Exercise 23

SALARY NEGOTIATIONS
NEGOTIATION 7e
LEWICKI ▪ BARRY ▪ SAUNDERS

Confidential Role Information for Employer, Scenario 1A

You are Vice President of Finance at Ace Company. During a time of crisis 18 months ago, you had
promoted a member of your office staff to position of “Acting” Accounts Receivable manager of the
Midwest Region. (Accounts Receivable manages all of the money owed to a company by various
customers, suppliers, etc.). In doing so, you discounted the young age and inexperience of this
individual because the previous Accounts Receivable manager had quit and you were desperate. In
time, the word "Acting” had been removed from the title, and the new manager asked for a raise.
You had said, "Let's see how this works out. After all, you are pretty young and inexperienced for
this job. I don't have any doubts about you handling the job, but I would like to wait. If you are able
to handle it, we'll take care of you."

This individual started the job at $48,000, which is the same salary he earned before you
promoted him. This employee is the lowest-‐paid Accounts Receivable regional manager, and earns
about $12,000 less than the average of the other five regional managers. Every time that the
subject of a major raise has come up, you have used your skill to play on the awe that this manager
still holds for the early promotion as the argument to justify the giving of a lower raise. It's almost
been a game with you. Regardless of the issues at hand, you enjoy being a “tough nut to crack,” and
usually play that role to the hilt, just for the pure fun of it.

The Midwest manager is an excellent worker; in fact, your bosses have talked about this
individual as a ‘rising star’. If this manager were persistent to the point of making a credible case
for why (he) deserves a raise, you would probably give in eventually. As part of the “game,” though,
you make it necessary for every such concession to be dragged out of you. After all, it’s only right
that others “sweat” a bit to earn what little they will eventually get.

The manager currently makes $50,000 a year, and is still the lowest paid manager in the
group. You previously met with this person a few days ago, and after hard negotiating, you were
able to settle on a raise of $3,500. In your eyes, you "won" this negotiation because you did not
have to pay him more to raise him to a higher level.

Today was the office party, the day when clerical and office staff receive their "bonus
checks" of up to $2000. Managers (including you and the six Accounts Receivable managers) do not
receive bonuses, but instead, their reward is reflected in salary increases. The Midwest manager,
sporting an unhappy face, is now coming towards you! He asks you for a private conversation, and
you tell him to come to your office in 30 minutes.

Take a few minutes to review these facts and devise a strategy for managing the discussion
with your Accounts Receivable manager about a pay raise.