Salary Evaluation
David McMahon „69
Associate Director
Career Center, Texas A&M University
Types of Employees
Regular Contingent
Full-time Temporaries
Part-time Contract
Workers
Consultants
Co-ops/Interns
Compensation Package
Get the Offer in Writing
Then Evaluate
Pay
Benefits
Intangibles
Types of Pay
Starting Salary Career Salary
Salary COLA Increase
Hourly Merit Increase
Commission vs. Merit Bonus
Fee Profit Sharing
Signing Bonus Stock Options
Benefits
Insurance – Health, Life, Disability
Vacation and Holidays
Education Tuition Assistance
Expense Account, Company Vehicle
Professional Organization Memberships
Benefits
Savings & Retirement
Pension Plan
401K
Stock Options
Questions to ask employers
about their 401(K)
Do you have one?
Do you have a pension plan also?
Do you contribute (match)? How much?
How long you have to work before you can
participate?
What are the “vesting rights” ?
Do you have choices of investments?
(Beware company stock only)?
Intangibles
Location
Industry Outlook
Promotion Opportunities
Responsibilities/Challenge
Travel
Life-Work Balance
Rule of 72 –
Compounding @ 10%
23 $5,000 $5,000
30 $0 $10,039
37 $0 $20,158
44 $0 $40,477
51 $0 $81,274
58 $0 $163,193
65 $0 $327,679
A 10% return on investment will double initial investment
approximately every 7 years. Compound interest is added to the
principle 12 times annually.
Rule of 72 –
Compounding @ 7%
23 $5,000 $5,000
30 $0 $8,150
37 $0 $13,284
44 $0 $21,654
51 $0 $35,295
58 $0 $57,531
65 $0 $93,775
A 7% return on investment will double initial investment
approximately every 10 years. Compound interest is added to
the principle 12 times annually.
Invest Early –
Pay Yourself First
$35,000 $160,000
Lifestyle Matters
A 45-year-old making $100,000 today plans to retire at
age 65. Depending on his lifestyle in retirement, here‟s
how much he‟ll need.
Pre-retirement Nest egg
Income desired necessary at
In retirement retirement
60% $1.96 million
80% $2.61 million
100% $3.27 million
Assumptions: Life expectancy is 90 years, no pension or Social Security;
annual salary increases and inflation average 3%.
Evaluate Two
Entry-level Offers
Base Salary $30,000 Base Salary $35,000
Medical 0 Medical (840)
Parking 0 Parking (912)
401(K) Match 1,500 401(K) Match 0
(10% contribution, match first 5%) (10% contribution, no match)
Perks 2,000 Perks 0
(car, tuition, etc.)
Federal Taxes (7,290) Federal Taxes (8,505)
(27% of taxable income) (27% of taxable income)
State Taxes (2,002)
(6% of taxable income)
Actual Compensation $26,210 Actual Compensation $22,741
Who’s Salary Range
Are We Talking About?
The Six Secrets of Salary
Negotiation
Never discuss salary until the end of the interviewing
process, when they have definitely said they want you.
The purpose of salary negotiation is to uncover the most
that an employer is willing to pay to get you.
During the salary discussion, try never to be the first one
to mention a salary figure.
Before you go to the interview, do some careful research
on typical salaries for your field and/or that
organization.
Define a range that the employer has in mind, and then
define an inter-related range for yourself.
Know how to bring the salary negotiation to a close.
Don‟t leave it “just hanging”.
Source: 2008 What Color is Your Parachute? Chapter 7 (p.115) by Richard N. Bolles
Points of Negotiation
Competing Offers
Salary Surveys/Information
Strong Relevant Experience (e.g. Co-op)
Extra-ordinary Skills (e.g. bilingual, technical, etc.)
Unusually high GPR
Cost of Living Adjustments
Consider a Signing Bonus
Supply/Demand
Bachelor‟s Degree Candidates
By Curriculum And Employer
Salary Information
TAMU Salary Survey
NACE Salary Survey
Professional Associations
Cost of Living Index
Talk to People!
Questions???