Salary Negotiation Tips: Compensation Potential versus Reality

Is there a way to renegotiate when you believe you are under-compensated?


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Q: I’m in a tough spot. I was hired by a small business to sell a very custom product. Led to believe there was great potential, I accepted a base and commission rate that changed every six months, which should have amounted to a number that was satisfactory in the first year. It was obvious by the third month that the potential was overstated. Now in month seven, my employer wants to add responsibility/opportunity from other areas of his business to retain me and attempt to increase sales.

I appreciate his efforts, but I am practically at my bottom-line number now and the new proposed package is much leaner in all areas. The additional responsibility includes selling a service with a sales cycle that is likely to be three to six months at best. I have no immediate opportunities. I had also previously negotiated perks such as a four-day work week and a car allowance. I am paid twenty-five cents per mile at the moment, but my employer intends to remove that. What do you recommend that I negotiate now? I’d like to keep my job, but feel incredibly undercompensated.

A: Every time you turn around your compensation goes down. Twenty-five cents per mile is way less than the IRS guideline at the moment. Your compensation both in base and commission are also being reduced.

I don’t know enough about the company you’re working for to know whether they are wildly profitable are not. If the company is having a hard time making its own profits, it makes it all the harder for employees to negotiate better compensation. If the well is dry, the well is dry. So looks to me like it may be time for you to find another employer.

You don’t need to give up on this completely, however. You want to have the possibility of a discussion with your boss, and you want to do it in a way that leaves the lines of communication open. You can start with trying to find common ground: “I think we are both aware that the targets we had for compensation started out close, but the reality is turning out quite different.” Then you want to state what your ideal compensation looks like, and ask your boss if you can discuss whether there’s any way in the foreseeable future that you can achieve the kind of compensation you’re looking for. If you can turn this into a venture where both of you are working towards getting you the compensation you need, then there is some likelihood that this strategy will succeed.