It’s a new year and hopefully you’ll be getting a pay review. How do you get the best pay raise possible? Here are some things to think about, plan for, and implement successfully.
TIMING – There are two critical times to influence your pay increase. One is just before the annual budget is being prepared. This is the time to help the boss understand your contribution over the prior year and the expectations you have at compensation review time. Once the boss’s budget is approved it’s very difficult to ask for more pay. When more pay is built into the budget, the greater the flexibility for how pay is distributed. The second time to influence pay is prior to your performance review. See “Prepare” and “Implement”.
RESEARCH – Find out where you stand in the marketplace and within your company. Check out Glassdoor and Indeed to assess current trends and the supply/demand within your function. Identify the high and low pay ranges, by level, experience and industry. This will give you an economic value for a similar job. Use this information when meeting with your boss. Through colleagues, learn about past pay practices and average pay increases. Do they pay for individual performance or across-the-board percentage? Manage your expectations.
PREPARE – Experience has shown that results are better with research and preparation than if you just walk in and play it by ear. Practice your delivery and content with a trusted mentor or colleague who are managers and can help you improve. Some factors to keep in mind: Performance of the organization – A great financial year versus a bad year. The impact of your department – Is it direct or indirect. Your performance within the work-group – As a leader or minor player. Collect key information from your past results, like “Increased productivity 8% through process improvement initiatives, measured by days cash outstanding, with 10% less staff”.
IMPLEMENT – First, talk with your boss: “I’d like to set up a meeting to talk about what’s going on in the marketplace, what I see as my contributions, potential, and expectations for the coming year”. Second, deliver the research: “These are the highlights of the past year and the major contributions I have made” (make sure the list is measurable and validated, including inflation). Third, expectations and goals for the next year, “Inflation and the marketplace is putting a premium on my function, I hope that the organization will reward my past contribution as I plan to meet or exceed our objectives for the next year”. This might be a bit bold, so adjust your approach to the situation and boss.
You must first understand your worth to the organization, the value of your skills and the comparable pay in the marketplace. Document your results and potential as budgets are being prepared and before a performance review. Define your past and current achievements.
Ask for a bit more than you think you deserved, but expect a bit less.
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