Asking for a Raise


You desperately desire a $20,000 per year raise. The company you work for likes money as much as you do, however, so you will get the raise only if you can convince your boss that it is in her interest to give it to you. But why should your boss give you a raise? Why is it in her interest to be “nice” to you? If you have any chance at getting a raise, you contribute to your company, which would be worse off without your labors. Your best chance of obtaining a raise, therefore, lies in convincing your boss that you will leave if you don’t get the money.

If you simply tell your boss that you will quit if you don’t get the raise, she might not believe your threat. For your boss to take your threat to quit seriously, she must think that it would be in your self-interest to walk away if you’re not given the money. The best way to make your threat credible would be to prove to the boss that another company would pay you $20,000 a year more. (Of course, if you’ve found another firm that’s willing to give you the raise, then you don’t need to read a book on game theory to learn how to get the extra $20,000.)

Another way to get the raise would be to tell everyone in the firm that you will definitely quit if you don’t obtain it. Ideally, you should put yourself in a position where you would suffer complete humiliation if you were denied the money and still stayed in your job. Your goal should be to make it as painful as possible for you to stay if you weren’t given the salary increase. This tactic is the equivalent of reducing your options. By effectively eliminating your choice to stay, your boss will find it in her self-interest to give you the money because she knows you will have to leave if you don’t get the raise.

Figure 3 presents the game tree for this raise negotiation game. The game starts at A where you ask for a raise. Then at B your boss has the option of giving it to you or not. If she does not give you the raise, the game moves to C, where you either stay at your job or quit. There are thus three possible outcomes to the game, and Figure 3 shows what your boss gets at each outcome. Obviously, your boss would consider giving you the raise only if she knew that at C you would quit. So, you need to make your threat to quit credible. You do this either by getting a high payoff if you quit or a low payoff if you stay, given that your raise request was rejected. Interestingly, if you got your raise, then the game would never get to C. Your boss’s perception of what you would have done at C, however, was still the cause of your triumph. Often, what might have happened, but never did, determines the outcome of the game.

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Figure 3




Game Theory at Work(c) How to Use Game Theory to Outthink and Outmaneuver Your Competition
Game Theory at Work(c) How to Use Game Theory to Outthink and Outmaneuver Your Competition
ISBN: N/A
EAN: N/A
Year: 2005
Pages: 260

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