How To Ask For A Pay Raise | Salary Negotiation Tips, Strategy, And Advice | Your Finish Rich Plan

March 5th, 2008

How To Ask For A Pay Raise | Salary Negotiation Tips, Strategy, And Advice

According to The Book of Lists, the fear of public speaking ranks number one in the minds of the majority of people. Far above the fear of death and disease, comes the fear of standing in front of a crowd. We all want to be movie stars, but are terrified of the spotlight. In the corporate world, I honestly believe it’s safe to say that the fear of asking a raise is a close second.

Ask anyone whether or not they feel like they should be making more money. Most will answer that they feel overworked and underpaid. Though negotiating a raise might seem impossible in your particular situation, these pointers can help you secure the increase you’ve been waiting for.

Conditions

Is your company in the position to give you one? You should know the business climate, not only in the national economy but also in the company. “If business is booming, then seeking your fair share of the wealth is understandable,” says Mimi Greenberg, president of MRG Associates, an executive search firm in New York City. “But if you’re employed by a start-up or a larger company actively looking to slash costs, it may not be a very good time to ask for a bump in your paycheck.”
Make sure it’s a good time for your boss. Pick a time when your boss’s stress level and workload are as manageable as possible and tell her what you want to talk about so she’s prepared. Also, if your boss has just been passed over for a promotion, it might be a good idea to wait a couple of months before making your move.
Your performance sets you apart from the crowd. You are making a contribution toward your employer’s goals above and beyond what is expected from your position. Or you have been filling a more demanding position, which usually pays more money, for a considerable time. Or It may be that several co-workers have left the team, and you’re realizing that you’re going to be doing their work for the long haul, not just as a temporary fill-in.
You haven’t had a review in a reasonable amount of time. At least six months and advisably one year since the last review/raise is adequate.
You have to ask! Just like anything in life, you aren’t going to get what you want if you don’t ask for it. It’s the same principle as asking girls out on dates (instead of “hanging out”). You will never make any sales if you don’t make any calls. It’s surprising how many employees are fearful of asking for a raise because they don’t want to seem ungrateful or are afraid of getting turned down and feeling rejected.

Do’s

Prepare yourself. Whether you’re hitting up your current boss for a bump in pay or looking to leverage a new opportunity, thinking ahead and planning your approach will be key to getting the compensation you’re after. As with all career-related matters, you’ve got to be smart about it. But in this case, you’ve got to be extra smart. One bad move could damage your chances of getting what you want. Who’s going to pay a premium for someone who doesn’t appear to be at the top of their game? Be prepared to define a range of increase you think is fair, if you are asked to do so. Present hard data to prove you are not paid up to scale when compared to similar jobs inside the organization and in your employer’s business category. Consult salary surveys by your professional association or on websites such as payscale.com, salary.com, and salaryexpert.com
Use the correct approach. Structure your request around what you’re worth to the company. Never try to make a case for a raise on the basis of need or on personal reasons. Always be professional and courteous, never whine, and don’t be unreasonable or act unprofessionally. Remember that organizations can stay in business only by paying people what they contribute to the bottom line, not their needs. You should make your case based only on what you have contributed toward your employer’s goals above and beyond what is expected from your position. And when it comes time to pop the question, use the word “compensation” rather than “raise” or “money”
Sell yourself. Underscore your loyalty to the organization. Point out your contributions, being as specific as possible in such terms as savings, increased productivity, and growth in sales. Suggest your potential for even greater contributions based on demonstrated performance. Remember, you are making a sales presentation for a product (your service to the organization) to a buyer (your boss) who has a limited budget from which to buy answers to a number of highly competitive needs
Anticipate objections. It will be a rare boss who will not be a bit annoyed that you have had to ask, either because he has allowed you to lose touch with reality or because he has failed to recognize your worth and frustration. Don’t be surprised at some backlash. Accept both praise and criticism with equanimity.
Create several options. If your boss says no, no and no, what will you do? You could offer to take on more responsibility. You could also suggest changes in your benefit plan that will increase your compensation package, rather than your hourly rate. There are many possibilities. More companies, afraid of losing key talent, have become more creative in adjusting compensation packages and can be flexible about things other than cash, such as vacation time, flex time, and working from home. Furthermore, consider that non-cash benefits, like paid training, a computer at home, and more administrative support are usually not taxable and may benefit your boss. Create a win-win situation for you and your employer.

Don’ts

Making brash demands. Stay away from references to how much a competitor could pay you, as many employers are overly sensitive to this. If you make that kind of statement, be prepared to mean what you say and seek work elsewhere if you don’t get more compensation.
Making it personal. Refrain from complaining or whining. You want to talk about your value to the team, but you don’t want to lay a guilt trip on your boss, à la “It doesn’t seem like you appreciate me.” Instead, focus on what you’ve accomplished for the company and how much money you’ve brought in, helped to bring in, or saved. Do not beg, grovel or cry. Do not corner your boss and demand immediate compensation. If possible, avoid ultimatums, threats and other coercive behavior.
Speaking in generalities. “I need a pay increase” is too general. Be specific about what you want, whether it’s a 10% pay hike, an extra week of paid vacation, tuition reimbursement, a 15% of salary performance bonus, or the ability to fly business class. In case your first request doesn’t work out, as stated above, have alternative suggestions ready.
Negotiating after you’ve already reached an agreement. Yes, the best time to ask for what you want is when the company has indicated that they want you. And everyone knows that part of the “fun” of negotiating is the back and forth. And yes, you can do more than one round. But once you have accepted someone’s terms, it’s bad form to come back and say: “You know, I really think I need more money/vacation/staff and just can’t accept the job otherwise.” Guess what—you already accepted! Should a company not rescind its offer—but trust me, it probably will—you are starting off on the wrong foot.
Asking for a raise although deep down, you know you don’t deserve it. If you don’t have much ammunition to justify requesting a raise, perhaps this isn’t the time to do so. Not only are you unlikely to get it, but your boss may think, “What nerve! He’s already getting paid more than he’s worth.”

Tips

Go straight to the point. Conventional wisdom says you should try to get the boss to make the first offer. But if he is likely to lowball you or to respond well to your high offer, you go first.
Be (reasonably) patient. It is unlikely you will get an answer on the spot … unless it is a resounding negative. Leave the door open for a positive answer or at least further negotiations later. According to CareerBuilder.com, one of the largest online job-search websites, less than 1 percent of people who ask for a raise get it right away.
Don’t be afraid to request a day or two to think about a proposal, discuss it with your family or contemplate something. That is never unreasonable.
If you rejected the first offer; accept the second. After that, additional concessions are made grudgingly, so those extra dollars (usually insignificant after taxes) can create ill feelings or make you appear expensive when the boss is deciding whom to lay off.
Be gracious. If the final answer is “yes,” express appreciation, but do not go overboard. And you should start working twice as hard to prove your boss made the right decision. Start right then and there earning that next raise.

Someone once defined negotiation as a process by which both parties walk away equally dissatisfied. The flip side of that is both parties walk away equally satisfied. That’s a worthy goal to shoot for.

Raise discussions are never easy for either party, and if your boss is the passive-aggressive type, he may tell you what you want to hear simply to get you out of his office. Make sure that you follow up appropriately on any verbal promises he makes, and if possible, secure an effective date for your increase. The issue is not closed until you see the change on your paycheck!