1. Prepare what you'll say beforehand.

If you have not thoroughly prepared for the negotiation, you can't negotiate, you can only react.

It is not only important to prepare what you are going to talk but also how you would deliver your presentation. Start by making a list of what you hope to gain from the negotiating process. Rather than limit yourself to financial matters, shoot for three types of benefits: rewards, such as a salary increase, bonus, pension or vacation package; risk-limiters, such as a hefty severance package or a time frame in which you can expect a promotion or performance review; and responsibilities, which give you more authority.

To avoid overlooking things that might come up during the negotiation, have an expert or a friend review what you are going to present during the negotiation.

2. Take control of the negotiating process.

A New York bond trader provided her human resources and unit supervisors with a goal list, including broader job duties and a more flexible work schedule. She also asked for a modest salary instead of the purely performance-based pay she was used to. This put higher-ups in the position of reacting to her, rather than vice versa, and she received her requests.

Likewise, a 48-year-old New Jersey Programmer Analyst was able to create his own position as a Project Manager at his new employer, a Dot Com firm just two years old. A gambler at heart, he'd been seeking a leadership position at an entrepreneurial company where he would have more authority and stock options, benefits that weren't available in his old job as a programmer with a large software company. Listing his goals prompted him to request a severance package and an employment contract this time around. The new company was happy to oblige, since his compensation is tied to performance.

You can get the negotiating ball rolling in your favor by writing a brief letter or memo to your employer or the target company, if you have received a job offer before discussing compensation.

In the letter, outline your key accomplishments and emphasize your past and potential contributions to the company, not what you need or want. That way, you're shaping a perception of your value. This is the time to advertise.

3. Set your price.

The prime asset of any business is a productive work force, and the fact that an employer is willing to negotiate proves it values you.

However, you should expect employers to try to purchase your talent and experience at a discount. That's what employment and compensation negotiations are: a simple "buy-and-sell" matter, and as the seller, you must set an asking price going in.

It is wise to view your time, expertise and experience as expensive commodities so that you set a fair price.

4. Keep it business, never personal.

Even if you admire the person you're negotiating with, remember that it's a business transaction, not a personal exchange.

Separate the salary and employment issues you're discussing from how you feel about your boss or a hiring manager. Remember that the outcome of your discussion will affect your well-being.

5.Use positive language.

Never say "never" or "no" to an employer's offer. If the company is resisting your requests, use neutral-sounding words to describe your position by saying that you find the offer "disappointing," "unfortunate," "surprising" or "unacceptable."

You also might try asking an employer to reconsider its offer, or ask for additional time to consider the terms to keep the door open to favorable changes. The point is to avoid words that make you sound angry or unwilling to negotiate further. The process should continue until you arrive at a satisfactory agreement, unless you blow it prematurely.

6.Consider performance-based compensation.

Requests for greater responsibility are almost always granted, since few people ask for this benefit. In most cases, increased responsibilities eventually lead to an increase in pay. When employers say they can't afford your salary, try suggesting performance-based pay. Many candidates overlook this obvious strategy for winning over cost-conscious employers.

7.Get written confirmation.

Clear confirmation is a crucial element of negotiations that candidates usually forget. But getting something in writing provides closure and prevents any misunderstandings between you and an employer.

Take charge of this process by writing a letter spelling out the details of the deal you've agreed to while they're fresh in your mind. For example, yours might read something like this:

"Dear Nancy, I look forward to our working together. For the sake of clarity, I set down the points of the agreement we reached yesterday. If I'm incorrect on any aspect, please let me know. If I don't hear from you, I'll assume we are in agreement. Sincerely, Tom."

Your letter becomes an equivalent of a contract with invoking the expense or potentially adversarial tone of an attorney. More importantly, it prevents misunderstandings that might result from poor memories, changed circumstances or bad faith on the part of the employer.