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SECURE THE JOB YOU WANT & EXCEL
chapter 29
asking for a raise
 

The groundwork for being able to ask for a raise starts when you are first hired. At that time, you should ask what is the salary range for your position and what are your organization’s practices regarding performance reviews and compensation. For example, are people in your position eligible for annual bonuses or any other form of incentive compensation and, if so, how are they determined and when are they usually paid.
In many situations, your starting compensation is not as important as what you will likely be earning after 12 months given reasonably good job performance. Similarly, it may make sense to take a relatively low-paying position if it enables you to join a fast-growing, highly successful organization where there will be many opportunities for promotions.
When you are first hired at any organization, it is critical to obtain a clear understanding of the performance expectations of your supervisor for your new position. The more you can fully understand what is really important to your supervisor and the organization, the better you will be able to direct your efforts at work.
At the start, you should also ask if it would be possible to have an initial job performance review three months after you are hired, if it is not already the policy of your organization to do so. This is to review how you are doing in your job, not your compensation.
In the interview for my first job after graduating with a Harvard MBA degree, the principals at my prospective employer asked, “What is the average starting salary for your graduating class?” When I answered, they said: “Fine, we’ll hire you at half that amount. Initially you won’t be worth much to us until you’ve gained some experience, but we’ll agree to review your performance and compensation monthly after you start.” Since the principals had an excellent reputation and the firm was growing rapidly, I readily agreed to those terms and commenced work there. Within ten months, my salary was 200% higher.
Regardless of the circumstances, you have to play the lead role in taking the necessary action for maximizing your compensation and other related job benefits consistent with the level of your work performance. The reality is that “fairness” of compensation does not necessarily happen automatically. In many cases, you have to strive to achieve it in a firm and assertive manner. This means speaking up for yourself and your accomplishments.
Reasons for a Raise
Unless you are part of a union, raises have to be earned. Just showing up for work and meeting average expectations for your position are not good enough in today’s competitive, demanding environment. Similarly, just because your organization is doing well is not a reason to ask for a raise.
The best justifications for getting a raise are demonstrating consistently superior job performance, experiencing a major increase in your work responsibilities, or obtaining a promotion. Unless you are working in a high-inflation locale, the fact there has been an overall rise in the annual cost-of-living index represents a weak justification for a pay increase.
Influencing Factors
Apart from your individual job performance, three other factors usually heavily influence your ability to obtain a raise. The first is the quality of the image or reputation you establish within your organization. Are you perceived as someone who under-promises and over-delivers or the reverse? How effective a communicator are you, verbally and written? To what extent are you regarded as being a hard worker, a supportive team player, and a contributor at meetings? Do you impress people by keeping “cool and calm” under pressure? Conversely, do you waste time gossiping with co-workers and on personal telephone calls.
The second factor is how you are perceived by other senior people apart from your immediate supervisor and by the other departments and divisions within the organization with which you have regular contact. Do you respond quickly and effectively to their demands and service requirements? Do you conduct yourself in a friendly, professional, supportive manner outside of your own department.
The third influencing factor is the current and forecasted financial performance of your organization and, to a lesser extent, the economic outlook for its industry or sector. If your organization is experiencing major financial losses and is in the midst of numerous job layoffs, you need to take this into account. The same applies when your industry or sector is headed for a prolonged serious slump that will adversely affect your organization. These are not reasons to hold back from having a discussion of your performance and compensation with your supervisor but they definitely should temper your request for any increase in pay.
Timing
Depending on the compensation practices of your organization, it is usually a good idea to request another meeting with your supervisor to discuss “how you’re performing in your job” after you’ve been with the organization for six months. If you sense you are performing significantly above expectations, you may be justified in asking for a raise at that time.
Certainly, after being in a position for twelve months, it is appropriate for you to request a meeting with your supervisor to review your overall job performance and compensation if such a meeting has not already been scheduled. Ideally, this meeting should take place in a location and at a time when the two of you can have a quiet, uninterrupted discussion. At the start, if your supervisor appears to be pressed for time and stressed out, propose that your conversation be continued at a more convenient tim.
Obviously, if your organization is experiencing a crisis or has just announced a major round of layoffs and other austerity measures, it usually makes sense to wait for things to settle down before asking for such a meeting. Similarly, you have to be sensitive to your supervisor’s own frame of mind and work pressures.
Most organizations follow an annual budgeting cycle. Find out when this takes place. The best time to request an increase in your compensation is one to two months prior to the start of budget preparations, not after they have begun.
Preparation
Like any form of negotiations, your success in asking for a raise is going to be largely determined by the extent of your prior preparation. Do not ever assume your supervisor knows all about your achievements or contribution to the success of your department or organization.
Make a written list of your job accomplishments since your last compensation review, ranked in order of importance. Quantify them wherever possible in terms of improvements, increases, savings, customer service levels and productivity. Include the results of any special projects which you initiated or contributed to their success. Compare your actual performance against your supervisor’s original stated expectations. Avoid any vague, generalized statements. Do not take credit for the work of other people.
Get an objective assessment of this list from a friend or associate outside of your organization. Consider giving your supervisor a copy of this list of accomplishments two days before the scheduled meeting to review your performance and compensation.
Attempt to find out what your position is worth in the current job market and within your field or industry. Research compensation surveys, comparative salary levels and job listings available online at such Web sites as www.monster.com, www.hotjobs.com, www.salary.com, www.salaryexpert.com, www.indeed.com/salary and www.payscale.com. Try to determine as much as you can about the range of pay and benefits available for people performing your type of work with your level of experience in the same geographical market.
Formulate your salary or wage demands based on what you think you can justify. Up it by another 10-15% to give yourself some room to negotiate. Also, prepare a written “wish list” of all of the additional job benefits and special work arrangements that you would like to obtain, consistent with your understanding of those available to others, including people at the next highest one or two levels in the organization.
Be cautious about discussing compensation matters with your colleagues at work. If you decide to do so, make certain it is done on a strictly confidential basis and never reveal to your supervisor that you have had such discussions. When there is a risk that any of your co-workers may disclose this fact themselves, avoid talking to them about compensation.
Anticipate your supervisor’s reactions and objections to what you plan to ask for. Develop answers to help you overcome them.
Negotiations
The time to engage in compensation negotiations is not only at your annual performance and compensation review but also when you are being given major additional responsibilities or being promoted. Organizations have a strong bias to attempt to obtain the maximum performance at the minimum cost. You have to counteract this bias by being an assertive, skillful compensation negotiator. These ground rules will help you do so:
  • Have a valid reason for asking for a meeting with your supervisor to discuss compensation.
  • Suggest that the meeting begin by reviewing your job performance. If you think it would help, refer to your written list of accomplishments. Do not be tentative or shy in describing the importance of what you have done and what you are currently doing.
  • Maintain direct eye contact throughout the meeting. This is especially important when you are expressing a request for a salary increase.
  • Refrain from mentioning why you need the extra money or discussing your personal financial situation. You are asking for an increase in compensation as a result of earning it, not needing it.
  • If you sense your supervisor is going to propose an increase, let him or her do so first so you do not negotiate against yourself. On the other hand, if you believe your supervisor is someone who always tries to get away with paying as little as possible, you are better off to table your request for a specific increase at the start.
  • Always be prepared to answer the question: “What salary increase do you think is reasonable?”
  • Express your request for a salary increase in terms of the additional amount per month you believe is “reasonable” as opposed to quoting an annual figure.
  • Ask for a salary increase of 10-15% more than you want to give yourself some negotiating room. On the other hand, do not be totally unrealistic in your demands or you will be perceived as being greedy and out-of-touch with the real world.
  • Negotiate for more than just your salary. If a major salary increase is rejected, ask for some other job perks or benefits, such as a change in job responsibilities, more flexibility in work hours, a child-care allowance, more vacation time, or time off to take work-related courses paid for by the organization. Ask to participate in your organization’s stock option plan if one exists at your level of employment. Never assume something is not negotiable.
  • When you are at the top of your pay range, consider asking for more responsibilities to justify a higher level of compensation or for a promotion to a better-paying position.
Do not overreact if your request for a salary increase is declined. Respond in the following manner when this happens:
  • If your supervisor says the organization cannot afford to give you a raise, ask when it will be in a position to do so. If your supervisor says you do not deserve a raise, ask what specifically you need to do to merit one. Make notes on the answer. At the end of the meeting, ask when the next review of your performance and compensation will take place.
  • In the event your supervisor offers you something unexpected rather than a salary increase and you are uncertain whether to accept it, request that you have a day to think it over before making a decision.
  • As is the case with any negotiation, ask lots of questions to probe and clarify your supervisor’s position. And, listen carefully to the answers.
  • Do not threaten to leave the organization if you fail to get your requested salary increase except as a last resort when you are absolutely prepared to do so.
If you are convinced that you are fully justified in seeking a major salary increase, getting a “no” answer might represent a wake-up call for you to look elsewhere for a job. This is especially the case when you are well-informed about the going salary ranges for your peers at other local organizations and your salary is at the bottom end of the range despite you having produced consistently superior performance.
 

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