Asking for a Raise

If you already have a job but feel underpaid, you may be thinking about asking your boss for a raise. If this is the case, you need to be prepared to convince the powers that be that you not only deserve one, but that you're worth it. Don't make the common mistake of basing your request on your need for more money or your inability to meet your financial obligations. Businesses do not base salary increases on employees' personal needs; they base it on employees' worth to the company, the quality of their work, company pay scales, and budgetary concerns. Need has nothing to do with it, so it's best not to talk about need when asking for a raise. Keep the conversation centered on how the company benefits, not how you benefit.

What's the number one rule for requesting a raise?

Don't give ultimatums. They'll put your boss on the defensive, and may force you to quit your job or eat crow. Your goal is to convince your boss that you're worth more money because you do an exceptional job or you've accepted additional responsibility that warrants an increase or promotion.

Evaluate Yourself

First, perform an evaluation of your skills, productivity, job tasks, and contribution to the company. Look at your job duties and performance from the company's perspective and base your approach on the company's needs. If you have a written job description, dig it out, along with copies of your last two or three written performance reviews. On your job description, jot down the major tasks you perform that may not be part of your formal job description. The goal is to show or remind your boss of your tangible contributions to the company, so make a list of your accomplishments, and if possible, the dollar value of each to the company. For example: “I saved the company $20,000 this year by researching and negotiating contracts with new vendors.”

Determine the Going Rate for Your Job

Next, you need to determine the going rate, both inside and outside the company, for what you do. Ask your company's human resources department if there are company salary ranges for your position and several related positions above yours. Review these, along with the salary information and compensation surveys you obtained from the Bureau of Labor Statistics' Web site. National information can give you an idea of what jobs similar to yours typically pay, but salaries vary from one region to another, so be sure to consult some local information as well — by reading help-wanted ads, talking to friends and associates, or making a call to your local human resources organization, such as the Society for Human Resources Management (SHRM) (www.shrm.org).

The Internet is the easiest way to obtain information about jobs and wages. JobStar at www.jobstar.org offers more than 300 salary surveys by profession. You can also view the Bureau of Labor Statistics' Occupational Outlook Handbook and wage information online at www.bls.gov.

Know Your Company's Policies and Financial Status

To increase your chances of getting the raise you want, you need to know several things about your company. What is the policy on salary increases? Are all employees reviewed at the same time each year? Does your department have a budget for salaries that they're required to stay within? If so, you're in direct competition with the other employees in your department for limited funds, and you should work on making yourself stand out above the crowd.

What is the company's financial condition? Are they struggling to stay afloat? Are they in a budget crisis? Perhaps it's been a good year and there's bonus money to be awarded to deserving employees, but no salary increases. The more you know about the company's financial situation regarding compensation, the better prepared you'll be for your salary negotiation.

Pick Your Time Carefully

Timing is everything. If you've only been at your job for a few months, asking for a raise probably won't go over very well. However, if you find after a few months that you were hired at a salary well below that of others in your position and with your experience, it may pay to discuss this with your supervisor. If you've been formally or informally disciplined or chastised recently, wait at least a few months before asking for more money.

The time of month, week, and day are also important. Don't ask to meet with your boss during the busiest time of the month or busiest days of the week, which for most people are Mondays and Fridays. It's to your advantage to arrange an appointment at a time that's convenient with your manager. There will never be a perfect time, but you can at least use a little strategy.

Consider Benefits in Lieu of Salary

Not all companies are in a position to raise salaries. However, they may be able to offer you additional benefits instead, such as extra paid leave, tuition assistance, stock options, overtime, or a promotion, if one is warranted. When comparing salaries, it's important to consider the financial value of these and other benefits and perks. If your company pays for all or part of your health insurance, this is as good as money in your pocket. The same is true of a 401(k) match.

The average employer spends 42 percent of salary costs on employee fringe benefits such as insurance, vacation and other paid leave, retirement contributions, and tuition assistance, including mandatory benefits such as state and federal unemployment insurance and workers' compensation insurance. The average employee making $40,000 per year receives $16,800 in benefits.

If at First You Don't Succeed …

If, after all your preparation, you don't get the raise you've requested, don't respond with sour grapes. Ask your boss what you'd have to do to qualify for an increase or a promotion, accompanied by a pay adjustment, and then renew your efforts to improve your performance. Make sure your boss is aware of what you do and how well you do it, and document your accomplishments in preparation for your next opportunity to discuss your salary.

If you meet with several successive rejections, assess your situation. Take an honest look at your value to the company and the company's value to you. Again, the paycheck isn't everything — you may benefit greatly even if they won't pay you more. Nevertheless, it may be that you need to consider other options. If so, look for other possibilities but handle yourself with class — you never want to burn any bridges or ruin your reputation.

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