This is not a poker entry, since I didn’t play any poker last night. But I think it’s a concept worth discussing, particularly for anyone who’s gainfully employed in our (pseudo) free-market society.
In a prior life, I was Director of Business Affairs for a major record label. Back when record companies held a significant advantage over the artists with whom they contracted (i.e., before technological advances allowed artists to effectively record and distribute their own product without major label funding/resources), there was a clause that would appear in many types of agreements called a “matching right”. This right would essentially allow a label to match any deal offered by another entity, and the artist would be forced to take the deal, rather than contract with the new entity. (A similar concept in sports is restricted free agency, where a player would be forced to remain with his current team, provided that current team is willing to match any third-party RFA offer received by that player.)
Employers take advantage of an implied matching right with respect to its employee base all the time. The expectation is that if an employee is dissatisfied with his/her current compensation, that employee will at some point voice this displeasure, and give the employer an opportunity to consider an appropriate increase in wages. Further, employers often anticipate that an employee will communicate a competing offer prior to accepting same, in the hopes that the current employer will match the offer in order to retain the services of the employee.
Any employee who allows his/her employer to take this approach is, in effect, allowing the employer to potentially undercut that employee’s fair market value compensation. If an employer knows an employee’s services are worth $80/hour, yet that employee will accept $70/hour, what’s the incentive to pay the additional $10/hour – if the employer knows it will be provided with an opportunity to negotiate before the employee leaves to join a competitor? There is no incentive for the employer to do so.
So how does an employee combat this? Well, one way is make sure the employer knows it is not getting a matching right. Doing this in something other than an antagonistic manner can be challenging, but I find that the issue is best addressed during a review period. Generally speaking, when a modest annual compensation increase is communicated to an employee in an annual review, the employer is usually looking for some form of feedback as to employee’s level of satisfaction with that increase. The optimal response is to remain silent. Pretend that you’ve just moved all-in on a bluff, and are now staring emotionless at the chips piled at the center of the table.
When prompted for a response, with something along the lines of “given the economy, we feel this is more than a fair increase; how do you feel about it?”, you might consider responding with something to the effect of: “Thanks, I appreciate your candor. If that’s what xyz corp perceives my worth to be, then I will continue to remain for as long as I’m in agreement with that assessment.” And let it go.
The employer might ask for an explanation as to your meaning, to which you might respond with “Well, this is ultimately a free market, and the market will bear what the market will bear. I’ve never believed in trying to negotiate pay increases with a current employer, as I think a company should be entitled to assess the value of its employees as it deems appropriate. So if I’m not satisfied with your perception of my value, it’s ultimately my responsibility to make a change, instead of asking you to reconsider your assessment. And I’m really OK with that.”
At this point, you’ve effectively put the employer on notice. If they value you, they are not going to take a considered statement like that lightly. The bottom line is, never name your price, and never communicate satisfaction with your compensation level. Otherwise, you’ll never know how much money you might be leaving on the table...
