Negotiating for a Pay Rise

Executive Summary 

Employees usually find it very scary and sometimes difficult to discuss certain subjects with their managers. This is primarily for the employees who do not frequently come into direct contact with the managers. Starting the conversation over subjects such as a pay rise can be the most difficult for the employees even if they deserve it. Asking for a pay rise without first planning and getting prepared can be the biggest mistake to do as an employee. Managers may not be willing to engage in pay rise negotiations more frequently, and thus the only chance one gets needs to be utilized well. However, it gets much more comfortable to start the conversation about pay rise with the manager if one appropriately prepares for it. While it may look difficult, it is just but another form of negotiation, and with appropriate negotiation skills and the right facts at hand, one is good to go. Many employees frequently report fearing to start a conversation with their bosses about the pay rise. Many others get their pay rise request declined by the manager because they go to the conversation without doing their research to have the right facts at hand. First research is necessary as the first planning step before going to the negotiation table with the manager over salary increment. Starting such a conversation without doing proper research about what other firms pay for the same job responsibility can be so frustrating to the employees and may always result to the request being declined. Because many employees lack proper skills and the right procedure to ask for a pay rise, many remain at the same level of pay even if what they receive is much below what others in the same position are receiving. 

Introduction 

The Great Recession has now become a thing of the past even though its effects are still widely visible especially in the lackluster wage growth. For some employees, job hopping is the way to get bigger pay while for others, staying put in the same organization is the way to wait for opportunities. Whatever the direction that one chooses, discussion a pay rise with the manager has always been the most intimidating and caring thing for the employees. Millennials are less likely to ask for a pay rise due to fear of the outcome from their employers. What creates fear amongst the employees to start such a tough conversation is the way their employer may view them. Some also feel that they may get fired for having asked for a pay rise. However, employees need to understand that asking for a pay rise is not a tough task, but a simple form of negotiation. The major problem is that most employees lack the salary increment negotiation skills and as a result of this, they use a wrong approach to discuss pay rise with the employers. A recent report in the business journal shows that more than 50% of the employees are less likely to face their employers over the pay rise discussion ( Van Wanrooy et al., 2013). Even though they desire to get a pay rise, they keep their desires inside for fear of what could be the outcome. While employers are not responsible for making pay rise without merit, they understand that employees also need more pay based on merit. 

Pay Rise Statistics 

Many employees report that they fail to get what they ask for during a pay rise conversation with their employers. According to the Wall Street Journal, 60% of the employees who ask for a pay rise failed to get what they asked for ( Van Wanrooy et al., 2013). 30% of the employees get what they ask for during a pay increase negotiation while 31% report to have gotten less than what they ask for. 20% of the employees report that their pay rise request to their employers get declined even though they feel that they deserve the pay. These statistics show that the issue of dealing with pay rise conversation is a major area of concern and needs to be addressed. A survey by the Wall Street Journal in which managers were asked about discussing pay rise with their employees, 70% said that most employees do not understand why they need a pay rise and some lack the statistics and facts about the pay scale within the industry ( Marescaux, De Winne & Sels, 2013 ). A report by PayScale shows that the most common reason that employers gave for declining their pay rise request was due to budgetary constraints, a claim that most employees did not believe. 

How to ask for a Pay Raise 

Asking for a pay rise requires proper planning and accurate research that will not lead to intimidation before the employer. Employers will always want the employee to provide a convincing reason why they need a pay rise, and unless they cannot offer a convincing reason with facts, their pay rise request is bound to fail. Employees, therefore, need to plan appropriately before they arrange for a meeting to discuss the pay rise. 

Research Appropriate Pay Rise 

Familiarize with Pay Practices 

The first step to successfully ask for a pay rise is to understand the pay practices of the employer and the pay rate for the same job in the market. Every organization has pay practices and policies that guide on the way they make their pay increments to the employees. Before approaching an employer with the pay rise request, first understand and be familiar with the pay rise practices ( Marescaux, De Winne & Sels, 2013 ). In case the standard practice is to provide the salary review once a year, then it is more unlikely that an employee can make a pay rise request at any time of the year. However, for the firms that permit pay rise at any time, then the employees can have the right to negotiate for a pay rise at any time of the year. At the same time, it is essential to understand the pay rise rate of the company because one is less likely to get a pay increment that is more than the company stipulated annual rate. Having such information at the fingertips is the first step to getting a successful salary increment negotiation and avoiding intimidation during the negotiation process. One the employer is convinced that an employee has knowledge and facts about the pay rise policy and practices of the company, a decline to the request is less unlikely. However, approaching the manager for pay rise talk while having no knowledge about the pay practices of the company will only provide the manager with an opportunity to give some lectures about the company pay practices. 

Research Market Pay Rates 

Having all the information about the market pay rates for the same job position can provide a better avenue for negotiating a better pay rise. It is less unlikely that the manager can provide a pay rise that is higher than what is currently paid to other employees for the same job position in the market. To improve effective communication and negotiation, employees need to find some facts about what other firms and industries pay for the same position ( Xiu, Kang & Roline, 2015 ). Once this information is at the fingertips, the employee will have more confidence starting the conversation because there is sufficient backing for the request. While getting the market pay rate may not be an easy task, reading business journals, discussing with friends in other organizations and searching through the internet can help provide such information ( Molloy & Barney, 2015 ). Pay rise negotiation can only be easy if the market pay rate is higher than what the employee receives. However, if what is paid is already higher than what others in the same position receive, then starting a pay rise conversation with the managers can appearvery tough. Presenting the manager with a visual representation of how the pay rates stand at the market can provide a better convincing tool to get started. Visual representations usually communicate louder than words and can be an excellent convincing tool to get a better pay rise. 

Figure 1.1: Pay Rates Comparison 

From the above graph, the market pay rates stands at 75.5% while the company pay rate is at 73.5%. An employee can present this chart to the manager to provide evidence that other employees in the same position are paid more than what the company pays. 

Read the Employee Handbook 

The best way to make the pay rise conversation easy is to follow the due process set by the organization. The employee handbook usually contains crucial information regarding the process of negotiating for a pay rise and under what circumstances it is granted ( Gerhart &Fang, 2014 ). When there is a policy process, then the best thing to do is to follow that process to the latter. Managers are there to follow and implement the policies of the organization, and by following the set policy procedure, the manager is more likely to see an employee as a law-abiding worker. This can be the tipping point to get the manager convinced that indeed a pay rise might be necessary. If the handbook states that an employee can only receive a pay rise annually, then it can only be a waste of time talking about it with the manager when it is not the time. Adhering to the policy and guidelines as provided in the handbook is, therefore, one of the best steps to initiate the discussion with the managers about a pay rise. 

Network with Other Employees 

Networking with other employees doing similar jobs in other organizations can provide useful tips and facts about the pay for that particular position. Do not start engaging the manager in the pay rise talks before understanding what other employees receive in other organizations. Salary competitiveness is a good thing to consider before starting the increment conversation. If the other employees in the same position working in other organizations receive more, then this can be a very good convincing point to present to the manager. Organizations do not like high employees’ turnover due to the high costs that usually come with it ( O’Meara, 2015 ). As a result, they would want to provide a competitive salary that compares with what other firms pay so that they retain some of their best-talented employees. Presenting this fact can, therefore, work well to increase the chances of getting a pay rise. Managers also have the information about what other firms pay, and so it is important to use the right information if you are to convince the manager. 

Have the Right Frame of Mind 

The best way to get better communication and negotiation with the manager over pay rise is to have the right mindset. According to the Wall Street Journal, many people start to think about the need to discuss pay rise after they develop a sense of mismatch between what they contribute and the compensation they receive ( Bowles & Babcock, 2013 ). While this might look okay, the problem starts when there is a wrong motivation for initiating the conversation for the pay rise. Waiting unit one starts to develop negative emotions and feeling anxiety can make it difficult to negotiate for an increment effectively. This is a negotiation and one has to develop a positive and open mind. The recent research shows that an employee is five times more likely to get a higher value outcome when he/she can neutralize the negative feelings and focus on what is accurate and relevant. Therefore, effective pay rise negotiation requires that an employee steps back and identify where the sense of mismatch originates and then recast everything in a positive light ( Singh, 2013 ). Focus on critical aspects such as the major performance metrics that have been achieved to warrant pay rise and the performance improvements recently made or the incentive targets exceeded. Managers like to reward best performers, and by presenting the information about such performance metrics, it is more likely that the manager will be convinced to reward such hard work. 

Make a List of Accomplishments 

One might have made tremendous achievements but assuming that the manager is aware of them might be a wrong thing to do. Talk to the manager about the additional capacity added to the team and the value added. Keeping track of all the accomplishments and then presenting them to the manager can provide the best grounds to win the conversation over the pay rise ( Cleary, 2016 ). Otherwise engaging the manager in conversation regarding pay rise without presenting key performance metrics, value-added and major improvements may result in a decline in the request. Remember that your organization is in business and unless you make a great contribution towards the success of the business, then the manager may not see sense to reward more. It is necessary to create a list of all the accomplishments for tangible proof of all the successes. These accomplishments are what can motivate the manager to want to reward by giving better pay to avoid losing such talents to the competitors. 

The employee must provide useful data to support the reason for asking for a pay rise. After presenting the list of accomplishments, explain to the manager how these achievements have helped the company move to the next level. Present a document to prove costs saving, excellent staff development, productivity improvement, important projects achieved and the ways in which you have made more contributions than what is required in the job description. All these must be documented to justify a pay rise request. 

Make a List of Additional Responsibilities 

Presenting the additional responsibilities that have been added to the job can also form an excellent proof to justify a pay rise. An increase in the responsibilities can involve more employees managed in the team or additional special projects beyond the prescribed job description ( Grimshaw, Bosch & Rubery, 2014 ). The manager is more likely to understand that an employee has extra responsibilities over the job description and therefore warranting a pay rise. Facts and evidence can do a good job of convincing the manager that the pay rise request is indeed justifiable. Without these facts and proofs about the contributions made, managers may not see any reasonable justification to warrant a pay rise. 

Ask for a Face to Face Communication 

Engaging the manager in a face to face communication can increase the chances of an employee effectively convincing the manager to give a pay rise. Face to face conversation provides an opportunity to give valid and serious convincing reasons for requesting a pay rise, and it is also not easy to turn down ( Lee & Sabharwal, 2016 ). Meeting with the manager in a face to face conversation allows one to gauge the reactions and make a counter-argument through the negotiation process. Sending an email may not provide that opportunity to gauge the reactions of the manager and sometimes, the manager may fail to respond to the mail. Because asking for a salary rise seems to be a difficult topic for the employees, many shy away from directly approaching their managers in a face to face conversation and instead send emails ( O’Keefe & Wang, 2013 ). However, meeting the manager in person looks more serious and grants an opportunity to negotiate on a one to one basis effectively. Therefore, employees should seek for the audience of the manager in a face to face conversation rather than sending emails. 

Best time to ask for a Pay Rise 

The best to ask for a pay rise is mainly during the annual performance review, which is mainly at the end of the company’s financial year. According to the survey conducted in 2016, there are moments when managers are most likely to accept a pay rise request and the times when they are most likely to reject ( Chen, Fujishige &Yang, 2016 ). A manager is less likely to give rise after the company has made substantial financial losses. It is important that the employees have the information about the performance of the firm so that they are aware when the company has made a profit or a loss. Certainly, managers are usually in good moods after the company has posted positive financial results and at such times, asking for a pay rise can be most appropriate. Communication and most importantly, negotiation requires that a person is in good spirits and the right mental state. Employees must understand the times when managers are at difficult times, especially after a financial loss. This is because, at such times, managers are not in their right mental state to negotiate effectively. Asking for a pay rise during the times when the company has posted good results and everyone is happy can help the employees deal with anxiety and fear of raising the topic. According to the salary survey conducted in 2016, 67% of the employees report that they lack confidence and feel uncomfortable to raise the issue of pay rise with their employers ( Chen, Fujishige &Yang, 2016 ). However, confidence can increase when everyone is in the good moods ready to engage in effective negotiation. 

Maintain Confidence 

Confidence during negotiation can always work to create a win/win outcome for both parties. Employees must demonstrate high levels of confidence so that the manager can see their seriousness and understand that they have facts to warrant a pay rise. Shivering and panicking while talking to the manager during a pay rise negotiation can limit the chances of getting a win/win outcome. Even though the topic can be very challenging to raise with your employer, doing enough research before getting into the conversation can save one from panicking. Maintain confidence and talk persuasively and objectively in a way that can please the manager. 

Conclusion 

Engaging the manager in a conversation over pa rise is one of the most difficult and challenging tasks for the employees. Starting such discussions can always appear scary and frightening, and unless one prepares and plans well, the outcome can always be so intimidating. Employees must first gather enough data and facts about the company’s pay practice, the market pay rate and other facts before initiating the conversation. Documentation of the performance metrics, improvements and value added to the company must also be presented to the manager as a proof to justify pay rise. Without proofs to justify such a pay rise, managers may not get convinced over the request. Despite many employees shying away from approaching the managers over pay rise talk, the issue is not a tough task as many may think. All that one requires is to do enough research and present all the required facts to the negotiation table. Preparing well before initiating the process can also help eliminate panic and scare that comes with such a sensitive topic. 

References  

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