Question

Sarah has been a shift manager at a local restaurant for several years. Over that time, her responsibilities have increased but her pay hasn't, and so she wants to sit down with her boss and discuss a raise. Her boss has said that Sarah is saving him $15,000 a year by taking on the extra responsibilities. Sarah is currently making $25,000 a year and would accept a minimum raise of $5,000 per year. a) If Sarah assumes that her boss is being honest and doesn't have any other alternatives, what is the range of possible outcomes in terms of final salary that she should expect from her negotiation?

Answer 1

Sarah's final salary after negotiation should be expected between $30,000 and $40,000, which reflects at least the minimum raise she would accept ($5,000) up to the total additional value ($15,000) she provides to the restaurant annually.

Step-by-step explanation:

Sarah is attempting to negotiate a raise for her position as a shift manager at a local restaurant. Based on her boss acknowledging that she saves him $15,000 a year and her current salary of $25,000, the range of acceptable salaries post-negotiation would be her current salary plus her minimum acceptable raise to any amount up to the additional value she provides ($15,000). Therefore, the range of possible outcomes for her final salary after negotiation would be $30,000 to $40,000 annually, assuming her boss agrees to give her at least her minimum requested raise and potentially up to the full value she adds.

For example, similar to how an employee would experience a 20% salary increase from a raise of $2 per hour on a $10 per hour wage, Sarah is seeking at least a 20% ($5,000) increase from her current pay. The negotiation could result in a greater percentage increase if her boss decides to compensate her closer to the full $15,000 value she adds to the business. This aligns with creating SMART goals for salary objectives, where one sets specific, measurable, achievable, relevant, and time-bound targets for compensation.