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Negotiating your salary - is there a right way to do it?

You've made it!!

You've got the job and the interviewer has called you for the final discussion. But your exhilaration is certainly tempered by the fact that there is still one hurdle to cross - that of closing the deal - the crucial aspect of negotiating your salary.

Most of us feel very uncomfortable when the subject of salary comes up. But negotiating your salary and doing it well is very important as:

  • It affects your self-image to some extent

  • It affects the value you have placed on the job and the organisation
  • It always pays to start out positively at your job
  • You feel cared for by the organisation
  • You are bonded to the organisation because you have negotiated well and have got a fair deal.

What is a fair deal?

A fair deal depends on the match between the salary promised by the employer in relation to other factors such as

  • the position for which you are being considered
  • the geographical location (linked to the cost of living)
  • the changes that you need to make on account of this job (relocation etc)
  • your current market value

In case of most organisations, the salary will be directly linked to the position. However it is still advantageous for you to negotiate as:

  • each position may carry only a range of cost to the company(CTC) and the exact point in the range will be decided based on negotiation.
  • Depending on how badly the company needs you, they may make exceptions in perks, only if you negotiate.

Hence if the negotiation process is essential to get the best deal, you may plan for it.

Plan your negotiation strategy


  • Evaluate your skills

  • The first step is to realistically list down key job skills.

  1. Skills perceived by you as important for the job.
  2. Skills perceived by the employer as important.

  • Based on the above information, evaluate and determine your hot skills i.e. skills that add value to your ability to perform well at the job. The higher the value-added skills, the higher the leverage you have during negotiation.

  • Research salary range before you begin interview process.

  • You can find out the salary range by networking with your friends (find out what they are being paid) for similar jobs at other organisations, check out the salary surveys (Business India in the Indian context), compensation data from Web sites, cost of living surveys etc.

  • This should help you fix a similar salary range based on facts. A clear idea of what you will be willing to settle for facilitates your ability to win over the employer in understanding your demands for a fair salary.

  • What are your salary requirements?

  • Break down your present salary into its various components.

Salary Components

Before taxation

After taxation









Total Salary


  • Compare salary before and after taxation for a realistic picture.

  • Take a look at your own monthly cash requirements. Include fringe benefits, savings and contingencies in your budget plan calculation.

  • While determining your future salary, make a realistic estimate by matching paying capacity of the organisation, last drawn salary, your relocation costs (cost of living demands etc) and actual requirements.

  • Communication Strategy

  • It is important to plan the words you intend to speak. Your communication style must reflect that your focus is on the job and not on the compensation.

  • Avoid haggling over money. Indicate your confidence in the organisation to give you a fair deal.

  • You must be effective in communicating your clarity in understanding your worth because of your ability and willingness to deliver the employer expectations.

We have now discussed the various steps in your negotiation process. For further guidelines on effective salary negotiation, click on to our next section.

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