Asking for a pay rise is nerve-racking at the best of times, but with cash in short supply, it’s more important than ever to pick the right time and be prepared. Sue Weekes finds out how to put forward a convincing case for that hard-earned increase
Some managers have approached asking for a pay rise in the current economic climate with the same trepidation as Oliver Twist asking for another portion of gruel.
Mindful of the financial challenges facing our organisations and fraught with concerns over job security, many of us have accepted that we simply have to go without when it comes to the once customary annual boost to our pay packets.
According to the Chartered Institute of Personnel & Development’s (CIPD) most recent Employee Attitudes to Pay report, the proportion of people enjoying a pay rise has steadily declined since 2008, even though the percentage increased from 45% to 48% in 2012. Of those who didn’t secure one in 2012, 22% reported they’d had no rise since 2008 and, of those who did, only 26% got one that matched or bettered the cost of living.
Some reward experts claim that the positive impact of a pay rise on an employee’s motivation, performance and general desire to do their job well is over-stated.
According to Amit Kramer, a labour and employment relations professor at the University of Illinois who co-wrote a study of the impact of pay levels, a pay rise has only a moderate effect on pay satisfaction. “Individuals are likely to regress to their initial pay satisfaction level over time,” he says.
No expert could deny, though, that the absence of any monetary reward year after year is likely to have a negative impact on an employee’s morale as well as put them under genuine financial pressure. Managers who have hit their targets, worked long hours and generally gone the extra mile for the company, therefore, shouldn’t feel guilty about asking for a pay rise and indeed may have more bargaining power than they think.
“Talent will always move, even in the deepest darkest recession, as they are the people who can drag a company out of a downturn,” says Stuart Hyland, UK head of reward consulting at the Hay Group, a management consultancy. “I firmly believe that just about any employee, if they choose to leave a company, could get a pay rise.”
To give yourself the best possible chance of securing a pay rise, the starting point is, of course, to prepare your case thoroughly. Hyland says that many individuals, and ironically especially high-performing ones, often underestimate their true worth. Carry out an assessment of your performance over the past year and work out how you can best quantify your contribution to the company.
Alongside this, list what you perceive to be your unique selling points and once again try to relate these to where they have positively affected the organisation or your team’s performance. “Working hard and getting that work noticed are two different matters,” says Ely. “Use examples of how you have demonstrated dedication to both the organisation and clients.”
On the market
Having looked inwardly at your own performance, next look outwardly and assess your market value. There is more pay and reward data in the public domain than ever before, so conduct your own mini salary survey.
Check out industry, professional and trade union sites, the relevant trade press as well as the job sites. Specialist job boards are usually better on sector-specific information than the generalist ones. Gather as much data as you can and make sure you know its source and origins to demonstrate credibility.
“Many employees will show up to a pay rise meeting with job advertisements or anecdotes, but if you have a density of data it will form a more compelling argument,” says Mark Childs, managing director at Total Reward Group, a rewards specialist. While it will be difficult for your boss to argue with a body of data, be aware that it might make them feel less informed and therefore on the back foot, so be circumspect in how you present it.
The 2011 Reward Risks survey by CIPD revealed that hard-pressed line managers often aren’t equipped with the information or skills to use reward as a tool to increase engagement and improve performance, and your boss might be uncomfortable in a discussion over pay and performance.
Bear in mind that if they feel too threatened, they may just remove themselves from the decision-making process. “If managers feel that an employee is coming on too strong when they present their data and research, they may simply pass it on to HR,” says Hyland.
With all of this in mind, give your boss plenty of notice for the meeting and make sure they know what you want to talk about. Also ensure that they can see your request is realistic and you are being entirely reasonable. Put some key points down on paper to leave with them after the meeting so they have time to digest and reflect on what you’ve said.
Time it right
Timing is everything, and while day of the week, or even time of day, can be a factor in increasing your chances of success (not Monday morning or late on a Friday), it is more important to look at the bigger picture when it comes to picking your moment.
Childs believes that there are windows of opportunity that show up in organisational life when an individual’s bargaining power is higher. “One of the most common is when someone else – and it could be your boss – leaves and suddenly the employer thinks ‘what if this person leaves as well?’” he says. “That is the moment to play on the anxieties of the employer and the more specialist your field, the better.”
Childs lists other classic opportunistic moments as when an organisation goes through some sort of shock or profits warning, or when it looks like it might be taken over and wants to lock people in (although the latter tends to be managed more through retention bonuses). “Those are the moments when the organisation is feeling vulnerable and often you are better waiting to request your rise until one of them comes along,” he says.
How good a negotiator you are can have an impact on your chances of success but powers of negotiation aren’t the be-all and end-all – building a solid case and picking the right moment are as important. Avoid being overly aggressive and find out what the company policy is regarding pay increases so you understand where your manager is coming from.
“Good negotiation is all about knowing the boundaries, not putting your manager on the hook to beg for mercy,” says Hyland. “For instance, does the manager really have any room to move in the first place?”
The mindset you have when you enter the discussion can have a huge impact on the outcome of the meeting. Executive and career coach Elizabeth Juffs says you need a healthy level of self confidence and self belief to ask for a rise and your mental preparation should focus on setting yourself up for the best chance of success.
“How can you think yourself big? This isn’t being ego-centric but we frequently think ourselves small and do too much ‘worst scenario’ thinking, such as assuming your boss will say no as soon as you open your mouth,” she says. “We tend to be really poor at building positive pictures. Think about it objectively: there’s probably at least a 50% chance it will go well.”
Juffs recommends using visualisation techniques to create positive pictures in your mind. “I’d want to create an image of walking confidently into the room, smiling, being calm and greeting my boss in a relaxed way,” she says. “Be assertive and clear about what you want and know in your mind what you are prepared to compromise on.”
While the focus of a pay rise is usually cash, Juffs advises considering what alternatives you might be prepared to accept such as training and development, more holiday, flexible working arrangements or flexible benefits. “It might not be the exact outcome you originally wanted but it can still be a positive one.”
Pay is an emotive subject and always will be. Professor Kramer’s study revealed that even highly compensated employees report high work-family conflict because those at home can also “perceive pay inequity” among colleagues. “I think most people would agree that a certain level of pay that allows you to meet your needs is critical,” he says. “However, beyond that level, relative pay becomes an issue and with it, perception of pay or pay satisfaction.”
Indeed, we would all like more money, but those requesting a rise should also examine other possible drivers of discontentment at work. “A lot of people quote money as a reason for being unhappy because it is the easiest thing to say, but when you probe it is often something else that is broken,” says Hyland.
Childs agrees: “In such cases you can put a plaster on the wound but it probably needs stitches. An individual may feel good for a while after a pay rise but the real problem will soon re-surface again.”
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