative to a negotiated agreement. Enjoy the show! Another another fantastic, point or tactic is to, focus on interest and not positions.

So what does that mean? Sometimes people can get into these types of conversations and they want to state their positions on certain things, whether it be religion, whether it be, politics, things of that nature. That's not the place for for you to state your positions. That's the place for you to talk about different interests that you would share with that person. Right?

So that you can continue to make that connection and continue that you don't want to subliminally offend them either. So once you talk about the interest, your shared interest that you have in common with them, right, now you can further build a connection, right, instead of, build a bridge instead of instead of building walls, right, if that makes sense.

So Ralph, what I believe I'm hearing is the negotiation starts well before you start talking about money.

Yes. Yes. All great negotiation does. It never starts when you get in the room. When you get in the room, should already be halfway done.

Wow.

And so here's the thing guys, that means going in there, making a connection. And I agree with you, Raf, and I'm gonna share a story with you because here's how important connection is. Sometimes there are things that are happening that you have no authority, you have no influence, You have no ability to impact. You know why? Because that person has had experiences outside of who you are.

I understand, you know what they may do though, because of and again, this is outside of our control. Right. And it goes back to Ralph, what you said, what's for you is for if it doesn't come around, God's got something better for you. So there are times, man, that a person I'm going tell you to share a real life story. I'll reborn this, but you can be connected to something because of someone else's experience that you know nothing about.

Right. Yep.

Right. But the beauty is. You go in there with the right intention, the right mindset, the right motivation, right, which is presenting the best version of yourself as you can. Yes. Connecting at a a a people level, a person level.

Connecting. Again, another shameless plug for your story, your brand. And Raph, to your point, when they share, most leaders are gonna share something about themselves as they are trying to determine if you are the right fit. Because if you're at the point of negotiations, understand they believe you are the right fit.

That's right.

They're not going to talk money. Right long term kind of situations with someone that they don't believe is the right fit. So if you're there at that point, man, you're 50% there, you're halfway there.

That's right. That's right.

And so one of the things that we're talking about, is at this point is the meeting before that. Right? It's the meeting before that. Right? And so where it's that, hey, let me get a sense, you know, we're down to the last two or three candidates.

Let me get a sense and a feel for who they are as a person, as an individual. You are negotiating at that point. Real life story. Real life story. I know of a person who was interviewing for a job, pretty prestigious job here in the city and it had came down to two candidates.

The person shared with me, they saw who the other candidate was. And I'm like, okay, I see who my competition is. And so this individual is in the room with that C suite leader and the person shared with me, there was a statement or comment made that was odd and weird. And they were like, I don't really know how to accept that. Or how to how to take that comment.

And basically the long story short is the person didn't get the job. Okay. And this person was baffled because hardly ever had they got into that space, which was the you know, essentially it's the close. It's the close meeting, right? You know, I'm going to close this.

Well, this person carried this for months, just not understanding what happened. And again, I'm going back to there are some things you can control and the things you can't control, right? Control the controllables in this scenario. This person end up finding out that they weren't selected because there was something about that person that reminded them of somebody they had previously knew. Now the person who was doing interview had no.

The interview,

we had no understanding of that.

Hey,

you know what that person had to chalk it up to? It wasn't the right it just wasn't the right one. Right? It was great practice for the next one.

That's right. That's right.

And part of part of exercise to guys just to encourage And I've heard I'm a Joel fan. I'm a Joel fan. Joel said, look, if you have to go through nine no's to get to your yes, come on man, let's get the no's through.

Let's through these no.

And again, so that's all a part of the negotiation process, right? Whether you understand it or not, right? Because it allows you to grow, it allows you to mature, And so when you do get in front of the right seat, that preparation of going through this and being the room, understanding that, okay, I don't have to have sweaty palms right? When we get to this point. So all of those experiences are a part of the negotiation process because here's what we're learning.

The negotiation happens well before you get to the final stage. It is all of this is a part of the, process, right? If that makes sense.

Yeah. Yeah. Yeah. And and so funny funny point. This is this is this is why wives mostly win at all these arguments because they have already prepared their case long ahead of time before they said anything to us.

And we just like, what you talking about? Yes. Yes. Yes.

Yeah. You go in prepared, man. You go in with as much information. Right. Research the company, understand, you know, you know, what their what their P and L statement is.

Understand who their main client is. Understand who their main competitor is your biggest competition. All of these kinds of things. Right? So go in prepared because the negotiations start and then what you know about them.

That's right. That's right. So another, technique we want to bring to you, and this is from the book called The Negotiation Genius. Right? Read that book.

It taught me so much about the negotiation process that I've used and I highly recommend it to other people. But, there's a technique called anchoring. Right? So when you have to negotiate with someone, somebody has to start the negotiations. Right?

Typically, whatever price or salary if you want to call it that is thrown out first, that is the point in which the negotiation starts. So they basically call it an anchor. Right? So if you start off closer to where you want to be, now you're anchoring the conversation closer towards your goal. Right?

Instead of allowing them to start off lower and then you happen to try to pull them up, if that makes sense. Right? So anchoring is a is a technique that's used in negotiation. Another technique, that came from that book is understanding three things. Your reservation value.

So your reservation value is the lowest you're willing to take before you walk away from the negotiation. Right? You need to understand that before you even get into the room. Okay? Let's just use round dollars.

You want this job and it pays you need it to pay $25 an hour. And that's the lowest that you're willing to go. Okay? You also need to understand the other party's reservation value which is the highest they're probably willing to go as well. Okay?

So and the difference between those two is what's called the ZOPA or the zone of possible agreement. Right? So so a couple things just to recap that. You need to understand your reservation value, basically the lowest that you're willing to take. And then you need to understand, or have an an expectation of what the other party's reservation value is, the the most the most they're willing to pay.

And then understand the difference between the two is where you have to play in the negotiation space. Right? Using the anchoring technique to anchor as high as you can to what they're willing to give up. Right? And not starting at the lowest RV, which is what you're willing to take.

I mean, any thoughts on that, Terry?

Yeah, definitely, Ralph. So I remember when I was preparing to move to Houston and started doing the research and I came across a very similar technique and it's called the BATNA, B A T N A, and it stands for Best Alternative to a Negotiated agreement. Basically, it's a strategy that can help you determine your ideal salary and what you're willing to accept if your ideal situation doesn't work out. Having a BATMA can give you more leverage in a negotiation and help you avoid settling for something less than your bottom line. Right?

So, and it gives a couple of techniques. One is list all your alternatives. You know, what does it look like? Right. And so one of the things and I know Ralph, I don't want to get ahead of us, what the beauty of a BATNA is that it's going to help you go through the exercise and bring in more items within the negotiation than just what that salary dollar amount is.

Right. Because you're looking at all the alternatives, right? You know, it helps you evaluate the value of each alternative, choose your preferred alternative. And then to Ralph's earlier point, determine the lowest deal you're willing to accept. And so and Ralph, me know if I'm getting too far ahead.

But in that, right, you're going to determine a lot of things. Right. What does vacation look like? Right. What is four zero one ks?

What are your benefits? That's a huge one. Right. Know, is, you know, with since COVID, hey, do you guys have a work from home policy? I know folks right now that say, look, if there is no work from home policy, don't even offer me because it has been such a drastic change, Psychologically, right to have to get up and go in five days a week knowing that you really can do your job from home really three days a week, but I'll give you three days in the office.

So just factoring in all those things, factoring in what does your commute look like? Your employer is not going to consider that, but you have to consider that in your BATNA. Do you live in a city that has tolls? Because now you have to factor that against your salary Right. Versus what you're doing today.

So, again, don't shortchange yourself as it pertains to just looking at the job is the bottom line number that you're going to offer me. Right. Is there a bonus with this with this with this opportunity? Right. How many layers of how many layers of management exist?

And we haven't even gotten into this part, Ralph. What's the culture like? Understand how your department operates. Do you guys have a top down mentality? Is it a matrix style?

How do you guys manage projects? Are you a agile shop? Right. There's so many things that go into your life experience at this employer. It's not just what is that dollar amount.

And so you factor in all of those things to come to what your dollar amount is going to be. Right. Because you may give 5,000 because you get to work, three days a week from home. Because you're saving that in clothes and lunch, travel. Right.

You got to have And going back to Ralph, we say this all the time now at home. You gotta know your numbers.

Always. Yeah. Always. Always.

You gotta know your numbers.

Thank you for listening to the Leadership Sovereignty Podcast. We hope that you not only enjoyed the content, but gained something to help you on your personal leadership journey. Feel free to reach out to us on X and Instagram under the handles Leadership Sovereignty. Until next time, stay safe, peace, and blessings.