Power and Exchange in the Context of Salary Negotiation
One of the most important goals for a majority of Cornell students is finding a job. After submitting countless applications, worrying over interviews, and stressing over rejections, an acceptance offer–any offer with reasonable compensation–is welcome. Once offered a job and compensation package, one could accept it, decline it, or explore a third option–negotiate it. Many job applicants err in believing that when an employer offers a job, the starting salary is fixed. However, this is not the case.
In “Talk About Pay Today, or Suffer Tomorrow”, Phyllis Korkki argues that even during economic downturns, it is important to negotiate salary. A large percentage of applicants fear that by asking for a higher salary, the employer would rescind the job offer and move on to the next applicant. Korkki recommends that all applicants take several days between receiving the job offer and submitting a final decision to “gather salary intelligence”: learn about the position and salary ranges through Glassdoor.com, Salary.com, and Payscale.com. In the process, one can learn one’s true value and “provide the basis for deciding how hard to negotiate” (Kiokki).
The article relates to the concepts of power and dependency in negotiations. As mentioned in lecture, power results from dependency, exclusion, satiation, and betweenness (Easley and Kleinberg 341). In the case addressed in the article, prospective employees assume that they are completely dependent on the employer for a job and that the employer, on the other hand, has multiple sources for value; if one accepted applicant tries to negotiate, the employer would revoke the offer and move on to the next applicant. In contrast, Korkki reminds readers that employers have some dependency on applicants as well; the former is also competing against similar companies for the best applicants, and can only secure high performing employees if they offer a competitive wage.
When illustrating power dynamics in job negotiations, one should not assume that the employer is at the center and all applicants are linked to it without any outside options.
Rather, applicants should keep in mind that they can negotiate wages to receive more compensation and compensation that is competitive by industry standards; they do have outside options and therefore hold some power in the negotiation. Korkki adds that the best strategy is to ask for 10% more than what one wants, and it’s a dominant strategy to accept an offer that is within one’s price range; companies have a limit to how much they can offer and asking for too much would risk losing a job offer that one was content accepting.
Negotiating base salary when starting a new position has lifelong payoffs. It would be a huge loss to employees to forget that in negotiations between employers and employees, the latter holds some power too.
http://www.nytimes.com/2011/05/22/jobs/22search.html?_r=0