To illustrate my point, I will give you an example.
Let's say market range for a position is 60K - 80K. To me, that means that the best people are getting 80K to start with and those who are really good at what they do and have been in the same company for some time can be making up to 90K for the same job.
So, if someone comes off the street and asks me for 96K for that same job, it is going to look a little bit off. It tells me a few things: they do not know what is actually going rate for their job or that they have been overpaid in their previous position, or that they are pushing to see how far they can go, or that they don't actually want 96k, which goes against the original point of being honest.
My point is, none of the thoughts that pop into my head are positive about you. And I am not sure that it is the message you want to give a potential employee.
The fact that salaries in the 60-80k range come to mind in discussing compensation suggests that your company does not attract good talent and so the discussion of top of market doesn't apply to you.
The reason is that, in 2012, 80k is a fair starting salary for a developer fresh out of a good college with no experience. It is not the top of a range for people with experience unless the company is third rate, pulling from the discards that couldn't find work at a decent firm.
As far as the situation goes with being able to tell whether someone is in the top 10% or so, that's pretty easy since bottom 90% can't code at all and fail at fizz buzz. Slightly more tricky is separating the top 1% that are really good from that top 10% who can develop and design at all. Distinguishing these two levels of competency is easily and accurately accomplished by an interviewer who is a competent developer himself. And yes, it is much better to pay the top rate for the small number of developers that are competent and efficient rather than pay a few percent less than that for people who can contribute little to a project, which is unfortunately the case for most of the talent pool.
The fact that salaries in the 60-80k range come to mind in discussing compensation suggests that your company does not attract good talent and so the discussion of top of market doesn't apply to you.
Numbers I used do not reflect the salaries I pay. Such is the definition of an example. Also, at no point did I say that these are examples of developers' salaries.
I actually purposefully used the example so far removed from developers' salaries because geography and availability affect the range. And I did not want to get into what should the salary actually be, since it was completely irrelevant to the point. So, instead, I used numbers I can quickly do in my head, if you are really goint to quibble about this.
If the market range for a position is 60-80K and a guy asks for 96K, it is very common to think "Is this guy perhaps worth it?".
I say this from experience. I asked 100K for a job and the company came back to me turning it down and stating they only have 60-70K allocated for it. I countered with 90, told them how I am different from the other candidates, and got a favorable offer ... too bad it was a few hours after I had just accepted another offer.
Exceptions are always possible. If you can make the arguement that it is the case, then by all means. That would be the point of negotiation. If I call you on a discrepancy and you have a proof that you have specific expertise that are worth the difference, the ball is then in my court to evaluate if we want to pay for it and if it is indeed worth it.
However, even if I determine you're worth it, I will counter with a trial period and say (in writing) that you will get your top offer when and if you prove your worth to me and to the company. I am curious to know how would you react to that type of counter, if you don't mind sharing.
The original comment, though, lead me to believe that the poster does this as a rule, asking for 120% of the top and expecting to get 90%. And while it is often the case that these hiring managers do play the game, I am merely drawing the attention that there are people out there like me (albeit probably not very common) who are not going to look favourably at ridiculous salary requests.
I can't help my gut reaction. I do, however, make room to change my mind and if there is meat behind your request, I will readjust my thinking. If I catch you in a bluff, however, because you think it's what you're supposed to do...outcome - not so good. :-)
I'm not the person you asked, but I employ a similar strategy as them, and I'd be happy to accept your offer of a trial period.
Remember that the negotiation is the 5-minute tip of the iceberg. I try to build the negotiation by knocking your socks off at every point of contact, using whatever resources I can muster. (Want to see code? Then I'll apply all the professional spit 'n polish. Want me to present something to your team? Then I'll consider all angles, including business angles and software engineering analysis, trying to make it as intellectually interesting as possible.)
If you give me the chance and a premium, I'll continue that game to your trial period. (Though I'd maybe try to slip in a higher number, because I'm assuming more risk. ;)
But yeah, if you accept my first offer immediately, then I'll feel I've failed at negotiating. (I believe there's something absurd and horrible about the whole situation, but that's the madness of a market economy, with its built-in antagonism between buyer and seller. Graeber's _Debt: the First 5000 Years_ explains why so many people are repelled by salary negotiations.)
Pulling all stops and going above and beyond is what I would expect. I would also expect you to slow down the effort after the trial period.
However, if you prove with all the stops that you are worthy of the premium, I will know what you are capable of when push came to shove and that is what makes you worth it.
Yeah, that's a likely thing to expect, though I hope I'm personally not the kind who likes to slow down (unless I was truly going at an unsustainable pace ;). I like to think I'm motivated by excellence, though of course that's for others to decide.
This can conflict with most management styles, those which favor uniformity. Hence my choice of companies I work with.
Well, if you work is top of the market, your average base will be higher to begin with. It is already factored into the market avg.
The 10-25% flexibility is something you can extract purely from negotiation IMO.