HACK 159 Know Your Target, Alternative, and Reservation

When you receive a job offer or are offered a raise, it’s important to be strategic in how you negotiate your salary. If you give a knee-jerk response, you could be selling yourself short. Before responding to the anchor—that’s the initial offer that’s made in a negotiation—consider the following:

• Your target: This is your ideal total compensation, from salary to insurance, 401(k) matching, or vacation time, to any other benefits.
• Your BATNA: This stands for the Best Alternative to a Negotiated Agreement. It’s the next best thing if you can’t get your target compensation.
• Your reservation point: This is the worst-case scenario you’ll accept. If you’re considering a new job offer, your reservation point is most likely the first salary you’re offered. If you’re asking for a raise, you might have a minimum in mind you’ll accept that would keep you happy in your current role. It’s helpful to think about your reservation point before even receiving a job offer.

PREPARE BEFORE BATTLE

Don’t rely on your memory to serve you as you work toward an agreement, whether you’re negotiating by phone or by email. Write down your target, BATNA, and reservation points and list out the factors that are most important to you, including salary, benefits, and other perks that could be leveraged.

And don’t feel pressured to accept an offer up front; employers expect that you’ll need to take a day or two to consider an offer, even if you’ve been negotiating for a while.