The office mood is dour, with broad hints of wide layoffs and narrow raises. Your performance review is coming. Two percent just won’t cut it.
Should you accept your raise or start haggling for more?
In this climate, you may want to try both: Suck it up and take the raise, but set a date with your boss to pick up the negotiation in another few months.
Salary increases are expected to remain at 4 percent for the eighth consecutive year, but many employees are seeing even less in their paychecks.
If your company is in a downsizing mode, talk to your manager about the firm’s future plans, said Frank Belmonte, a human resources consultant with Hewitt Associates in Lincolnshire.
“You need to ask the manager what are the plans of the company once it’s past this economic downturn,” Belmonte said. “What’s the timing of the recovery: one year, three months, six months away? If the timing’s uncertain, ask what you can do to get a better raise next year.”
Belmonte suggests asking the manager what next year’s budget looks like. “Maybe it’s the responsibility of the employer in situations like this to have a plan in place so you don’t have to ask. The company should provide enough information so employees aren’t in the dark.”
If you decide to go ahead and shoot for the extra cash, do your research. Come up with talking points about your value to the company and present your case, backed up by a list of your accomplishments.
The first step in plotting raise strategy is to determine your value in the job market.
Mary Lou Finn, human resources manager of Loop-based Ketchum Public Relations, suggests that here your manager can be an overlooked source. “Ask your manager if the company participates in local compensation surveys and if so, what is your salary range. This is information everyone is entitled to know,” Finn asserts. “Also ask what the average raises have been recently.”
Also, network with others in your profession or position to find out average salary ranges. Many people are uncomfortable with this option from lessons learned in childhood, said Ronald Krannich, author of “Get A Raise in 7 Days: 10 Salary Savvy Steps to Success” (Impact Publications).
“You learn two things: never talk to strangers and don’t ask about money,” Krannich said. “So it’s very hard for people to ask strangers what they earn. You can do it by asking people what a salary range is for their positions. You’ll find they’re usually eager to help.”
The public library also will have reference books listing salaries for various occupations. The U.S. Bureau of Labor Statistics’ Occupational Outlook lists salaries and demand for many positions (www.bls.gov). And several Web sites, including salary.com and jobsmart.org, list compensation data.
One caveat, though: Many sites get their information from a small pool of individuals. If everyone who responded to their surveys had 10 years’ experience and was based in New York, the newer hire in Chicago may not get a true picture of his or her value, Belmonte said.
Once you’ve determined a salary range and where your pay falls on that scale, you again should take into account your company’s specific financial situation and general industry or economic conditions.
Next, assess your performance.
“You need to speak the language of today’s employer,” Krannich said. “You have to talk to the employer about the bottom line. There are two approaches: point out how you’re helping the company make more money or helping save money.”
Be specific about what you’ve accomplished and how the company benefited, Krannich said.
Belmonte concurs: “Companies are more focused on performance based pay. Take a critical look at your performance for the past year. Determine whether there’s a match between what you’ve been hearing about your performance and what you get in salary.”
Write those attributes and accomplishments down, and rehearse saying them in front of a mirror. Remember to bring your talking points with you to your meeting with your manager, Krannich said.
The next step is to decide how much to ask for. However, don’t use inflation as a determining factor. “Never assume the cost of living increase drives salaries,” said Finn. “Most companies have salary plans in place with ranges for pay raises.”
Now that you’ve done your homework, it’s time to make your case. Attitude is important, said Finn–or maybe that’s lack of attitude. “Never assume you’re entitled to a raise,” she said.
When you meet with your manager, don’t expect an immediate answer. “Give them time to process it,” Belmonte said. “Managers wear a lot of hats. One-hat managers often don’t have enough information on is human resources. They’re not going to be able to react in that conversation.”
If you don’t get the result you hoped for, discuss why with your manager. Ask if it’s possible to set three or four goals, Belmonte suggested. Revisit the issue at a mutually determined time in the future–say, six months or even next year’s performance review.
If the manager says the company just doesn’t have the money to increase your salary, you could try to ask for additional benefits, such as more vacation time or tuition reimbursement, said Krannich. But Finn warns that a company may not be able to afford those kind of benefits if times are tight. “If there’s an economic downturn, probably the last thing a manager will want to do is give more paid time off.”
However, if your raise was smaller than you hoped or if your manager is reluctant to give you a bigger raise because it’s not in the budget, you could ask for a lump-sum payment or variable compensation, Finn said.
Variable compensation, a performance-related award that must be re-earned each year and does not increase base salary, is a growing trend, according to a survey conducted by Hewitt. In 1990, 40 percent of organizations surveyed offered variable compensation. By 2000, it was 78 percent.
If your company is struggling, variable pay likely will vanish. There is one group of employees who have the best chance of getting what they ask for, said Belmonte: the “high-potential individuals.”
“These are individuals who work way beyond their jobs,” he said. “They’re very educated about what the business is all about. They understand how departments interact. They see the big picture. Once economic conditions improve these are the people the company will need.”
And while there has been a lot of talk about economic downturns and layoffs, the jobs market is not as bleak as it seems, Belmonte said. “In the skilled positions, demand will still be high. And more people will be leaving the job market (as Baby Boomers retire) than those entering it for the next few years,” he said.
If you really feel you are not being paid what you deserve, start looking for a new job. Often a change in employers will bring a 10 to 15 percent pay increase, Belmonte said.
Just look quietly.
