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I am in the process of interviewing for another job within my company. I am not yet guaranteed a job offer, but it looks promising and I don't believe there are any other candidates. I do expect to need to negotiate a salary soon though. I managed to get one of the HR people to tell me the salary range for the job I am looking at. This begs the question,

Does knowing the potential salary range an employer is willing to pay change how much I should ask for in salary negotiations?

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Ask at the top or more! Your initial ask forms the ceiling for the negotiated value. –  MrFox Feb 12 '13 at 18:11
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@MrFox I wouldn't say more, if you ask ridiculously high they will probably see you as a bad egg for not being satisfiable. But yes, I'd shoot for the top so that when they offer something less it is still high. –  Paul Brown Feb 12 '13 at 18:24
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Rather than explaining your research and offering to settle for less, explain that you've researched the cost of living difference between the location and your current location, and have determined that X is a reasonable salary. If you pre-emptively offer something lower, then their response may just be to try to see how low they can go. Start the negotiation at (or reasonably above) what you actually want, not below. –  Jim Feb 12 '13 at 18:40
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@Chad, thanks for the link; I edited my question to try to avoid duplication. –  AdamRedwine Feb 12 '13 at 20:23
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I can't say if it matters, but there is one key differentiating factor and that's that in this situation, the hire KNOWS the salary range the organization is willing to consider ahead of time. I could see arguments that that does change things a bit, but at the same time, one can also argue that you should ALWAYS ask for what you want/need rather than some other arbitrary figure. –  DA. Feb 12 '13 at 23:06
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2 Answers

up vote 3 down vote accepted

Should I ask for a salary at the top of the range, and if so, how specific should I be, if not, why not?

I'd be careful of taking salary at the top of the range for a couple of reasons:

1) Justification. Are you sure that you are going to be the rock star in that position that justifies being paid the maximum in that range? There is the potential for them to ask why you think you are worth that much to which you should have an answer.

2) Future growth. By taking the top value right off the bat, in future years at that organization, you may be limited in terms of raises by starting out at the top for the position you'd have. While I will acknowledge that if you do plan on moving into a different role a year or two later this is somewhat moot, there is the potential to understand that by going for the top right off the bat, you may get limited raises for a couple of years or more.


The second point is more about the idea that if someone is going for the top of the range and expects raises on top of that, this could be asking for trouble. Some people would rather have the raises and get more emotional satisfaction from that than having more money at the end of the day while getting paid the same each year. Thus, I'm questioning if the person getting paid $100K for 3 years with no raises will be happier than the person that started at $90K and got a 5% raise each year for the next 2 years.

While some people want to make salary be all about money, there is something to be said for what expectations are coming with that money you are getting.

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That's also a great answer. I'm not sure which I like better. The point about justification is a good one; I am confident that I will do very well and that I will be valuable, but I can see how a high salary would put extra scrutiny on me just as I'm coming on. –  AdamRedwine Feb 12 '13 at 20:46
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So, let me get this straight. You ask for $90K rather than $100K when the salary is $105K with the idea that this gives them more room to give you raises??? If you make $100K for 3 years and get NO raise, you still get more total money than if you start at $90K and get a 5% raise every year for the next two years. –  Amy Blankenship Feb 12 '13 at 20:55
    
@AmyBlankenship, I was thinking that too. Clearly the logic behind the raises is flawed, but the point about justification still seems reasonable to me. –  AdamRedwine Feb 12 '13 at 21:03
    
@Amy : The reason why it matters is because at many companies your raise is based on where you rank in the manager's bucket compared to others they manage. If the manager knows that you can no longer get a (good) raise, and because they want to get good raises for their employees, then they will tend to under-rank you compared to others with the thought that it doesn't hurt you but helps someone else (they also like) get a better raise. Thus, when promotion time comes and you are consistently ranked mid-range instead of excellent, that affects your chances of getting that promotion. –  Dunk Feb 13 '13 at 16:53
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Also, at many companies, once you start "topping out", people above your manager start looking at promoting you OR why can't they promote you. If they can't promote you (e.g. mid-range reviews, haven't made much of a name for yourself) that could have negative consequences on your future at the company. –  Dunk Feb 13 '13 at 16:55
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You can ask for it, but here's why it's not a good idea.

When a company defines a salary range for a position, they base it not on just on the market rate, but also on their budgetary forecasts. From the company's perspective, the best place for a new employee to start is from the 0th to the 33rd percentile. This position gives the company an opportunity to assess the employee's talent and contribution. Depending on the overall business performance and the new employee's quality of work, the company has the ability to be more generous at review time. The higher you come in, the less wiggle room they have.

In most companies, once you reach the top of the salary range, they may not give you any more salary increases at that position. They will either have to promote you or you will have to apply for a position with a higher upper limit. In either case, if you go in at the top of the scale, they may not have sufficient justification for the promotion or transfer based on the fact that you haven't been there long enough. You could look at it as if you qualify for the top of the range, apply for a job with a higher salary range.

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That sounds very reasonable. Thanks. I think that is very interesting about the 0-33rd percentile. I have been with this company for almost three years now and the new position is a lateral move just going by the org chart. With a cost-of-living adjustment, I could come in near, but not quite at the top. That seems like a good place to start to me. –  AdamRedwine Feb 12 '13 at 20:43
    
That makes sense at the 'corporate' level but doesn't really seem all that applicable to the 'hiring manager' level. They don't necessarily care about the rest of that. They want someone and they need someone now. –  DA. Feb 12 '13 at 23:07
    
@DA: Have you ever completed an annual budget for a department? Even if the 'hiring manager' wants someone and needs them now, they still have to deal with financial constraints imposed by their executive manager. –  Neil T. Feb 13 '13 at 2:55
    
Sure, though one would assume that was part of the calculations done prior to doing the hire. Your post makes sense from a very carefully thought through, longer term plan view, but often getting a job for both the person applying AND person hiring is a more about the immediate short-term consideration...everyone will worry about promotion issues down the road (for better or worse). –  DA. Feb 13 '13 at 3:05
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If we just look at the hiring manager, unless this is the owner, they are going to have to seek approvals from their superiors for any new hire, including the salary range and any additional benefits the company offers. For those short-term, immediate-need issues, the better option is a contractor. The two parties agree to the terms of the contract, and everybody should get what they want. This is why contractors get paid more than employees: companies are paying a premium for getting the quick capital-based fix to a problem without making the long-term payroll-based investment. –  Neil T. Feb 13 '13 at 4:54
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