While there is very little to be gained in Chinese negotiations in "leaving something on the table" there is much to be won in remaining flexible.  When it comes to candidates in China's talent short market I am constantly encouraging my clients to be more flexible with their job mapping and/or variable compensation schemes.

I am not always encouraging them to pay more in salaries however.  In our current market there will always be another company willing to pay more in compensation and there will always be a candidate willing to move for more money. 

The best compensation schemes are designed to reward top achievers by allowing them to earn more and keep them achieving by giving them more responsibility when they do.

Too many of the foreign firms operating in China brought their US style compensation plans to this market and they are not working. As the market gets tighter these schemes actually lead to salary inflation in most cases.

I found an article by Irv Beiman entitled "Strategy Management & the Talent Contradiction: An Alternative View on How to Catch Mice" - you can check it out here: www.cbiz.cn/NEWS/showarticle.asp?id=2433

In this article he says, in reference to successful Chinese companies like Bao Steel, Qingdao Beer, China Resources and China Union Pay,  that "Most of these organizations have a strong variable pay scheme that drives performance improvement. They do not rely on salary surveys to set their base pay."  

While this does not take into account the need for English skills and the more pressing needs of foreign firms to hire at the senior manager level I think that his observations are very timely to the recruiting community and I am going to pass the information along to many of my clients.