Getting a Worthwhile Pay Rise

Everybody will have to ask an employer for a pay rise at some time but this can be difficult, and many people handle it poorly, causing frustration and ill-feeling.

Unfortunately, there is no 'proper' or standard way to ask for a raise or salary increase. Employees tend to use various approaches:

• They might write their boss a letter.
• Perhaps discuss the matter informally with their boss.
• Discuss the matter with colleagues and hope that their boss gets to hear about it.
• They may drop hints about an increase in salary to test the water.
• They might ask their boss politely, or demand firmly, to consider their request.
• They may even try to go over the boss's head to get a decision.
• Some even threaten to resign or secure another job offer.

Employees are often under pressure and may feel uncomfortable and stressed asking their employers for a salary increase. As a result they fail to plan and control the situation, which makes achieving anything very difficult.

Simple planning and keeping control of what you say and do can make a big difference.

Salary levels are largely dictated by market forces and the contribution that you make to your company's organisational performance (which is particularly relevant for roles which directly impact on profitability). When you acknowledge this principle you begin to take control of your earnings.

If you find that the gap between your expectations and your employer's salary limit is too great to bridge, then look to find or develop a role that commands a higher value and therefore a higher salary. You can do this with your present employer by agreeing wider responsibilities and opportunities for you to contribute to the company’s organisational performance and profit. Focus on developing your value to the employer and the market place, rather than simply trying to achieve a higher reward for what you are already doing.

Contract Negotiation for a New Job

If you are changing jobs, the best time to negotiate your salary is after receiving a job offer and before you accept it. At the point when the employer clearly wants you for the job in question and is keen to have your acceptance of the job offer your bargaining power in real terms is strongest. And is even stronger if you have at least one other job offer on the table when you are negotiating your potential salary for this new job. A strong stance at this stage is your best chance to provide the recruiting manager with the justification he needs to pay you something outside the employer's normal pay scale for this particular job.

The employers’s initial offer will be based on their own budget and internal pay-scale reference points and what level of reward they feel is necessary to secure you in this particular role. And this salary/package level is nearly always negotiable.

Remember, your objective is to be offered the job by convincing the interviewer that you are capable of doing it better than any of the other candidates. To do this, some preparation is necessary.

The stronger you convince the interviewer that you are the best person for the job, then the more likely you are to do well when it comes to negotiating the package as a whole.

If the interviewer asks you before or during the interview to confirm your salary/package expectations, give them a broad indication at the top of the range that has already been indicated or discussed for the role (plus an extra 10-20 per cent for good measure), and say that ultimately your decision will be based on comparing your options - think and behave as if you expect to have more than one.

It's a matter of personal feeling as to how you set your target salary level for a particular job, i.e. how much you'll eventually be happy to accept and how firmly you will hold out for it, and anything above it. This will be a combination of what you want and need, whether you have another real job offer and generally what your market value is in terms of the skills and abilities the employer needs for the job being considered.

In terms of negotiating salary and package, your best position is always to secure two job offers from two different employers, which gives you the advantage of choice.

Bear in mind also that you can always buy some time to 'think about it' whatever they offer you. Time will generally work in your favour if they want you. They will worry that they'll lose you, perhaps even to a competitor, and so will be more likely to increase their offer, and to justify some extra budget if required.

Generally a good manager and employer will respect you more, and feel you are more valuable, if they get the impression that you are in demand elsewhere.

During the negotiation be sure to maintain a positive and committed view towards the prospective new company and the job on offer. This will prevent the risk of their coming to the view that you are wasting their time or stringing them along. It's important to be fair and right with people, even while negotiating.

Take a look at the Input Youth Job Interviews and Job Guide pages if you are changing jobs.

Asking for a Pay Rise in the same job

If you feel the need to ask for a pay rise, the most positive way to approach this is to ask for extra work and responsibility and link this to a future pay increase. This is a grown-up approach that employers respond to better than simply asking for more pay for doing the same job.

Another positive approach is to ask for a performance related bonus or pay increase subject to you achieving more, based on increased standards of output, greater than current or expected levels. This again should be received positively by the employer because you're offering something in return, and not simply asking for more money, which most people tend to do.

Ask for a face-to-face meeting rather than try to present your case in a letter, which is just a one-way communication tool and doesn't allow you to develop a mutual understanding of your situation and what to do about it. Simply ask your boss for a review meeting to discuss your responsibilities and remuneration.

Separately, before the meeting you must get an objective view and measure of your market worth. Look at other similar jobs outside as well as inside the company and compare them to your own responsibilities and rewards. Personal views about reward and job-load can become very subjective and need to be validated or it will be difficult for you to decide how deserved your claim really is. Stay positive and constructive - look for opportunities to make your boss's task in dealing with your approach as easy as possible, especially given that resolving increased salary requests are difficult for your boss too.

Factors that affect Salary Negotiation

• How well paid you are at the moment compared to the market norms.
• The present rate of inflation.
• Where you live and work and the costs of living associated with the area.
• The company's position concerning staff turn-over, retention, recruitment and head-count (i.e. increasing, reducing, or static; in accordance with planned levels).
• The company's trading performance (relative to budgeted costs and planned sales and profitability).
• The available budget your company has for pay rises (which is usually none, apart from annual salary review time).
• The company's last company-wide salary review, and the range of % increases awarded.
• The company's next company-wide salary review, and the likely range of % increases.
• What precedents would be set for other employees by giving you a pay rise (this is often a significant issue for the company).
• How valued you are to your boss and company.
• How easy it would be for them to replace you with someone of similar capability and value at the same or less salary.
• How much extra responsibility you are prepared to take on.
• How much extra effort you are prepared to put into the job and how ambitious you are.
• And, very importantly, what you will do if you don't get a raise or salary increase (i.e. how much you want to stay with your present company and how confident you are that you could find a better job elsewhere)

If you believe that you have a strong deserving case, then write it down, which will help you to see things objectively, and will provide you with a prepared position, enabling you to keep control and present your case fairly and professionally.

Find out what you can about the company's position, referring to the above factors. If you can find references from the market that indicate you are paid less than the norm then prepare to use them.

Present your case, unemotionally, and try to understand your boss's and the company's perspective. The case you present should emphasise what you are prepared to do for the company - what's in it for them. Avoid making a case that's wholly centred on what you want.

Present as much objective information (i.e. not your own opinion) and evidence that you can - you are trying to build a case, not merely make a request.

Examples of Good Reasons for a Salary Increase

Here are just a few examples of reasons that you might use to justify a raise - you should tailor these to your own particular situation:

• Refer to objectives you've achieved in the past year - attach values per annum (cost saved or extra profit or revenue achieved) to the company.
• Refer to examples of your achievements outside of your objectives above, which have contributed to profit by increasing turnover, efficiency, solving problems, training others, saving time, saving costs, etc - the more examples of your achievements in these areas the better - try to attach estimates of value per annum (profit, cost saving) each example has produced for the employer.
• State the extra responsibilities you have taken on since your last raise, either officially or informally - make reference to your basic job description and the additional responsibilities you now fulfil beyond these duties - attach values or person/days/per year equivalent of this extra work you do – i.e. it's saving them having to employ someone else to do this extra work.
• Refer to any supervisory or management responsibility that you have taken on informally or formally since your last raise and attach values.
• If you produce or retain sales/customers, quantify the value of any business per year that has not already or fully been compensated via bonus or commission - it is reasonable for you to be compensated for this contribution.
• Refer to any qualifications earned since your last raise or that your employer may not be aware that you possess - employee qualifications often increase the competitive strength and/or customer accreditations of a supplier organization.
• Identify extra opportunities, responsibilities or activities that you would be happy to take on in the future if suitably rewarded, which would benefit the company (increase sales, profit, reduce costs or save time) - especially if these items are not being attended to currently.
• And optionally, depending on the situation and whether you think this will be received positively, (because these items can be seen as threatening by some bosses and employers):
• Compare your package with market norms (e.g. other advertised rates for similar jobs - this often provides good justification for your boss, who might argue your case).
• Suggest that companies who pay more than market average tend to secure the services and loyalty of the best people available (this is relevant if you work for an employer who aspires to be a high quality company as high quality companies need high quality, and therefore more expensive, people).
• Suggest that you may have to consider your position if your remuneration fails to match the level that you could find with another employer (obviously this is a threat - use only if you have had to resort to such tactics, e.g. if you have an extremely hard-headed boss who likes to play hardball).

Frequently Asked Questions & Answers

Q: When is a good time to discuss salary rises?

A: When the organisation is reviewing performance-related salary increases for all staff (prior to finalisation of the coming trading year's budgets). Or when you have secured another job offer. Or when your boss is asking you to take on significant extra responsibility which you have a choice whether to accept or not.

Q: What is the best way to approach your boss about this subject?

A: Ask for a face-to-face discussion about your responsibilities, reward and career direction. Then at the meeting ask for help in formulating and timing an approach and justification for an increase in salary that meets your organisation's processes, protocols, policies and timing.

Q: How can you prepare yourself for a salary negotiation meeting?

A: Understand the policies, timings, protocols, criteria, etc., within your organization. Have quantifiable evidence of your value and contribution to organizational performance and profit. Be positive and constructive. 'Facilitate' the process. Help your boss to help you. If you are really up against it ideally secure an alternative job offer beforehand; this is the only thing that will give you sufficient power and choice necessary to apply real pressure (and more particularly to provide the management with justification for breaking policy to meet your demands).

Q: Where can you find out information like the average salary for your field, so you are prepared and have fair expectations?

A: Local, national and trade newspaper job adverts. Online job adverts. Competitors’ job vacancy adverts. Also check www.paywizard.co.uk.

Q: What other things are good to negotiate at a time like this, why, and how do you best approach the subject? (i.e. holiday, bonuses, work hours etc)

A: Keep the whole package in mind all the time. Think about it all beforehand and be able to provide market-norm examples and reference points as justification and evidence. You will make things difficult if you try add new demands and after-thoughts in later. Ask for things that are usual in your organization, and for which some precedent exists and can be referenced. Strange requests will meet with far greater resistance.

Q: What should (and shouldn't) you use as leverage in a salary negotiation meeting?

A: Use evidence of your value to the organisation, directly linked to cost saving, profit improvement, and other key performance indictors, e.g. customers gained and retained, problems solved, efficiencies achieved, initiatives started, positive effect on colleagues/team-members, customer feedback, more business generated. Avoid using anything that is not fair, honest, right and proper as this will undermine your integrity and credibility.

What Next?

Be aware that when you attempt to negotiate a salary that is outside normal policy or timing, then you are attempting to control or at least influence the behaviour of a very big and complex system, i.e., your organisation.

The more you can understand what this system needs, and how it operates in terms of making these decisions, including all the personal factors affecting managers and executives, then the better chance you have to achieve an improvement.

Finally, if you do achieve a salary increase, especially one that is outside of normal policy, make sure you deliver your side of the bargain. This will stand you in good stead the next time.

Read more articles for job seekers and those already in a job