Asking for a Pay Raise

10 Steps for Negotiating a Pay Raise

Several times a year, participants will ask us, “Do you have any tips on how to ask for a pay raise?” Any negotiation regarding a sensitive issue like a raise can be difficult to negotiate. It is difficult because if your boss agrees to the raise, it almost always has multiple implications like an impact to her budget or creating a situation where other employees feel they are also entitled to a raise. For you, not getting the raise could ultimately impact your ability to live in the style you envision or have become accustomed to living. Asking for a raise can also be a risk. Not asking for a raise can carry a personal price. So, if you are going to tackle this topic, you need a plan. The following 10 tips will help you in maximizing your chances of obtaining a raise.

1. Build your reputation. When we use the word “reputation,” it is important to note that there are only two types of reputations: Good ones and bad ones. Everything in the middle is not a reputation. Do you do exactly what is required for your job or do your contributions significantly stand out because you out-perform your competition? For example, do you work exactly your scheduled hours or are you willing to put in extra effort when required? Do you volunteer for additional assignments? Do you have a cheerful attitude when requests are made for your assistance? Do you take the time to solve the tough problems at work? The tougher the problems you are able to solve for your team or organization, the higher your perceived value when you negotiate a raise.

   The best opportunity to receive a raise is when your boss feels that results you produce are significant. To put it another way, if your boss feels it would be difficult for her to be as successful as she is in the eyes of her boss, without your contributions and results, you are in a much stronger position when you ask for a raise. When you produce results, your success rate in receiving a raise increases significantly.

2. Think about timing. In terms of how to ask for a pay raise, timing is everything. Is your company financially strong or is it struggling to make ends meet? The best time to ask for a raise is when your company is financially strong, out performing the budget, your performance is stellar, and you have a great relationship with your boss.
3. Know what you are worth. In asking for a raise, it is critical that you know the value of your worth. Value can be divided into two arenas. Your intrinsic value to your current company and your extrinsic value to other potential employers. Your extrinsic value is your marketable worth to other organizations who would value the gifts and talents you could bring to their organization. It is important to understand the difference between your intrinsic and extrinsic value because it could play a large role in your decisions in what you ask for and what you receive when asking for a raise. For example, you may hold a bachelor’s degree and be an excellent writer. If your company has you in a position that does not utilize your writing skills or the education you learned in obtaining your degree, you will have low intrinsic value. But, you could market yourself to other organizations because in this case, most likely you will have a higher extrinsic value to another organization.

   The best way to know what you are worth is to search the current job market. You can find salary information quite easily. Two of the most widely known sites for salary information are www.salary.com and www.payscale.com. This type of information is critical to your success.

   Ensure that your research is accurate. Nothing will give you more credibility and confidence than knowing your research is 100 percent accurate. And, nothing will cause you to lose credibility faster than your boss pointing out there are holes in your research. Be sure you are comparing apples to apples.

4. Clarify your goals. For some people, working close to home is very important to them when seeking and maintaining employment. Some people place the highest value on how they are treated by the boss and others in the work environment. For others, having a specific title or working in a specific industry is what is most important to them. For some, medical or retirement benefits are key. And last, there are some people that the only thing that matters to them is how much money they make on an hourly, monthly or annual basis. The reason we encourage you to clarify these personal goals is you may be successful in achieving your raise, but if the boss is a jerk, or you have to sit in rush hour traffic for two hours each day, have you really achieved personal success? Success is all about the accomplishment of achieving your pre-determined goals. Being confident about your personal goals is helpful in knowing what to ask for from your boss.

   Set a monetary goal. Be clear on what you feel is fair and be able to explain in detail why you feel that amount of raise is fair. Decide on the minimum amount you are willing to accept (bottom line), your level of comfort, and your wish (the salary you would walk out the door and when you are out of your boss’ earshot, you would scream with excitement).

5. Prepare for your meeting. Before you meet with your boss, you must be prepared and feel confident you have earned the right to ask for a raise. It will be helpful to have typed out information such as the highlights of your three most significant accomplishments. It will also be helpful to focus on how you will add significant value in three or four areas that you are responsible for in the year to come. Be careful not to highlight things such as the fact that you show up to work on time each day, but rather focus on significant accomplishments such as the fact that you have exceeded your sales quota by 50 percent or more each quarter.

   In preparing for this meeting, you will want to walk in with options. Options may include:

   • Getting the raise you want when you have the meeting with your boss
   • Getting no raise and waiting until your next review
   • Being reassigned to a new position with more responsibility that pays more money
   • Taking on additional responsibilities
   • If you are not happy with the raise, or you get no raise, will you go back to work and continue on with your job displaying the behaviors of a happy camper or will you go back to your desk and pout or contribute less than your full potential? If you do so, you are on strike or are participating in a work slowdown
   • Will you quit on the spot?
   • Will you go back to your desk and commence with a job search?
   • Will you ask for something else besides money like a bigger office, a laptop, the ability to work from home or work part-time instead of full-time?
   • If you cannot get a raise today, what will you have to do differently or when will your boss commit to giving you a raise?

   Last, it will be helpful to know your boss’ needs and goals and demonstrate how your future significant accomplishments will ensure that your boss is even more successful.

6. Role play prior to meeting with your boss. We encourage you to have someone role play with you so you can gain practice in stating your case and asking your boss for a raise. Let the counterpart play the role of your boss. The counterpart should be encouraged to ask the tough questions a boss is likely to ask, provide objections such as budgetary restraints or that a raise is not possible at this time. Role play two or three times and you will feel your level of confidence rise with each practice.
7. Meet with your boss. When you meet with your boss, have an agenda that follows these basic guidelines:
   • Schedule a meeting in advance with your boss. If the meeting is not scheduled and one afternoon the boss says to you, “I’ve got time, let’s talk now,” you may not be prepared
   • Have a transition statement prepared to help bridge the discussion from small talk to “raise” talk. For example, you might say, “I am really grateful for the opportunity to meet with you this afternoon. I want to talk about my past accomplishments, my future contributions to the company, and specifically about my compensation.”
   • Lead your boss through a five minute presentation that outlines your past significant accomplishments; your proposed significant future contributions; and review your salary survey research. We do not recommend giving your boss the outline of this presentation on paper prior to your meeting. Giving this to your boss in advance may create a wall of adversity that would not be there when you meet one-on-one
   • Be aware of positive nonverbal communication. We encourage you to sit at a conference table close to your boss. The worst scenario is your boss sitting behind her desk. Positive nonverbal communication includes: leaning forward in your chair; eye contact with your boss; hands and arms open and legs uncrossed. To get your boss to mirror the positive nonverbal behaviors you can ask your boss open ended questions or share information on paper with your boss where she has to lean forward to effectively follow your information or talking points. Remember, your boss will most likely not concede to your raise when she is exhibiting negative nonverbal communication
   • Confirm deal points in writing. If a raise is agreed to, confirm when the raise will go into effect and how much the raise will be. If a raise is not an option at this time, confirm in writing what the conditions and time frames are that need to be met to be eligible for a raise
   • Thank your boss for meeting with you and hopefully, for giving you a raise. Bosses do not get enough positive feedback. Take the time to thank your boss even if the raise is not everything you had hoped for or if you got no raise at all. One of the greatest tests of an employee’s character is how they handle success and even more telling is how they handle rejection or adversity
8. Stay objective. Never resort to an emotional plea such as explaining that you do not have enough money to pay your mortgage or car payment. Bosses are not responsible for ensuring that you can live within your financial means. You are much better off focusing on your past contributions, future contributions and what the salary surveys tell and your boss what you are worth.
9. Anticipate objections. Almost every boss is going to provide you with some type of objection when it comes to asking for a raise. This is no time to make weak emotional responses like, “I really need a raise so I can make my new car payment” or, “It doesn’t hurt to try to ask for a raise.” This is the time you want to stay objective and once again review: what your past significant accomplishments are; what your future significant contributions are going to be; and what market research states about a fair salary for a person in your position.

   Some of the classic boss objections or counters include:

   Objection: “Right now, you are the highest paid person in your job category at our company.”

   Counter: Do not focus the comparison of your salary on what other people inside the company currently make. Focus your comparisons on what other competitive companies are paying people in your job category.

   Objection: Your boss states that he will not be able to sell his boss on another salary increase.

   Counter: Focus once again on your past significant accomplishments, your future significant contributions, and the research that supports your higher salary.

   Objection: “It is not in our budget.”

   Counter: Focus on the future. Gain agreement with your boss on what you need to do differently, starting today, to add even more value to the organization to justify increasing the budget and giving you a raise. Also gain your boss’ commitment on how your future success is going to be measured and within what time frame you will eligible to receive this raise.

   Objection: “You are pricing yourself out of the market.” Or, “This position does not warrant another increase in salary.” This is the boss’ way of telling you that you are becoming more expensive than the value your position is adding to the company.

   Counter: First, do not take this objection personally. Focus your conversation on what you need to do differently so that you continue to add more value to your boss and the organization

   Objection: “Let’s wait until your next performance review.” Bosses are great at putting off your raise until some future point in time.

   Counter: If your boss is adamant about waiting until some future point in time, tell your boss that you really need to evaluate your future with the company and you were hoping that something could be done regarding your salary right now.

   Counter: A second counter will be to once again focus on your significant accomplishments of the past, your commitments to adding future value to the organization, and gain your boss’ agreement of when your raise will become effective.

   Remember, one of the fastest ways to gain a raise, and at the same time effectively counter any of these objections, is to go out and find yourself a new job. When you have a job that you like, you will not leave it unless a new employer gives you a significant raise. New employers know this fact and usually put together an attractive package. If a new employer asks you what you currently make, or offers you a starting salary that is not a big enough incentive to leave a job you are happy with, a great line to tell your new potential employer is, “To leave my current job, my salary requirement is $xx,xxxx.”

10. Celebrate your success. Any time you get a raise, you need to celebrate. Yes, any raise, no matter how small. More money is more money. You can go through your whole life upset about the wage you earn and the sad part is no one is going to care how you feel about your current wage. Life is way too short to be an upset participant. So, with your new found money, go out and do what makes you happy. Maybe it is dinner and drinks out on the town. Maybe it is a movie or maybe it’s going out for a massage. Whatever brings you happiness, a raise is a time worthy of celebrating. Go for it!