In the July 24, 2018 Ask The Headhunter Newsletter a high-performing reader is looking for a raise.
Next month I’ll have my three-year performance evaluation, and I feel that I am worth more than my current salary. How do I convey the message that my job is worth more and ask for more money?
As my company has grown, so have my responsibilities. I’ve really stepped up to the plate. I’ve earned recognition, but it’s not reflected in my pay. Through discussion with peers in the industry, I have learned that the average salary is much higher. Could you please advise me how to approach my boss during the evaluation, so I can convince him my request is justified? What should I say and not say? Thank you kindly in advance.
There are entire books written about this topic, and compensation experts will offer negotiating strategies galore. But I’m going to refrain from a long lecture, because I think you can figure this out yourself if you keep some basic ideas in mind.
No more boring performance reviews
What you should not do is walk into a review meeting, show some salary surveys, and expect your employer to cough up more money “because that’s what other people who do my job are being paid.” You must justify what you’re asking for.
Perhaps more important, performance evaluations and reviews are the bastard children of Human Resources. They are increasingly ignored in most companies. This is actually good news for you. If you’re going to have an evaluation at all, it will likely be very canned and scripted — and the manager doing it will be bored and in a rush to get it over with.
That’s your chance to take control and turn it into a useful, meaningful and engaging planning session. No more boring reviews! Stand out by showing your boss that you are 100% focused on doing your job — to make him and the company more successful.
Earn a raise with a business plan
A salary renegotiation is pretty simple conceptually: It’s best done with a business plan. In other words, do an analysis of your role as though your job constitutes an independent business. Don’t talk about your qualities or about what others are being paid. Talk about your company’s business and what you add to the bottom line — and what you will add in the future.
- How do you contribute to revenue?
- What does it cost to have you do what you do? (This includes not only your compensation and benefits, but the cost of your tools, the cost of your team and support personnel who help you, and so on.)
- What’s your history in terms of the profitability you bring to the company? (That’s right: Your contribution to revenue matters, but how you impact profits matters more. Even if you can’t calculate a specific number, you need to outline a defensible case that goes into the profit factors you influence.)
- What are your profit projections for the next two to three years? That is, make some projections of how you will contribute to profit. You’ll need solid evidence to back these estimates up.
Every job is a business
A job is a business. Managers forget that — so explain it to yours. That’s the key to thinking about this in terms your management will understand and respect. As in any business plan, your goal is to demonstrate how an added investment will pay off. You must show a rising return on the company’s investment in you.
The longer you’re working for the company, the more profit you should yield. A lot of this is number crunching, of course, and there’s seat-of-the-pants estimating involved.
Please read that last part again: There’s seat-of-the-pants estimating involved.
Negotiation is a dialogue
This will scare a lot of people off for fear their employer will challenge the estimates. That’s exactly what you want! A dialogue. A debate. A roll-up-your-sleeves talk about your job! That’s what your evaluation should be.
If your boss is worth working for, then your boss will see that you are worth a good raise because you’re thinking about the company’s bottom line and that you are prepared to discuss the future of your work intelligently.
It will help enormously for you to interview people in the company who factor into this plan — before you meet with your boss. In the process, you will not only build your case, you will also influence (and remind) other key players in the company about your worth. Then ask them to join the dialogue by putting in a good word for you with your boss!
How do you ask for a raise? Have you had a performance evaluation in the past year?