How much are you actually worth?

A salary negotiation with an unexpected outcome!

Employer: What salary* do you expect for this position?

Applicant: I expect a salary commensurate with my performance. What is your budget?

Employer: Wrong question!

Applicant: I know what I'm worth and I'll tell you what my last salary was as a guide.

Applicant: My last salary was CHF 150,000.00

Employer: For this position we were looking for a fixed salary of CHF 120,000.00 and a performance component with target agreement of CHF 15,000.00.

Applicant: That's far too little for me, I know I'm worth more.

Employer: That's great if you know that. Then I'll make you a new proposal: CHF 110,000.00 fixed and CHF 40,000.00 bonus if you exceed the specified performance targets. That's 11% more than my first proposal. We will adjust the new performance targets together accordingly.

Applicant: This is too risky for me, I know what I am worth and after all, I received this salary in my last job.

Employer: We are looking for someone who thinks and acts like an entrepreneur and expect you to share some of the risk.

Applicant: I am an entrepreneurial thinker and do things well, after all I have just completed my EMBA.

Employer: That's great. Congratulations, you now know very well that you have to earn the money before you can spend it. Then I'd like to make you a new proposal. I will pay you a fixed salary of CHF 100,000.00 and a bonus of CHF 80,000.00, which is 33.3% more than my first proposal and 20% more than you last earned. We will adjust the new performance targets to be achieved together accordingly!

Applicant: Uhhh, I'm a bit overwhelmed and I need to think about this again first!

Employer: Do that. Based on your background and training, we thought that you would understand the mechanism of a performance-related salary straight away.

The moral of the story: No matter what you have earned so far, you are only worth as much as you are able to achieve. As a leader, I recommend that you take a bonus-malus risk, because that's the only way to really know how much you (man or woman) are worth at the end of the day.

Good luck with your next salary negotiation.

*Salary = representative of the total package