Read the scenario:
John and Melissa work for a mid-size bank. John is the department manager and Melissa is his boss. Almost a year ago, John hired Amy in at the low end of the salary range for her position, Consumer Sales Rep. At the time of hire, John told Amy that she would have a performance evaluation after the three-month probationary period and a comprehensive review after one year of employment. At the one year mark, she would be eligible for a salary adjustment.
Amy had an excellent review at the three-month mark and exceeded expectations at her one-year review. Her new account openings have matched or exceeded those of John's two most experienced reps, and the customer comments regarding Amy's service on these accounts have all been positive. John wants to recommend that Amy receive a 12 percent increase in pay. Typically, employees receive a 3 percent increase, although on occasion, a 10-15 percent increase has been approved. The increase that John is recommending keeps Amy within the pay range for the position.
Melissa knows that company policy recommends that employees receive no more than a 5% percent increase in pay. However, Melissa's boss does want to ensure that pay equity is achieved and that employees are paid what they are worth. If Melissa approves John's recommendation, she will then have to get approval from her boss to implement the pay raise for Amy.
Based on the scenario above, consider the following:
Explain the strategies John should use to effectively negotiate the 12 percent increase for Amy.
Identify the challenges that John may face during this negotiation.
If you were Melissa, John's boss, what would your response be to John?
Sample Solution