How To Prepare For A Successful Pay Raise Negotiation

Asking for a pay raise is one of those universally applicable examples of negotiation skills. Almost everyone can relate to it in some way. Everyone who has ever been employed in any position has likely had some thoughts about their salary and probably hopes for a better one, too. At the same time, there’s a universal acceptance of it being a difficult conversation to have. Talking about money is already difficult for a lot of people. Salaries make it even more complicated in that they’re somehow tied to your worth as an employee and, of course, they have a huge impact on your living standards. The consequences of a discussion around salary can be far-reaching. This is also influenced by many other factors: the company culture around salary negotiations, the person’s culture and norms when it comes to salary discussions, and the way the manager perceives salary negotiations. These are all aspects that you have to think about before you ask for a pay raise.

One of the most memorable experiences I had around salary negotiation was very early on in my career. This one individual in my team had been performing at a relatively stable level year-on-year but tending towards underperforming. He had seen his role diminish in responsibility over the past years in this job and so his motivation was at an all-time low. This was a conversation we’d had multiple times before we got to talk about his salary. Typically in this company, we discussed salary every year, during an annual review. When we did that annual review, he came to that meeting expecting to get a pay raise. From a management perspective, you can already see the problem at this point. An annual review should never result in completely new, unheard of feedback. If you already have a good culture in place and a shared perception around what kind of performance constitutes a pay raise and what doesn’t, then you’ve already won half the battle. That wasn’t the case here.

Either way (and this is the central point), when prompted his primary argument for why he expected to receive a pay raise was that he had received one every year so far. Not getting a pay raise at all was perceived as a personal insult, as though his work was not valued. When asked to elaborate on his reasoning, ultimately his argument consisted of a list of responsibilities that he had always been fulfilling and no development or improvement that positively impacted his job. This is where his argument fell through the cracks.

There are a lot of lessons to be learned when it comes to how to approach pay raises from the management side that I’ll write about separately. Fundamentally, as an employee asking for a pay raise, there’s a lot that you can do before you even start the conversation that can transform the discussion for you.

What makes asking for a pay raise difficult?

Negotiating in general is a tricky skill. It requires a mindset that isn’t very easy for a lot of people to adopt, especially not in relation to their work. Money by itself, even if you separate the personal component from the negotiation, is an uncomfortable topic for most people, in most contexts. If you aren’t used to talking about money in general, it’s hard to build the kind of confidence and the mentality that you need to succeed in a conversation like this.

It’s the same with negotiations. If you aren’t used to negotiating on your own behalf, it will always feel a little uncomfortable. Something about asking for money often makes people feel like they’re being greedy. It’s almost like there’s a conflict of interest there. In your job, you’re generally concerned about your work and you try to actively think beyond your personal interests. The moment you start thinking about negotiating a higher salary for yourself, you have to accept that you’re fighting for your own personal interests.

Another difficulty is that it requires assertiveness, which isn’t a character trait that comes naturally to some people. If you’re more of an agreeable person, you’re more likely to shy away from conflict or put yourself in these situations where there are opposing sides. On some level, you have to overcome your own discomfort and, sometimes, your own natural inclination to let something go.

There’s an additional complication in understanding the value of your work. How do you know if you should be asking for more money? How do you know if you’re contributing more than you’re getting paid for? In most companies, there’s very little salary transparency. Depending on where you’re based, it might even be a taboo topic to discuss how much you get paid. So it’s hard to compare your own salary to your peers’, to the industry, to your company, and the market. This information isn’t generally available. Minimal structure in your company could also translate to not understanding what types of skills you need to develop and what kind of contribution they’re looking for when they’re considering paying someone a higher salary. Most managers don’t have something in place already where they can articulate exactly what you need to do for it to justify a pay raise. If they can’t articulate that from their position, it’s very hard to build that understanding from the employee position as well.

All of these are fairly typical situations. Depending on your company, there could be more reasons that make it harder. For example, there may be generational differences in salary (earlier employees got paid more). So, even if you know how much you’re getting paid in comparison to your colleagues, that might no longer be in line with what the company is willing to pay. There are always changes, developments, and discussions around topics like this so it could be that what was true last month isn’t the case anymore today. Learning how to navigate this conversation as a whole is not easy, but the tips below should hopefully help you do better in all circumstances.

Why is it still worth asking for a pay raise?  

If, after all of that, you’re hesitating about whether you really want to do this or not, don’t. It’s incredibly important for you to understand that you have to accept responsibility for your own life circumstances. Learning this lesson will help you in every meaningful way possible. There’s nothing wrong with wanting to earn more money and to better yourself. Earning more money can have a huge impact on your life when it comes to your living standards, your investment opportunities, your independence, your goals, and the life you’re able to provide for your family. Maybe you’re suddenly able to start saving money that you can invest in the future. Maybe you start being able to afford to invest in yourself, by signing up for a course or learning something new. All of these are opportunities that will have an impact on your future. It does not matter whether you’re looking for a small increase or a large increase. It’s much easier for you to progress in life if you have goals and an idea of what you’re working towards. A higher salary is often an indication of progression: you’ve levelled up in one aspect and one area of your life. That’s something that you can be proud of.

This is what would happen if you’re successful. The point of the advice below is to increase your chances of success as much as possible. That said, whether you’re successful or not, the act of asking alone is a way of taking a step forward and learning to negotiate on your own behalf. Fundamentally, asking for a pay raise is a way of advocating for yourself and looking out for your future. Some of the content here is around figuring out whether you should even get a pay raise or not and building a case for yourself. Going through these steps, in general, is a great way for you to understand where your performance level is at, what the usual salary range for your position is, and what your chances of getting paid more are. This is research that will pay off in your future, even if it doesn’t work in your current position. You can use this experience if you ever have to change jobs, too.

Every single time you discuss salary, it’s an opportunity for you to get more comfortable talking about money in relation to your performance and your contribution at work. The better and more confident you are in facing this conversation, the more likely it is you’ll succeed. You are working towards succeeding, first and foremost, but it’s important to remember that there’s sometimes a lot of value in doing something for its own sake. This is one of those situations.

On a much bigger scale, taking responsibility for some parts of this conversation and doing what you can to influence your salary is something that every individual should do. It does require being in a position of privilege. Getting to a position where everyone is paid even a little bit more is essentially an investment into economic value across different layers of society. It will reduce the ever-increasing gap between rich and poor (to a small extent). Every individual having more money available will ultimately share wealth with everyone.

How to ask for a pay raise

Be objective in your mindset

This is the most difficult part of getting it right, but it’s also the most essential one. Everything else, in terms of doing research, being prepared, and how to have the conversation itself, will be very hard to do, if you are not approaching it all from the most objective mindset possible. Being totally objective is obviously impossible, to a certain extent, because you will be assessing your own performance and deciding what kind of salary you, personally, feel that you deserve based on that. Whatever you can do to make that assessment as objective as possible will have a huge impact on the likelihood of success.

There’s a tendency to say “I deserve more money because I’m working incredibly hard and I’m doing the best job I can.” This isn’t a bad tendency, in and of itself, but it isn’t enough. You need to be able to demonstrate value that everyone around you recognises. What’s the actual, visible impact of you working incredibly hard? You need to find a way to separate your own personal investment in the outcome of this conversation and this objective assessment of your performance. You need to have enough emotional distance to be able to have the conversation even if it isn’t heading in the direction that you want.

The most effective way I’ve found to do this is: build a separate persona or an image of a person in your position that is doing the most amazing job you can imagine. Look at all of the tasks you do on a day-to-day basis. What would doing an actually perfect job at all of those tasks look like? Then think about all of the other aspects of your job that aren’t task-based: teamwork, giving and receiving feedback, living your company’s values, impact on your own team and on other teams. Admittedly, these are especially hard to assess because your perception of them is likely to be very different to everyone else’s but it’s still worth trying. However, don’t try to apply any of this to yourself or your performance yet. You’re just building an external persona (one that could never exist because no one is that perfect at everything they do). Something that might help is thinking of everyone in your team and the ways in which they contribute. What do you love about working with them? What do they do really well?

Use this persona to develop a set of criteria for yourself, by which you can judge and assess performance in your position. This is actually an incredibly difficult task. Developing a set of criteria like this and refining them over time is, indeed, a key managerial responsibility. Drilling down on the aspects that truly matter in a performance assessment is incredibly difficult because a lot of those aspects are hard to define and most of them are impossible to measure. So don’t get caught up in being perfect and don’t feel discouraged if you get a little stuck. The idea is just to work towards something that you can use. Once you have a list of criteria here, you can compare them against your job description and see if there’s any crossover. If there are zero crossovers, you might have been overthinking it a little. If at least some of the aspects are similar, then you have something that works.

Now that you have these criteria, try to think about your performance in comparison to them. What aspects are you great at? What are you not so good at? If you’re finding this difficult, you can always ask for feedback from your colleagues or think about it the next time you get feedback from your manager. Do your best to play devil’s advocate here. If you think you’re great at something, would your colleagues agree? In which ways are you maybe not so good at that same aspect? Getting used to thinking about your performance from this lens should make it easier to handle the whole conversation.

Most importantly, try to keep in mind that, for all this conversation will feel immensely personal, your manager and your company have other aspects that they have to take into consideration, many of which will never be transparent to you. Approach it as a learning exercise and try to learn from the experience. Do your best to not get hung up on the outcome. It would be great if it works out! But it’s okay if it doesn’t because you’ll hopefully learn what you need to do for the future.

Research salary ranges

Now that you’ve tried to get yourself in the right headspace and you have some outline of what an amazing performance would look like, you can start doing external research. Try to find out what the salary ranges for your position are. Try to also search for your industry, field, and area. Since salary ranges differ dramatically depending on where you’re located, it makes sense to consider that as well.

If you’re very lucky, your company might already have salary ranges that are transparent to everyone. This is a great starting point but take the time to do independent research as well. You want to get example ranges from multiple different sources, just start by using Google and see if you can identify a few sources that seem reliable. Glassdoor is usually a good starting point across many industries.

By the end of your research, you should have an idea of what the usual range is for your position. Figure out where your salary sits within that pay range. This should give you a starting point when it comes to understanding your pay. Ideally, your current salary should sit somewhere within that range. If it’s already in the high end of the range you find, you will likely have to make an argument for why your contribution is even higher than the expectations of your position. If your salary is rather on the lower end, you’ll hopefully have an easier time making the argument that your contribution is worth more. If your salary is even below the lower end, you can make an argument that you’re actually underpaid for your position in your industry.

Break down your own contribution

This is the point at which you can start looking at your own contribution. Break down the value that you bring to your company. There are a lot of different aspects to this but here’s a starting point:

1) Your experience.

How many years have you been working in total? How many years have you been working in this industry or this position in your company? Is there anything unique about the experience you have to date?

2) Your education.

Education here doesn’t refer to degrees alone (although they help to a certain extent, depending on the position). It includes other certifications and courses as well. If you’re actively investing in your education and you have paperwork and documentation that back that up, that’s something to include here.

3) Your unique skill set.

This is essentially the outcome and combination of the above two points. What skills do you have? What can you do really well? How easy is it to develop those skills from scratch?

4) Your performance.

Hopefully if you did the earlier exercise in breaking down criteria and building a persona, you’ll have an easier time doing this. Take out all the notes you have from performance conversations as well. Where would you say your performance is at? What would it take to bring your performance to the next level? Are you a high performer or an average performer? Be as honest as you can be with yourself. In an ideal scenario, your perception of your performance should always be pretty close to your manager’s. If that isn’t the case, that’s something you have to address with them.

5) Your responsibilities.

What are the tasks that you do on a day-to-day basis? Have they changed or grown in complexity since your last salary discussion? This is a fundamental question to ask yourself. If your performance is stable and your responsibilities haven’t grown, you can base your argument exclusively on experience. This isn’t the strongest argument if you aren’t able to demonstrate how that experience resulted in an improvement. Growing in responsibility doesn’t have to translate to managing people if that isn’t where you want to go. It can mean managing tasks, growing in expertise and therefore becoming better able to help other people in your team, or taking ownership of certain areas.

6) Your impact.

What is your impact on your team and the people who work with you? Would they notice if you weren’t around? Does your team work better when you’re around? This is another huge lever when it comes to salary discussions. If you’re able to show how the tasks you work on positively impact the team and the company, especially if that impact is unique to you, then you have a very strong argument for why your contribution should be worth more to your company.

Holistic impression

Those were the six key aspects that you can think about in every company and every position. Your company might take other performance metrics into consideration. They might look at your productivity (how much you actually get done) or compare it against some kind of performance measurement (what kind of feedback do you get from customers). A lot of these aspects are also influenced by how others perceive you. Do you get positive feedback from other colleagues about your work? That’s a great sign.

What you want to do is build a holistic impression of your contribution. This is the kind of background work that your manager should be putting into the salary negotiation for you. When your manager makes you an offer, that offer should take as many of these into consideration as possible. This is why trying to mimic that work for yourself allows you to leverage these in a way that’s meaningful for you. The deeper your understanding of these, the better an argument you’ll be able to build for getting the salary that you want.

This is incredibly difficult to do well but do your best to put yourself in the shoes of your manager, or any other external person who’s looking at your performance from an outside perspective. If you find your impressions 100% positive, that’s usually a sign that you’re looking at this from the wrong angle. This is also the case if your impression of your work is 100% negative. The truth typically lies somewhere in the middle.

Understand salary negotiations in your company

Before you sit down and talk to your manager about your salary, find an opportunity to talk to them about salaries in general. So many of the misunderstandings and conflicts I’ve seen happening around this topic are because people don’t start on the same page, so the communication gets very confused. Under what circumstances does your company generally provide a pay raise? What do they take into consideration? What kind of structure do they have around it? How do they ensure fair pay? What kind of pay raise do they give to denote “good job, we’re happy with your performance” versus “great job, we’re impressed with your performance”? All of these are important questions to ask. I’d argue that every manager or HR department should be able to have that conversation with every one of their employees.

The point of this isn’t to interrogate your manager or to question them thoroughly. Sometimes, especially if people are taken by surprise and aren’t prepared, they won’t have great answers for you. So let them find the information and then get back to you. You can say things like “I was curious and want to understand how you approach pay raises.” You’ll be surprised at how open most people will be with you. The great thing about having this conversation before making any requests is that your expectations will be more realistic. If your manager says “usually a 10% pay raise constitutes significant growth in terms of responsibilities,” you’ll know if this is a requirement that you meet.

It’s hard to say how open or how helpful this conversation will be for you because it depends so much on your context. It’s definitely worth having that conversation, though. Whatever information you get is more helpful than having no information at all. You don’t lose anything by trying it. The best outcome would be to walk out of it with an idea of how your manager and your company approaches salary negotiations. One of the more frustrating experiences I’ve had was with a member of my team, who built a completely false impression about pay raises in the company based on someone else’s experience. This is very easy to avoid with some attempt at communication.

Set personal targets for your salary

It’s incredibly difficult to understand exactly where you want to be, in terms of salary. It’s also hard to link that to what is realistic for you in your current position and in your current company. Most of the limits that come your way aren’t explicitly set, but you should always go into it with the expectation that there will be a salary cap somewhere. There are two things that you should try to set as targets for yourself:

1) What is your ultimate goal from a salary perspective? How much money would you like to be earning from working full time?

2) What is the maximum that you can expect from your current position?

The first one is important primarily for your long-term planning. Think about your current lifestyle and the lifestyle that you’d like to have. What would you need to be able to afford it? Try to make this a realistic goal that you could achieve, something that you’d be happy with. Some people will define that goal in the hundreds of thousands of dollars. Chances are, for the vast majority of people, that isn’t something that you can aim for from an employee position. So, look at your life circumstances and set a target for yourself.

Based on your research above, you can try to set an estimate for what you can expect in your current role. It might be worth having this conversation with your manager too, just so you can have realistic expectations. It’s important to remember that your current position doesn’t have to be permanent. If the gap between your desired salary and between what’s realistic in your current position is large, this should hopefully give you an idea of where and how you could develop to earn more money in the future.

Now that you have these two numbers, you can look at your current salary and try to figure out something to aim for from this pay raise. Working with ranges is usually best because static numbers aren’t necessarily that meaningful. Give yourself a range that you’d define as a fair salary for your contribution, and another one that you’d say is a great salary.

If you’re approaching this from a different perspective because you feel underpaid, then define your minimum acceptable salary and be honest about it. It’s extremely demotivating to work somewhere if you don’t feel like your work is valued and that you’re paid unfairly. It will be a draining experience, not only for you, but also for the people who work with you.

Decide on the pay raise

Now you have a ton of background information that you can pull into making this decision. The first decision is whether you’ll ask for a pay raise or not. The second decision you need to make is how much of a pay raise you’d like to ask for.

Try to think of your salary as a qualitative measure of the value you represent for your company. It might sound harsh to think of it in those terms. We’re all fully rounded individuals and can contribute in a huge number of ways, most of which are extremely difficult to define in numbers. Many roles are generally undervalued by their industries. This is all true and can’t be avoided. That said, your salary is the only number that all of those above aspects get “measured” with. So think of your impact, as an individual. Think about your development since your last pay raise. What skills have you developed? What can you do better now? Can you definitely say that you bring more value to your company now than you did whenever that last discussion happened? If yes, then you should ask for a pay raise.

If your answer is maybe or you’re rather leaning towards no but you’d still like a pay raise, you should approach the conversation from a totally different angle: look for ways to develop first. Talk to your manager about that instead. Only when you can confidently say you bring more to the table now than you did previously, is it the right time to have this discussion.

To decide on the pay raise itself, pull on the research and background work you’ve done to date. It could be that you have developed but that your salary is already pretty good based on your research. In this case, you can still ask for one but maybe not as high as you would otherwise. If you’ve developed (in skills or in responsibilities) and your current salary is mid-range or even on the lower end of what you’d expect for your position, then you can ask for more.

Write down arguments

Now you’ve decided what kind of pay raise you want to ask for, you can start building your argument around it. The crux of your argument should be something along the lines of “I am more valuable to the company now than I was when my current salary was decided.” You should be able to demonstrate exactly how you’re more valuable to the company now. You should always lean towards providing objective facts, not subjective impressions. You also want to provide specific examples. For example, your argument shouldn’t be “I’m a hard worker and you can see that in my everyday work.” It should rather be “as you could see from my work on this project, it was successful because I did the following things, and developed and brought in the following skills.”

Ideally, you want to have around 3-4 strong points with specific examples that you can fall back on. I’ve always found it much more helpful to write them down because that forces you to figure out how you want to articulate them. This will make you more confident in the conversation itself. It will also give you the ability to strengthen those arguments if you aren’t satisfied with how they sound. One of the difficulties here is in avoiding giving the impression that you’re only doing certain things to earn more money. Don’t list every single, small thing you’ve done that might be construed as additional to your day-to-day tasks (“I help my colleagues when they have questions”). Avoid falling back on a performance level that’s simply part of your job. For example, if you work in a support team, an argument on the basis of “I answer tickets” is probably not going to be strong. The current base salary that you earn already covers that.

You want to come up with points that are more meaningful. Something like “I ran workshops and prepared this documentation because I noticed my colleagues needed help in this area, and received great feedback for it” is much more powerful than the example above. If you can string a few of these together, you’ve built a great argument. If you can’t, my advice would be to stop here and to work with your manager on development options first.

I’ve asked people in my teams to do this in the past when they’ve asked for a higher pay raise than I originally offered. Some people reacted to that with aplomb. Most people gave me feedback that having to do this made them feel undervalued and unappreciated. This might be a feeling that you have at this point: why does it take so much effort to ask for a pay raise? Why can’t your manager simply say yes? The simple answer is: they could, and you don’t have to put this much effort into it. It could be that you do all of this preparation and then walk into your next annual review and the first offer your manager makes is the one that you want. That would be great.

In an ideal world, no one would ever feel underpaid and there would never be mismatches between what a manager considers a fair salary for someone and what that person thinks is a fair salary for themselves. But salary negotiations are rarely that straightforward. Even if you have a ton of salary transparency in your company, with clearly defined structure and salary bands, there will still be disagreements about where a person sits within a range. Learning how to do your own independent research, and how to break that down into a negotiation in your favour is how you set yourself up for success.

Talk to your manager

By this point, you should hopefully have a document prepared with the salary raise you’d like and the arguments you have to back it up. Now you can set up a meeting with your manager. You can either follow your company’s regular cadence (most companies usually have a salary discussion once a year, in an annual review) or you can set up an individual meeting for it. To do so, just tell your manager that you’d like to talk about your salary, so they’re prepared when they go into the discussion.

During that meeting is when being objective, articulate, and calm really matters. Start by saying that you’d like to get a pay raise. Ask for a specific amount and then explain why you think you should get it, as openly as you can. You can talk about the research you did coming into it but focus on your individual contribution and your impact. Try to cut yourself off if you find yourself rambling. Focus on making the points that you prepared and then wait and listen to the response.

If the answer is a no at this point, try not to get angry or frustrated by it. Your preparation until this point was still valuable and useful. Treat this is a good opportunity for you to understand if there’s something else you missed. Maybe your manager is taking something into consideration that you haven’t thought about. This is when you can learn it for the future. In this case, you want to walk out of this meaning with a clearer idea of what you would need to do to earn more money in the future.

If the answer is a yes, then congratulations! Your efforts paid off.

Resources

We’re planning on preparing the following resources for you – depending on interest and requests we’re going to prioritize working on these over the many others we have lined up.

  • Preparation sheet, guiding you through the above steps
  • A script that you can fill in and use, with some example phrases and communication guides

If you check them out, we’d love to get your feedback.


Tags

money, negotiation, pay raise, payraise, salary


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