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> Whenever I see strategies like these I consider those two cases since they have influence on how negotiations are done. In the car-sales case, there is an inc

> Whenever I see strategies like these I consider those two cases since they have influence on how negotiations are done. In the car-sales case, there is an incentive to get the most out of the individual negotiation since you almost certainly will never see each other again. In the business case you are incentivized to prioritize the relationship with your peers over any individual negotiation. Very insightful point. The biggest salary negotiation mistake I see is when people assume the negotiation is of the first type (one-off, never see people again) instead of the latter type (part of an ongoing relationship). If a company works hard to minimize someone's compensation expectations and convince them to accept below-market salary, they're going to pay for it later when the person wises up and leaves for something better. This scenario is well-known. The less discussed scenario is when a candidate aggressively negotiates a very above-average compensation but subsequently performs in a below-average manner. This is one of the most common complaint scenarios in a private manager forum that I'm part of: Managers who get wowed by people with excellent interviewing and self-selling skills who end up underperforming their lesser-paid peers later. It generates a lot of guilt and anxiety for managers when they realize they've been duped into inverting the contribution:reward relationship in their compensation structure. These people are the first to go in any downsizing, reorgs, and layoffs (and rightly so), but they're often great at talking their way into the next highly paid job almost immediately. This is one of the main reasons experienced managers will go extra deep on reference checks for people with job-hopper resumes.

rkk3 5y ago
> The less discussed scenario is when a candidate aggressively negotiates a very above-average compensation but subsequently performs in a below-average manner. This is one of the most common complaint scenarios in a private manager forum that I'm part of: Managers who get wowed by people with excellent interviewing and self-selling skills who end up underperforming their lesser-paid peers later. It generates a lot of guilt and anxiety for managers when they realize they've been duped into inverting the contribution:reward relationship in their compensation structure. Isn't this more a failure of the management? What can justify having wide disparities in starting comp for the same role? Seems like the striving candidate should be bumped up a level & you just hold them accountable to the higher bar, rather than evaluating their performance based on comp.
- PragmaticPulp 5y ago
  That's the point - If you bring someone in at the wrong level (higher comp = higher level) then you have a major problem. Compensation does vary within a role, though. Even at organizations that publicly share salary info there is often a wide range within each band and the salary bands may overlap. Paying everyone in perfect lock-step with each other sounds great in theory, but you end up either paying significantly more than you need to or locking yourself out of otherwise great hires that were just a few thousand short of your fixed salary. Obviously, not everyone within a role performs exactly the same.
antisthenes 5y ago
> The biggest salary negotiation mistake I see is when people assume the negotiation is of the first type (one-off, never see people again) instead of the latter type (part of an ongoing relationship). That depends what you're negotiating. As a counterexample, if you negotiate a big raise upfront for your promotion and then "coast" for 5-10 years, you're still better off than negotiating a series of smaller raises every 2 years, because you forego the overhead of multiple negotiations. Personally, I'd rather just focus on the work. Negotiation is costly if you're not good at it. It's easier to justify your value once, than multiple times. Due to anchoring, and people getting used to the increased output you bring, it will become harder and harder to negotiate as you go further. Better to do it once, but do it right.
irrational 5y ago
I prefer the way my company does it. There is no negotiation. Roles are fixed and everyone in the same role makes the same amount of money. If you get hired for a certain role you will make the associated salary and not a dollar more or less.
- gameshot911 5y ago
  That will incentivize me to work only as hard as the lowest-performing colleague in the same role.
  - colechristensen 5y ago
    Which also might be fine. Trying harder doesn’t always lead to more useful work done, you might be better at your job if you’re more relaxed and don’t overwork yourself, and if your motivation of work is to keep up with an image of how other people work there’s a good chance you won’t be as good as an employee who cares about doing work well because they care more about quality than quibbling about fairness. Sometimes people don’t do as much or as well for things that are none of your business and if that becomes an incentive problem for you, you’re the problem.
user_named 5y ago
Do those managers ever self-reflect and give raises to their less polished, better performing employees?

rkk3 5y ago

> The less discussed scenario is when a candidate aggressively negotiates a very above-average compensation but subsequently performs in a below-average manner. This is one of the most common complaint scenarios in a private manager forum that I'm part of: Managers who get wowed by people with excellent interviewing and self-selling skills who end up underperforming their lesser-paid peers later. It generates a lot of guilt and anxiety for managers when they realize they've been duped into inverting the contribution:reward relationship in their compensation structure. Isn't this more a failure of the management? What can justify having wide disparities in starting comp for the same role? Seems like the striving candidate should be bumped up a level & you just hold them accountable to the higher bar, rather than evaluating their performance based on comp.

PragmaticPulp 5y ago
That's the point - If you bring someone in at the wrong level (higher comp = higher level) then you have a major problem. Compensation does vary within a role, though. Even at organizations that publicly share salary info there is often a wide range within each band and the salary bands may overlap. Paying everyone in perfect lock-step with each other sounds great in theory, but you end up either paying significantly more than you need to or locking yourself out of otherwise great hires that were just a few thousand short of your fixed salary. Obviously, not everyone within a role performs exactly the same.

antisthenes 5y ago

> The biggest salary negotiation mistake I see is when people assume the negotiation is of the first type (one-off, never see people again) instead of the latter type (part of an ongoing relationship). That depends what you're negotiating. As a counterexample, if you negotiate a big raise upfront for your promotion and then "coast" for 5-10 years, you're still better off than negotiating a series of smaller raises every 2 years, because you forego the overhead of multiple negotiations. Personally, I'd rather just focus on the work. Negotiation is costly if you're not good at it. It's easier to justify your value once, than multiple times. Due to anchoring, and people getting used to the increased output you bring, it will become harder and harder to negotiate as you go further. Better to do it once, but do it right.

irrational 5y ago

I prefer the way my company does it. There is no negotiation. Roles are fixed and everyone in the same role makes the same amount of money. If you get hired for a certain role you will make the associated salary and not a dollar more or less.

gameshot911 5y ago
That will incentivize me to work only as hard as the lowest-performing colleague in the same role.
- colechristensen 5y ago
  Which also might be fine. Trying harder doesn’t always lead to more useful work done, you might be better at your job if you’re more relaxed and don’t overwork yourself, and if your motivation of work is to keep up with an image of how other people work there’s a good chance you won’t be as good as an employee who cares about doing work well because they care more about quality than quibbling about fairness. Sometimes people don’t do as much or as well for things that are none of your business and if that becomes an incentive problem for you, you’re the problem.

user_named 5y ago

Do those managers ever self-reflect and give raises to their less polished, better performing employees?