Salary Negotiations...When You Don't Make a Salary

On a recent episode of NBC's "The Office", Michael Scott took a second job as a telemarketer. In this position he had a salary that was drawn against commission. Now how exactly do you perform salary negotiations in this case? Obviously, your salary will be small to create as little overhead for your boss. And in many of these jobs, your boss will come to you with comments like: "well, I expect you to make $100,000...".

The key is to make it seem like you both are in the same boat. If he feels that you will make $100,000 on commissions, and let's say your commission rate is 1/3 of the fee, then he should expect to make $300,000. If he gives you an advance salary of $60,000 to be drawn against commission, and you fulfill this, he's made $300,000. Let's say you fall 40% short of that $100,000...he still gets back his $60,000...and then another $180,000 on top of it. Even if you fall 60% short of that $100,000 (and, therefore, make $40,000 in commissions), he would still walk away with $100,000 ($120,000 in fees - $20,000 in overhead due to advance not covered by commission). His break-even point (for you math majors is 3x-[$60,000 - x]=0) between making money and the overhead of your advance is if you only make $15,000 in commissions. Now, if that was the case, he would have been off by 85% on his "prediction".

So what do you say? Probably not "put your money where your mouth is" or "put up or shut up"...though you make think it. Link it back to a performance/incentive argument. "Well, I believe I can make $100,000 just as you do. So I think that we should tie our incentives together. I propose an advance of $60,000. Here is the math I've done on the issue (show math from above) and the worst case scenario for you would only occur if I made less than $15,000--I mean, do you really think I'll fall 85% short of both our expectations? I think if we put the advance higher, it will give me more security, but incentive to go the extra distance to get to that $100,000 plateau and it will give you the incentive to help me get there. We are a team and I want to see what's best for this company...let's accomplish that together."

I can't say whether it will work or not...but it's a whole lot better than "put up or shut up"