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How to Ask for a Pay Rise

October 15th, 2009

asking-getting-pay-rise.jpgMany people in the UK have been wondering about how to ask for a pay rise in a recession. Here in the USA, we call it a “raise”, but it’s pretty much the same thing. This series of articles on salary negotiation and pay rises will cover the topics of not only how and when to ask for a rise, but also how to assess the various factors such as company performance, economic conditions, salary averages for your industry, and of course your own experience and merits, all of which will determine how much of a chance you have of actually being granted an increase in your pay rate.


Doing the Right Search For a Pay Rise

The thing you need to assess here is how your pay compares with the going rate for the job. Are you being paid the same as other people in similar positions in your organization? And what about those outside the organization? If your employer pays better than the rest of the industry, and you are already earning more than your peers, you’re going to have to prove you’re better than all the rest to stand any chance of justifying a rise. On the other hand, maybe your employers are poor payers and many of your colleagues earn more than you. That gives you a very good case for a rise from the outset. So benchmark your salary.

‘Great. And how do I do that?’, you may be wondering. ‘Am I supposed to go round asking everyone else in the company how much they get paid? Or maybe you want me to break into the HR office after closing time and rifle through the personnel files?’

Neither of those, actually. It isn’t easy to find out exactly what all your colleagues are getting paid, but it’s usually possible to get a fair idea. OK, you might not get a precise figure for every last person, but you can get as much as you need. Here are a few pointers:

Instead of asking people what they are paid, ask them if they know what anyone else is paid. They’re much more likely to tell you. Do you have any good friends who know what your peers are being paid? A secretary or assistant who will give you information about their boss, or a mate in the HR department? The longer someone has been in the organization, the more likely they are to know.

HR departments often keep market survey data. Or simply ask them where you stand in terms of salary across the organization. They’re not likely to give you an exact answer, but they’ll usually give you a rough guide. Ask them, ‘I have a feeling I’m being undervalued and wondered if you could help me find out if that’s true?’

Good friends and colleagues may be happy to ’show you theirs if you’ll show them yours’.

Go for it.

A lot of people may be more prepared to tell you roughly what they earn rather than exactly. It’s easier for them to say ‘Between £25,000 and £35,000′ rather than give you the precise figure. Anything’s better than nothing.

If you have a colleague (or more than one) who does an almost identical job to you, you may be able to pool your resources. You could both ask for a rise together, along the lines of ‘We think this organization should pay its press officers more’. One word of warning, though: if you reckon your fellow press officer is less valuable than you to the organization, you may find you’ve reduced your bargaining leverage. But if they are equally talented, or even more so (as if that were possible), they could help your case.

Try to find out what other perks your colleagues have to offset against their salary. Most of these should be obvious — you’ll know what company car they have, whether they get to work from home, and so on. But you might not have noticed if they get more holiday entitlement than you, or if they get to stay in better hotels on business trips. All these perks are part of the equation, so use the same methods to elicit this information.

This research needs to strike a balance. Don’t give up too easily or you won’t be able to build such a strong case. Then again, don’t spend months trying to compile a detailed schedule of earnings for everyone in the organization. You’re trying to find out if your own salary is par for the course or not, and assemble enough evidence to be able to justify the answer.

Keep it to yourself

Unless you know you can trust a colleague, it’s best not to let on that you’re planning to ask for a rise (unless you decide a joint request is your best approach). If your boss finds out, they may start preparing their case for the defense. In any case your boss will have only a limited scope for manoeuvre in their budget, and if others are prompted to ask for a rise themselves you may find your share of the resources dwindles.

When to Ask for a Pay Rise: Salary Review and Company Performance

The difference between asking for your pay rise at the right time or the wrong time can be the difference between whether or not you get it. So clearly it’s essential to get your timing right. You need to judge the time correctly in terms of the business year and in terms of you and your boss’s day-to-day schedule. If you want the best prospect of success you may need to wait a few months before asking.

Salary Review

By the time the annual (or six-monthly) salary review comes round, your boss has made all the decisions about who will get what. What’s more, they’ll have budgeted for these figures too. So if you come along and try to change it all after the event you’re likely to get short shrift.

You have a far better chance of a rise if you approach your boss a few months before the salary review, when they are about to start thinking about salaries and budgets. That way, they can feed the results of your meeting into the system and they have time to adjust their overall picture according to the rise they agree with you.

Generally speaking, most bosses will be reluctant to launch into discussions about pay with you just after the annual salary review — they thought they’d put all that behind them for a few months. If your boss is likely to award you a pay rise between salary reviews, you might do well to wait at least a few weeks before asking. If, however, you work in an organization where you have no chance of getting a rise that takes effect except at the statutory time — following the annual review — it doesn’t hurt to start making noises now. A pay rise above the standard percentage is going to be a big deal in your organization, so it doesn’t hurt to lay the groundwork early.

So talk to your boss now. Explain that you would like to see a more substantial remuneration at the next review, and ask what you would need to achieve to warrant it. Your boss can hardly tell you that nothing you could do would deserve a pay rise — that would clearly be untrue and demoralizing. That means they’ll have to give you a clear objective: you’d need to double your sales, for instance, or increase your output by 25 per cent. Great! Now you have a firm objective, set by your boss. And when you meet it in time for the next salary review, your boss can hardly refuse you the pay rise.

Get it in Writing

If you get your boss to tell you what performance on your part would warrant a pay rise above the standard rate, make sure you put it in writing and give them a copy — minute the meeting at which you have the discussion, or e-mail them a summary of it. That way if they suddenly suffer selective memory loss next year when you tell them ‘You said if I doubled my sales …” you can prove they really did say it. Equally, if they leave the job, you can use this evidence as strong support for your case for a pay rise when dealing with their successor.

Company Performance

Your boss has to justify this pay rise to their boss. And it’s tough trying to justify a rise if the company has just announced a drop in profits, or a competitor has brought out a new product that is taking market share from your company. Maybe new legislation threatens the business, or senior management has just announced redundancies. All these (in case you needed telling) are not good times to ask for a pay rise.

Pick a Time When Profits are Good and Things are Going Well

So if you’re planning to ask for a rise — or any other increase in remuneration — keep an eye on the company’s performance and pick a time when profits are good and things are going well. Some companies grow steadily but you can still ride the crests of the waves. Others are struggling in the long term. If they are on the edge of collapse, I may as well tell you now that your chances of a rise are slim. But if they are hanging on in there, you should be able to win a modest rise, assuming you are well worth it, and so long as you pick the better times to ask for it.

How Much Should You Ask for Your Pay Rise?

The answer to this burning question has two components:

  • Bringing your salary in line with benchmarks inside and outside the organization.
  • Being rewarded on top of this if your value exceeds the standard expected.

Benchmarking

You’re going to have to do your research. You will need to establish both the industry average salary for your job and the average salary in your particular organization for the same (or comparable) posts.

If you are still doing the job you were taken on to do, you deserve to be paid at this level. If your organization pays way above average, I’d avoid drawing attention to the rest of the industry if I were you, and benchmark yourself against your colleagues. If the rest of the industry pays better than your organization, it’s reasonable to ask for your salary to be brought in line with what you’d earn if you left your job and went to work for a competitor.

Adding Value

Benchmarking establishes whether anyone doing a competent job in your post deserves a higher salary than you’re getting, and has a fairly clear objective result. You can find out easily whether, for example, the industry average is £1500 a year more than you get, or whether your colleagues earn £120 a month more than you do.

The other half of the equation involves working out how much extra you personally are worth. Many of your results at work are no more than you are paid for. If you’re a sales person, for instance, you are expected to bring in a certain level of sales in return for the salary you already receive. To work out how much more you are worth, you’re going to have to list all the extra benefits the organization is getting from you over and above what they already pay you for (you’ll need this list again later on). For example:

  1. Income you have generated for the organization — directly or indirectly — above the level expected
  2. Savings you have instigated
  3. Increase in productivity in the team or in the wider organization thanks to you
  4. Extra responsibilities you’ve taken on since your salary was last set
  5. Extra hours you consistently work beyond what’s in your contract and/or is the accepted norm
  6. Extra expenses you’ve incurred in the line of work, for example mileage, if you’ve agreed to take a detour on the way home each night to drop the crates back at the depot
  7. Any increase in responsibility for others — perhaps it’s always you who stands in for the boss when they are away at a conference or on holiday.

Many of these should carry a clear indication of what you can justify asking as a result. For example:

  1. Suppose you are a sales person (to start with an easy example) on the same salary as your fellow sales staff. The average income generated by each of the team is around £100,000. It’s fair to assume that this is what you’re being paid to generate. But suppose your sales amount to twice that? How much extra can you ask for? Well, if you’re earning the organization as much as two sales people would, why shouldn’t you get paid as much as two? You might not get quite that much, but you are sufficiently justified in making your request for it to look fair rather than greedy. After all, if you leave, they’ll probably have to pay two replacements to generate the same sales as you.
  2. Suppose you found a way to save the organization £4000 a year. What percentage of this saving could you reasonably expect to receive as a reward? You might not get all you ask for, but 10 to 20 percent isn’t an unreasonable request.
  3. What if you’ve taken on extra responsibilities? Look at what they are and how much time you spend on them. If a higher-paid colleague left and you took over half their responsibilities, for example, you’ve got to be able to justify splitting the difference between your present salary and the salary the colleague was on.

These examples should help you work out a fair increase to ask for. I can’t tell you how much of it you’ll get, but the aim at the moment is to decide what to ask for. You don’t want to ask for too little, and you don’t want to look greedy by asking for more than you can justify. This process will help you decide how much you can reasonably get away with asking for.

By the way, if you list several areas where you’ve added value to yourself, you can perfectly well justify asking for a reward for all of them. If you’ve doubled the average sales income and filled in for your boss during holidays and other absences, you can reasonably ask for double your salary plus extra for the added responsibility.

Mixed Bag

You may not want a pay rise alone or, with a skinflint boss, you may think you won’t get as much as you deserve. Bear in mind the option of asking for a lower pay rise alongside other benefits — a one-off bonus, health club membership, extra holiday or whatever you want. So long as the whole lot adds up to no more than you’re worth, you can mix and match as you please.

Leave Room for Manoeuvre

There’s one more important point to make here. You’re going to end up negotiating this salary increase, and negotiation is a game in which everyone pretends to settle for less than they wanted so the other person feels good. In fact, all sensible negotiators start by asking for more than they plan to get, so they can sportingly allow themselves to be beaten down. You’ll be doing the same.

This means you have to start by asking for more than you’re expecting, but the game requires you to justify your initial figure even though we all know you’re not going to get it. So if you think you really ought to get £2000 a year more, ask for, say, £2400 (taking into account how tough a negotiator your boss is). If £2000 is fair, £2400 may be a generous assessment of your worth but it certainly isn’t greedy (your negotiations may even end up somewhere between the two). So always decide to ask for a little more than you actually aim to get.



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