I have been seeing articles about how to ask for a raise and how a raise can make you wealthy. Then over the weekend, I heard someone suggest that you should go in and demand a raise. For me, I believe that suggesting that everyone should go in and ask or demand a raise is not prudent because it may actually backfire. Yes, there have been success stories that encourage others to follow. Yet there are others who have tried to ask for a raise and it turned out to be the straw that broke the boss’s back (especially if the employee wasn’t a stellar employee). So before you jump and ask for a raise, understand the risks of asking for a pay raise and know there are many different ways to ask for one.

For myself, I never asked for a raise because I feel that I have been treated fairly where ever I have gone. Even now, in my coaching business, I tell my clients that they can pay me what they believe the session was worth. I even tell them that they can wait until they apply my suggestions to see the results first before determining the value of what they received. Some clients have given me $20 while others have given me $100 or more. I do this because I trust the universe will bring my prosperity based on what I give instead of worry that some people will take advantage of me. When we drop our expectations, the universe will open up to give us real prosperity. By having expectations, you may get disappointed for receiving less than what you expect and get discouraged and frustrated. This can lead to a downward spiral because your performance will start to be affected. In the end, I probably have received more with my flexible payment schedule without any expectations than what I would have by setting up a fixed payment for all my clients.  Yet, there are times where I would be underpaid if I had set up expectations and other times where I reap the benefits of being flexible (getting a higher than expected payment).  The same goes for working at a company.  Sometimes you may feel underpaid yet being in that position may lead to future opportunities where you will feel like you hit the jackpot.
In my previous job, I had some responsibility for suggesting pay raises. From my limited experience, I can tell you that there is a lot of thought and review that happens on who should be rewarded for their performance and how to fix any pay inequities. Even though at times there may be a few inequities in pay, for the most part, the pay process does treat people fairly.

So what is the best way to go about a pay raise? There are many different styles that will work differently depending on your boss. Thus, one way will not work for everyone. Yet, for me, if the pay process is relatively fair for the company, then the best suggestion is use the pay process as a dialog to know how you can become more valuable to the company to justify a higher pay. So, first

1. Know when the pay process begins

Usually this is 2 months before the pay raises are given. You will want to have a conversation with you manager before he sends his recommendations up the line. For the best opportunity, you should start 4 to 6 months before this time. Thus, if you boss has suggestions on what you can do to justify a raise, you will have time to act before he makes his recommendations.

If you want to demand a raise, you can go in at any time. Sometimes there are opportunities to get a pay raise mid-year if you demand one. Yet, it is easier to get a raise when it is a part of the normal pay process. A raise mid-year will demand a significant reason to justify taking the special request up the chain for approval.

2. Know what others are getting paid

You are more likely to get a raise if you can verify that you are being underpaid. If you are already at the top end of the pay scale for the company your chances for a raise are lower and you may be viewed as greedy for asking (not good for long-term job growth).

3. Understand what performance your company rewards

Even during a regular performance review, the actual pay performance process may not be discussed. For example, a consulting firm may pay more for someone with marketing skills while you are known as a great technical person. During a regular performance review, they may give you high praise on your technical abilities yet not grade you on marketing skills because they do not see you in that role. When it comes to pay increases, your high grade on technical skills may translate to a low pay increase compared to someone who has better marketing skills. They may figure that they can hire another technician but a marketer is harder to find and thus gets rewarded.

4. Understand how you can modify your skills to create value

As mentioned above, your skills may be fantastic in one area, yet does not add value to the company. To find out if this is the case, I would find it refreshing as, a manager, if an employee would come to me and say:

“I have been disappointed in my pay raises lately. I believe that I have the skills to be more valuable to this company, yet it seems that my efforts are not being as valued as much as I would have thought. Thus, I wonder if there is a disconnection of what I should be doing to be of value to this company and what I am doing. Can we discuss what I can do to make myself more valuable to you?”

By taking this approach, the employee is asking what he can do to receive a larger pay instead of asking of a raise which may backfire in the long-term. As a manager, I rather work with someone than feel that they backed me into a corner with only a “yes” or “no” answer to give.

Note, at the end of the meeting about your pay performance, your boss may tell you that he is not giving you a raise at this time and may give you several areas to improve on. You have every right to set up another meeting to review your performance. You can ask that the request for a raise be reviewed at this time based on the measures you just agreed on.

5. Know your value

The same person who this past weekend said you should demand a raise also said that you should know your value. This value is an inner knowing of who you are (self-worth). This is important because if you have a low sense of self-worth, your boss will not see your worth either and not give you a raise.

A few suggestions on what not to do when asking for a raise:

1. Demanding a raise

There is a difference in a request and a demand. For me, a demand is you either do it or else with little discussion (just a one-way discussion on why he should do it). With a demand, the other person is put on the defensive and may raise a wall of defense (e.g., “I do not have the money to give you a raise”) instead of inviting an honest discussion.

Second, in demanding a raise, the underlying issue may not be solved. If there was a perceived issue of how your performance has not measured up, this issue may not be addressed, even if you get a raise (e.g., he may have caved in for now due to the economy). Yet, when the next round of layoffs occurs, you may have put yourself on the top of consideration list.

This does not mean that you can not have a pay discussion and make a strong request to receive a raise. In this discussion, if your boss does not want to give you a raise, you have every right to say:

“Sorry that we do not see eye to eye. Yet, it may be time for me to move on” (to another company that you have an offer from).

Be aware that you may end up seeing your boss again down the road, possibly at another firm where his hands are not tied in giving raises. Would you rather end on a good note (having a respectful discussion and making a request), then leaving the company where things got nasty because your boss could not give you a raise?

2. Not being ready for a no

Probably the worst thing to do is to be stunned by a “no”. In actuality, being ready to discuss why your manager said “no” is the most productive step in the whole process because a majority of times you will hear “no” as the response.

As mentioned above, you need to understand your value to your company and what needs to be changed in your performance to get a raise. Maybe you are working hard on Project A while you boss would prefer you to spend more time on Project B for your long-term growth. Unless you ask for the reason behind the “no”, you do not know how to change your boss’s mind for a future raise. Maybe you are doing what he wants, yet he has not seen it. Thus, making sure your productivity is more visible is an easy switch to make.

3. Staying angry if you are denied a raise

If you get a “no”, you are probably going to be upset and resentful. You need to work out respectfully your disappointment with your boss by asking for the reasons for his “no”. The worst thing to do is to go back to your desk fuming and give less effort towards work. If you think that he does not respect you, thus you will not respect him, this would be the worst possible outcome. This resentment can be the start of a downward spiral that ends with losing your job. By asking for all the reasons for his decision, you can start to see how you can change his mind overtime. Thus, instead of the answer being a “no”, you may start seeing it as an opportunity for a raise down the road.

4. Not changing your performance if you get the raise

If you received a raise, it may have resulting in being paid more than your counterparts. By being paid more than others, your productivity to the company should also be higher. If there is a layoff, your paycheck may make you stand out compared to others unless your performance justifies the pay. If your performance does not justify the higher pay, you may have just put yourself on a pedestal that is easier to tip over.

The raise may have also come with increased expectations. If you had a discussion about the raise with your boss, you may be aware of these expectations. If you demanded a raise, the expectation may have been implied but not talked about. Even if there are no mass layoffs, your manager’s expectations of future performance due to giving a raise may hurt you unless your performance meets up to their expectations.

5. Expecting future raises if the raise put your salary above others

Jim at Blueprint for Finacial Prosperity asked would you take a 20% raise from a new job or stay with your current job with a 20% raise via a counter offer? In the analysis it was pointed out that you may not get future raise in your current position if you are making more than your counterparts. In reality, you may not get a significant raise from a new job either unless your performance changes to substantiate it. One of the reasons why there are pay inequities at companies is due to people being hired in at higher salaries or getting a raise before it was due. Over time, these raises are evened out. The new hire that negotiated a higher salary (or just got one as the incentive to make a jump) may get a 2% raise while everyone else gets a 4% raise. The same is true with someone who requests a raise. The manager may give it to make you happy, yet long term they need to preserve pay equity through out the company. So, unless you get a job in a company with a higher pay scale, a raise may be a temporary shift in pay that gets evened out over time.

When I read how a raise can easily get people out of their financial trouble I shake my head because unless your job performance changes (e.g., take on new responsibility, land a new client, etc.), the pay raise will ultimately be evened out over time to what they would have gotten. Thus, it may not be the ultimate solution as some suggest yet more of a quick one-time fix.

If your pay is below average of what is paid in your company or in the city you work in and your performance is “above average”, then you may want to ask for a raise or look for a new job. Yet, if asked, 40% of employees would consider themselves a top 20% performer and 75% of employees would say that they are underpaid in comparison to others. It is sometimes difficult to see ourselves objectively like a manager tries to do. The point is, an employer would consider giving raises to a top 20% performer to keep them or to employees who are truly underpaid due to an anomaly in the pay system. Yet, when someone who is not a stellar employee or is already getting paid more than others asks for a raise, they are probably not going to get a raise because it will create problems with other employees who will then be knocking at their manager’s door next.

We all would enjoy make a few extra dollars in our paycheck. Yet, be careful on how you approach your boss. If your boss is going to be offended that you are demanding a raise (which he may interpret as questioning his fairness in how he treats you and other employees), you may be doing more harm than good. Yet, asking for a dialog about how your performance is valued when it comes to pay, may lead to a higher likelihood of being paid better over the long term instead of just the short term.

This entry was posted on Thursday, November 9th, 2006 at 7:08 am and is filed under Salary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.