15 Apr
17 Aug
Let’s face it we all want a pay increase. We think we are worth it.
Do you ever find yourself saying – well I work harder than the guy at the next desk.
Or, I get here early, and I leave late so I should be paid more.
Some reasons provided to me for a pay rise include:
I am the only one who can do this job, so I should be paid a premium.
People doing my role in other cities are paid 30% more than what I am getting.
My favourite – “my living away from home allowance should be more than that of a married couple. I need to spend more as a single man going out and meeting women while a married man doesn’t have this expense”.
Not one of these reasons passed the logic test. At any level they failed to incorporate the most basic driver – What value do you bring to the organisation?
If you can’t assess that then it is difficult to make a solid case for a pay rise. In addition, if the work you do can easily be done with minimal training by others then your bargaining power is limited.
This does not mean that you cannot argue for a pay rise – it means you need to find other leverages that will make it compelling for your boss to give you one.
The most important thing to do before you have the conversation is to do your homework.
It starts by finding out who has the authority to grant you a pay rise and when. In large organisations it is very procedural and occurs once a year. Many companies make global decisions on pay rises based on cost of living, corporate performance, market trends etc. You then get what you get irrespective of your performance.
This can be particularly galling if you genuinely believe you have delivered value over and above your peers but have not been recognised for your efforts.
Another aspect of larger organisation’s compensation policy is that they are skewed more positively to the high performers, whom they clearly value, whereas the rest of the staff are commoditised. This is not to say that there is some sort of conspiracy, rather that is the nature of the system.
It is therefore incumbent on you to place yourself in the high performer category. Even in a more low-level role it is always possible to stand out and be a cut above the rest.
Some find this difficult to do. There is a sense of playing politics at the expense of your colleagues. You are likely to alienate some of your colleagues because you are showing them up.
Additionally, some bosses probably find the whole thing too difficult. By paying you more for your efforts they must overcome the displeasure or anger when your colleagues find out you are being paid more.
What may be even more frustrating is that if the workload is increasing and more staff is required, it is easier for your boss to find a new employee. It can be the case that the newbie is payed a higher salary because of market conditions even though your performance is likely to be much better. Note that in a very soft market the opposite can be true – although very rarely.
A friend of mine, acutely aware of these drivers, consciously moved from job to job only based on higher salary. His salary package outstripped those of his former colleagues in a few years – mind you he was very good at his job. Even so he would never have earned such a salary if he stayed at the one company for more than 10 years.
Another aspect to consider is why you are asking for the pay rise. If you are happy working at the company this will affect how you may negotiate. If you are unhappy then you will need to consider if you can negotiate away the issues that make you unhappy - could be a transfer new role, training or new role. If you are seeking a pay rise to compensate for your unhappiness at work you will be sorely disappointed. The joy of extra money is extremely short lived.
Key points to consider:
1. Framing your position
Find out what the salary norms are for your position and benchmark your salary against these. Be clear that the position and work requirements match. It is always easier to get a raise if you are paid in the lower quartile of the range. It is much more difficult if you are paid in the higher quartile unless you are offering something special.
2. List your benefit and achievements
Write down clearly all the things you have accomplished that are important to the department and organisation- the things they value.
This must be about what you have done, what changes and improvements you have made.
Ideally this needs to be quantified: money you have made, saved, or de-risked.
You need to highlight what was unique about what you did that is difficult to do and what obstacles you over came to achieve this.
3. Company process and policy
Understand what the processes are in the organisation for pay increases, who decides and approves. What is fixed what is discretionary. There may be other benefits in lieu of pay that can have a greater impact. Talk to all people concerned, your boss, HR and others who may have gone down this process.
A former colleague of mine was able to obtain a copy of the HR manual and found all the entitlements he could apply for as part of his overseas assignment – he managed a very successful transfer.
4. Determine your ‘walk away’ position
Determine whether you stay or leave the company if you do not get what you want. You don’t need to table this or make any threats. Most managers do not like to be blackmailed.
You may like to look around for a job before you have the discussion if it turns sour. If you have already interviewed with another company, you have a good reference point but be careful to use this directly in the discussion.
I repeat never threaten or make ultimatums.
5. The discussion
Ensure that you feel confident and strong about your position when you go into the meeting. Being nervous and uncertain puts you at a disadvantage and can alter the dynamics. Be friendly and ensure that what you present is truthful and verifiable. Don’t embellish.
Make it clear what you want as a pay rise. Provided it falls with the boundaries it will anchor the position in the boss’s mind.
Make sure you are both sitting on an equal level and that you maintain good eye contact.
Never justify the pay rise because you have extra bills or a sick family member – this is spurious to the company. They can only judge on what you can do for them.
Above all stay calm and unemotional. Think that you are making a point for someone else and remain dispassionate. As soon as you get emotional you lose rational thought and may say and do things you later regret.
6. The response
Your boss will likely respond by outlining what he can and can’t do in the context of company policy and procedure. Listen carefully. If the response to your request is negative, then you need to encourage him to respond to your performance points. Use open ended questions to elicit information on how you can qualify for a raise in the future.
Based on this guidance you can develop a plan to reach specific milestones to improve your results and position yourself for the raise as per policies.
Once this has been agreed then you will need to document the discussion outcomes, and both sign off on the approach. This protects you from failing memories and a change of managers.
Even if your request is rejected if you handle it correctly you have set yourself up for a better position in the future. Your boss knows where you stand and what your drivers are. You now have a measure for success.
If you choose to move to another organisation you have a solid basis to discuss your benefits through your successes and you know what you want as a salary. You should also be able to define career progress with your new company much more clearly. Additionally, if you are offered a job with another company don’t be surprised if your boss makes a matching offer. Be careful and prepared on how you handle this situation – both you and your boss might regret the situation if you stay under such circumstances.
Remember if you never ask you will never know.