Negotiation Skills — The Salami Technique

Some negotiators just love to play tactical games. In this article we will look at one their favourite negotiation tactics – the Salami technique – and think about how to rebuff it.

Salami sausages are big things (often spicy) that are eaten a slice at a time. They would be indigestible if taken in a single large piece. This aspect has led negotiators to use the name for a negotiation technique that tries to do just that: to win concessions in small doses (slices) when the other party would probably reject them if they were put on the table all at once. The technique is often used against a party that is mainly concerned with damage limitation.

Consider a tough union negotiating with management. Management would really just like to keep the status quo (damage limitation) but the union negotiators would like a whole host of goodies to take back for their members. These could include a pay rise, more holidays, flexible working hours, private health membership, better pension arrangements, improved canteen, increased allowances and so on. It is not difficult for the union to make a case for each of these and they can probably add to the list.

If the union negotiators use the salami tactic they will present just one of their demands for discussion and push hard to reach agreement. Let’s say they focus on a 6% pay rise and after a long discussion and some haggling they agree on 4%. Deal done, except there is more to come. That’s just the first slice of the salami and there is a whole sausage in the cupboard.

The next slice might be the holiday arrangements. The current 23 days is from a bygone age. ‘Other employers’ have agreed to 25 days plus public holidays. Let’s say they eventually reach agreement at 24 days this year and 25 days next year. Good! The managers might by now be congratulating themselves on their rusty negotiation skills and their damage limitation but the union representatives have been busy polishing their negotiation skills.

‘We would now like to discuss something that is very dear to the hearts of our members, the need for flexible working hours.’ The slicing of the salami sausage continues: private health, pension, canteen, allowances, and so on. By the end of the negotiations, when the management team add it all up they are staggered at what they have conceded, slice by slice. None of the individual items seemed all that great at the time but – add them all together and the cumulative effect is astonishing.

What went wrong?

The management negotiators were beguiled by one of the standard tactics used by skilled negotiators. Of course, presented like this, the salami technique looks so obvious that you might think that no management team could be so stupid as to be caught by it. However, just as a simple magic trick can seem incredible when performed by a skilled magician, so even simple negotiation skills like the salami technique can produce amazing results when used by skilled and experienced negotiators.

The salami is not restricted to management-union negotiations. Any negotiator who has a list of things on which they want to gain agreement can use it. Try it when you next buy a car. Are you buying just one item, the car? Or are you gaining agreement on several things: buying the car, filling the petrol tank, replacing worn tyres if it’s a used car, a free service next year, alloy wheels… and whatever else you can think of. Will they lose the sale over a tank of petrol or one new tyre?

So, what do you do if you are on the receiving end and the other party tries to salami you?

Of course, your first line of defence is to recognise what they are doing and your second is to put a stop to it. You will need to be assertive about this but the response is quite straightforward. The salami tactic works because the person being sliced does not recognise what is happening. Once you do, you can fight it.

How? Simply refuse agreement on any one slice until you have everything out on the table. ‘Is there anything else you want to discuss as part of these negotiations?’ Do not discuss details until you have formally agreed that everything is out in the open. Then put forward a proposal on a collective agreement — bundle the lot together.

The discussion can now begin in earnest and you can use your negotiation skills. You might trade one slice of salami off against another by offering some flexibility on, say, item one provided that they drop, say, items two and three. Continue like that until you are happy with the deal, then close.

Good luck! And watch out for that spicy sausage!

Author: Tony Atherton
© Tony Atherton 2005)

How To Negotiate Your Salary and Get Paid What You Are Worth

Salary Negotiations Tip #1: Know your value and be able to clearly articulate the returns that an employer can expect from hiring you. Never forget that as an employee you are investment. When a company hires you, they are making a financial investment through the compensation and benefits that they provide you (as well as many other expenses involved in hiring), and they are doing so with the expectation that their returns on that investment (ROI) will be greater than the cost. It is up to you to know what your worth is, to make sure the potential employer is clear on what that is, and to make sure that they pay you the best possible price for your contributions.

Action Step: Document 6-12 of your most impressive career achievements. Jot notes about the challenges and problems that you were facing, the actions you took to meet those challenges, and the results of those actions. Now quantify those results. Dollar figures or percentages of increase or decrease that represent dollar figures are often the most powerful way to present results. But, even if you don’t have dollar figures, there are often other quantifiable measures that you can use to express the value of your contributions and achievements in the workplace. Now, review all your success stories and practice until you have committed the details of each to memory and are comfortable discussing all aspects of them. These are the stories that you will use during your interviews with companies, to establish and illustrate your financial worth and your proven ability to deliver a strong ROI to your employers.

Salary Negotiations Tip #2: Wait until the right time to talk about salary with a potential employer. Wait until a job offer has already been made. When a potential employer brings up salary prior to a job offer, it is almost always for the purpose of screening you. Before the job offer, if you answer a salary-related question with an actual dollar amount and you give a figure lower than their range, believe it or not, you are likely to be screened out. Why? Because the employer may think that your low amount indicates that you are not capable of handling the responsibilities of the position. And sadly, even if you do make the cut and eventually win a job offer, your salary offer will be held down by the low-ball figure you mentioned too early in the process. If you mention a figure that is too high, you will also be screened out. At this early stage you have almost certainly not had the opportunity to establish your worth and value to the employer. So wait…postpone discussion of salary until you have a job offer.

Action Step: Think of ways that you might respond to questions about salary and practice saying them out loud until you are comfortable doing so. You’ll want to find your own natural words for this, but here is one suggestion for postponing when you are asked that inevitable question: “Salary? If I’m the right person for the job I’m confident that we can come to an agreement. Before we discuss salary, let’s make certain that I am the right person.” Or, “I’m sure you pay a fair salary, and I clearly understand that I need to make you more money than I cost, so I’m sure that when the time comes, we can come to a fair salary agreement.” You could soften either of these statements with a preface statement, such as “I’m very interested in this position and I’m a little concerned that a discussion of salary at this point could screen me out or box me in…”

Salary Negotiations Tip #3: When you are offered the job, and it is time to talk salary, let them talk first. If you have been offered the job and have now been asked about salary, just respond with a simple: “What range did you have in mind?” If you have accomplished what you set out to do and have clearly established your value and worth during the interview stages, you should have a fairly easy time getting the employer to state either a salary figure or range. Now, put a look of thoughtful consideration on your face, and restate the figure or the highest figure of the range with a question in your tone. In other words, say something like “Hmmm…$50,000…” – and then, just be quiet and look thoughtful.

Action Step: Prepare yourself mentally to be comfortable with silence. Know in advance that the silence is necessary and a key part of your negotiations. If you must, keep tally quietly in your head for a count of 30. The most likely outcome of your silence is that you will make the employer slightly nervous that they will lose you as an employee and all of the benefits that hiring you will bring them. Don’t be surprised if, in response to your silence and thoughtful stance, the employer proactively raises the offer before you even have a chance to say anything.

Salary Negotiations Tip #4: Be prepared with market research. With the Internet, you have numerous resources available to determine the salary ranges and all the related salary statistics for people who do the type of work you do in your geographic area. Use the resources available to you and be armed with the facts when you enter salary negotiations. The salaries that others are making are just one piece of the puzzle, but these statistics are an important piece of the puzzle. Having printed research from reliable sources that you can reference to support your desired salary during negotiations, and to help you realistically evaluate job offers that have been made to you, will be invaluable at this stage of the negotiation game.

Action Step: Go to the Internet now and Google “salary research.” Spend an hour or so researching, compiling, and printing salary research relevant to your situation. Be willing to pay for a comprehensive salary report. It will be money well spent and it will give you the ability to respond confidently to a job offer and associated salary offer with a researched response. If the offer made is just what you were hoping for or higher, go ahead and seal the deal. But, if it is a little low, you now have the researched knowledge to respond with a sincere “From my research, I estimate that positions like this for a person with my qualifications pay between X and Y. What can you do in that range?”

Salary Negotiations Tip #5: Remember that monetary compensation in the form of a salary is only part of the deal. What other benefits and perks might be important to you? Once you have come to an agreement with the employer on an actual salary figure, it is time to continue your negotiations to win an offer complete with the benefits that are most important to you.

Action Step: Take some time right now to think about the benefits that would be important to you. Take out a sheet of paper and list them so that you are prepared to discuss and negotiate them when the time comes. Examples may include sales commissions, performance bonuses, insurance, vacation time, a flexible work schedule, professional memberships, expenses for relocation, investment programs, use of a company car, special training or education benefits, and company discounts.

Home Based Business – Online Business Models

Affiliate Marketing

This is one of the quickest, easiest and cheapest ways to get started in an online business. Affiliate marketing requires very little technical expertise to get started. You can realistically get started without having a website. This model also requires the smallest investment.

Physical Product Sales

Selling physical products online is considerably more involved. It can be profitable, but requires a large up front investment and a significant amount of time to run. I am including selling on auction sites in this category.

Services

You can market virtually any service online, but services that don’t have to be delivered locally are best suited to this model. If you are a web designer, graphic designer, writer, photo editor, software developer or something of that nature you can sell your services online either through your own website or through a freelance site such as oDesk.com or Elance.com.

Selling services can be a fairly quick and inexpensive way to generate income online. The downside is that you are trading time for money and your income is restricted to the number of hours you work.

Digital Products

If you have expertise in some area you can create your own product to market online. It could be an information product, photographic art, software or any other product that can be delivered online. The investment and set up time can vary greatly using this model.

Subscriptions

The subscription based model generally involves charging a fee in exchange for access to information, a web based application or entertainment. The setup time for this model can be extensive, but the residual income can be significant.

Advertising

This model can be employed with a relatively low start up cost, but you have to be patient to see results. It takes time to generate a regular flow of traffic large enough to see any real income from advertising revenue.

This kind of business can be set up easily using ad server platforms like Google AdSense, Kontera or Chikita Mini Malls. These are known as contextual ad servers and will place ads on your website that are related to the content of the site. It is very easy to set up, but requires a very large amount of traffic to generate any significant revenue.

The alternative is to sell ad space directly or through an advertising broker. You can rent out the space on your website for a monthly fee or on a pay per click or pay per impression basis. This method takes longer to set up and requires more ongoing maintenance, but can be more profitable.

Network Marketing, MLM and Direct Sales

These business models, while different, are related enough and run in such a similar fashion that I just combined them into one model. The starts up costs vary widely as does the profitability of this model. Usually the main goal of each of these models is the same: lead generation and communication. Most of the good companies provide the websites and product fulfillment freeing up the business owner to focus on marketing.

To learn more about home based businesses and, especially, online business, visit my website. The link is located below.