Is another job offer the smart way to clinch a pay rise? Gamble and win with this insider knowledge.

Competition is a good thing at auctions and sporting events. But when you’re trying to squeeze more cash out of your employer, experts say pitting another offer against your current job can be a tricky tactic to pull off.

Two years ago, Tara enjoyed everything about her job except her pay packet as a mid-level editor at a publishing company. After asking for pay rises and getting only small annual increases, she began looking around. ‘It was sheer economics,’ says Tara. ‘I knew I could get better money elsewhere.’

A competitor offered her a job. She told her boss she was planning to leave and her company matched the salary. So she happily stayed put. ‘I came out smelling of roses, making more money and staying at a job I knew and liked,’ says Tara. ‘I got to choose from two appealing options.’

Sounds perfect. But was her gamble a smart one? Is getting another job offer a smart way to clinch a pay rise with your current employer? Before you play cat-and-mouse with your manager, sharpen your claws with these tips.

First things first Should it come to this?
Before ‘resorting’ to an offer/counter-offer situation, many experts recommend more straightforward negotiation. Go to reviews armed with concrete facts on what you have achieved and produced, then broach the subject of a pay rise. If cash is hard to come by, talk about payment in kind, such as extra paid holiday, a more robust job title or flexible working hours.

Seek your level
Know your value on the job market. Do your research both inside and outside the company to try to find out what's fair. You could check out the job pages of newspapers or trade publications to establish the going rate. An unusually high offer from elsewhere may be unrealistic for your company to match because of budgets or the ripple effect (word gets out and everybody wants more). They may really want to keep you but simply can't. So do some research and find out what's reasonable.

Weigh up your options
Be prepared to leave. Basically, you're giving your boss an ultimatum, no matter how nicely you put it. So there’s every possibility that she might not like it. If you're not happy with leaving, then don't pretend you are.

The boss's reaction
Handle with care
Your boss's reaction has a lot to do with how you approach her. Be firm, but not adversarial. Try saying something like, ‘I’m really happy working here, but I'm tempted by this other opportunity and the salary they are offering. What can you tell me that will help make me feel better about turning them down?’ This opens up the dialogue in a straightforward way, and lets your boss take the next step.

Be prepared for the big chill
Your company may rise to the occasion and cough up the cash, but may resent being manipulated and some feathers might well have been ruffled. Many people come out smelling of roses, but watch out for the thorns too. Keep your dealings to yourself to avoid provoking jealousy or competition among colleagues. For advice, talk to people who aren’t associated with the situation.

They give, then they take
After the counter-offer, you may be expected to perform better than ever. That's what happened to Julie Wantham, a 29-year-old Web Designer. ‘My workload definitely increased. I got the feeling they didn't want me to get something for nothing,’ Wantham recalls. She was prepared and, because she had felt somewhat unchallenged, launched enthusiastically into the work.

On the other hand, if you've already been shouldering a heavier workload in the hope of getting a pay rise, be sure to highlight this point when negotiating. Remind your boss that your job has attracted more responsibility since you started and that you feel that your valuable contribution to the company is no longer reflected in your salary. This is also an opportune moment to go for a bigger, shinier job title.

Don't go breaking their heart
‘When someone comes to their employer with a job offer from elsewhere, it's not a great sign. Not only does it show they aren't happy, but some may see it as a sign that they aren't the most loyal of employees,’ says Bob Nelson, author of 1001 Ways to Take Initiative at Work. You may not have been pounding the streets with your CV (in fact, the job could have landed in your lap through a friend of a friend), but your manager may perceive otherwise. Your best bet is to meet with your manager at appropriate intervals and speak about your skill, experience and, therefore, salary so that getting to this ‘counter-offer stage’ is a last resort. A final word about loyalty: while employers value it, they are in business and it's always advantageous for them to get you as cheaply as possible.

Two cold hard truths
Few people are indispensable
‘As heartless as it sounds, a lot of people out there would want your job and could probably do it,’ says Nelson. Some employers would rather start afresh with someone new rather than keep you around. Take a hard look at your contribution to the company, before giving them an excuse to let you go.

Good help is hard to find
Finding replacements can be time-consuming and expensive, so bumping up your salary might be a small price to pay compared with the outlay in time and money to replace you.