How to Ask for a Pay Raise

Are you getting paid what you're worth? How
do you know what you're worth? And Is your idea of worth tied
to the job you do or your analysis of your personal worth?
These are the types of questions you need to
explore before you contemplate asking for and negotiating a raise
in pay. For many people, their compensation level is tied to their
sense of self-worth. The more money the make, the more successful
they are, the better at their job they are, the better person
they are, or so they believe.
In reality, these salary-based value judgments
can be unhelpful, and believing in them can be a major roadblock
in successfully negotiating a pay raise.
When looking at your compensation you have to remember the employer's
position is that your pay is based on the relative value you bring to
the organization and the market rate for the job you're doing. It is
not based on the qualifications you have, what you made at the last
company you worked for, the financial obligations you have, or what
Fred in accounting makes. What matters is what you contribute to the
company. If you approach pay negotiation from any other position,
your argument lacks the objectivity you need to make a solid case for
yourself.
Tip:
Another major consideration when asking for a pay rise is
your company's policy regarding such requests. Many companies
have a prescribed system for pay increases, for example,
only giving them once a year as part of a formal salary
review. Deviations are rare, if not impossible, and attempts
to circumvent the process can even be frowned on.
If your company does have a strict system,
there can be little point in trying to negotiate outside
of it. Wait until your evaluation is due and then be prepared
with your objective arguments and your negotiation technique,
which we discuss in detail below.

Compensation Research
To determine the value of your position you need
to do your research. You also need to spend time planning and
preparing for your negotiation. The more confidence you have that
what you are asking for is reasonable and defensible, the less likely
your arguments will be refuted or ignored. Some research to consider
includes:

What is the industry average for your position? There are salary surveys on the Internet that you can consult,
and you can often learn a lot from online or magazine job listings.
What compensation do local competitors offer?
What are the upper and lower limits of the

pay scale for your position? Negotiating beyond the upper
limit can be fruitless in many organizations.
What do other people with the same level of responsibility at your
organization make?
What is the rate of inflation? And what has the average pay raise
in your industry been in the past year? Has your compensation been
adjusted for this?
Does your geographical location have a higher or lower cost of
living compared to the average?
If you are charged out to clients, has your charge out rate changed
while your compensation has remained the same?

Tip:
Try to evaluate total compensation not just salary. Look at the value
of the overall benefit package offered by your organization and how
it compares with the industry average and major, local competitors.

Skill Evaluation
Once you know what, in general, the job you do is
worth, then determine where your personal skills, abilities and
experience fit into the equation. This will give you a good idea of
the value you bring to the job you are doing. Look for compelling
arguments that are tangible and that help differentiate you from
others in the company. Gather the following types of information:

Copies of your previous performance evaluations
Documentation of goals/objectives set and met
Personal letters of commendation
Statistics and detailed information related to your performance:

Sales generated/revenue earned
Money saved
Customer satisfaction reports
Creative solutions implemented
Problems solved
Improvements you've contributed to
Initiative taken
Demonstrated commitment, dedication, loyalty


What do you do over and above your job description?

The purpose here is to prove your value to the
organization and make it clear that you are not easily replaceable.
Sure, there might be other people who could fill the job
requirements, but how do you bring added value to the position? Even
if you are not looking for a pay rise right now, gathering together a
list of your accomplishments and specific ways you add to value to
the organization prepares you for these conversations in the future.
Tip:
If you need a raise but, after objectively evaluating the situation,
it is unlikely you will get one, there are two approaches to
consider:

Ask for more responsibility. By expanding your job
requirements you increase your value and thus justify more pay.

Ask for a performance-based bonus or pay raise . By setting the
bar higher you, again, increase your objective value to the company.
Being compensated for doing so is a reasonable result.

Timing
The next step in planning for salary negotiation
is timing. Asking for a raise in the middle of an economic downturn
may not be met with positive results. Neither is asking for a
raise when your company is under financial pressure. You need
to be aware of your organization's financial state and make your
move accordingly. Some questions to consider include:

How well is your company performing financially?
What is the stock price trend?
Do you know what has been budgeted for salary
increases?
Is there a company-wide salary review coming
up? Or has one just been done?

Tip:
If the timing is not right to ask for more money, you might consider
negotiating other perks such as vacation time, flex time, stock
options or professional development opportunities.

With the planning and preparation behind you, now
you face the actual negotiation. Negotiating is a process that many
people find intimidating and uncomfortable but, remember, it is not
pleasant for your manager either. By keeping that in mind you can
manage your own fear and nervousness accordingly. Here are some
negotiation basics to keep in mind.
Negotiating Successfully
Successful negotiation is not about winning,
losing or compromising. It is about collaborating. This is why you
have spent a significant amount of time preparing your position. You
know what you want and deserve. Now you have to present your position
to your employer and work together so that both parties' needs are
met and each leaves the negotiation feeling satisfied.

The best way to do this is to prepare for possible obstacles to your
position. Put yourself in your employer's shoes and try to address as
many of their concerns as possible. Ask yourself, "How will my boss
explain and justify my pay raise to his or her boss?"

Am I easily replaceable?
How long would it take to get another person trained to my level of
performance?
What would happen to the company in the short term if I were to
leave?
Would the company be able to replace me at the salary level I am
currently being paid?

Next, consider your own position relative to the successful
negotiation of a pay raise.

Are there other attractive job opportunities
elsewhere?
How long would it take to secure another
position?
Would a higher salary at a different company
make me happier than staying where I am at?
Would other companies value my contribution
more highly?

Tip:
These questions are designed to get you thinking of your and your
employer's BATNA (Best Alternative To a Negotiated Agreement). If
your BATNA is strong (you have lots of great opportunities at higher
pay) and your employer's is weak (it would be hard for them to
replace you) you can come at your negotiating strategy a bit more
aggressively. Other combinations of BATNA have to be considered as
well and they will largely determine how you design your negotiating
approach.

You can find out more about negotiation in our article on Win-Win Negotiation .
Specific Dos and Don'ts

Negotiate face to face. You may want to ask for
a meeting in a letter or email but never ask for a raise that way.
Pick a time of least distractions for you to have your
conversation. Monday morning or Friday afternoon are not good times.
Take a "What's in it for them?" approach when you outline why you
deserve a raise.
Emphasize your value to them, not what you need to make your life
easier.
Don't use ultimatums. Remember this is a
collaboration. Ultimatums can damage your working relationship
seriously.
Allow your boss to put out a number first. Then counter with a
request that is a few percentage points more than you expect. This is
a negotiation so you do need to give yourself room to move.
Have a list of other items that are open for negotiation should
salary increases not be able at this time.
Remain dignified and professional at all times.
If the answer is "no" this time, begin planning for your next round
by documenting your successes and your achievements.
Follow-up and be persistent (but not a pest) with your requests.
Ask for suggestions as to how you could secure a raise in the
future. Work with your boss to make these things happen.


Key Points
Negotiating a pay raise is an emotionally charged
situation. You feel you deserve higher compensation; the difficulty
lies in proving it. By planning and preparing your position using
objective data and information, you put yourself in a much better
position to defend your request. This also gives you confidence to
pursue the request in the first place. Because successful negotiation
is a collaborative process you need to understand how your need for a
pay raise fits with your employer's need to achieve objectives. When
you can marry those two by demonstrating that the value you bring is
not easily replaceable, you are in a great position to reap the
financial awards you deserve. Do your research, be objective, and
negotiate your next pay raise with confidence.