Asking for a Pay Raise – Ten Steps to a Salary Increase Next Year

Asking for a pay raise isn’t easy; in fact it can be counter-productive to ask for a salary increase if you haven’t done your prep work first.  Make sure you read the tips below to help you prepare for your annual performance review. Asking your boss for more money isn’t something you’ll do that often, so you don’t want to blow your precious opportunity to make your case when you finally decide to make your move.

Of course, in most businesses, our salaries are tied to the success of the company so a down year or a horrible quarter can offset a lot of the prep work that we’ll cover below.  Some years you’re simply glad to have a job at all; but you should still follow the ten steps below so that when the economy or your employer turns around you’re poised for a pay raise.

1. Do salary research: Try and look at your job as an outsider and then do some research to determine your value – both inside and outside the company. Be realistic. Internet job websites may not be the definitive source of salary information, but can be a good start. If you don’t think it would damage your case in any way, talk to someone in your company’s human resources department and see if you can get corporate pay scales for jobs that are similar to yours inside or outside the company. And within ethical boundaries, see if you can learn precisely what other team members in similar jobs to yours might be getting so you have a valid reference point for asking for the number you’ve targeted.

2. Ask for what you deserve, not what you want: Most of us would like raises and perks that would help us better afford the expenses in our lives, but saying you want a raise just because you want a nicer car or house isn’t going to get you anywhere. Employers need to see your request in terms of its value to them. Here are some tips on how to get promoted.

3. Document your contributions: If you have reached any particular work or sales targets that can be quantified, document them and use them as a basis for justifying your request.  Show how you’ve been proactive taking on new projects and assignments, acquired new skills, furthered your education or training, and added new certifications or degrees. Demonstrate how you add value to your team and your employer as a whole. 

4.  Plan and rehearse: You plan ahead for meetings where you’re the featured speaker, right? Once you have the information, plan a pitch for the raise that states all your arguments clearly, swiftly and with an understanding of what appeals to your supervisor. Above all, schedule an appointment so you have a solid block of uninterrupted time in which to make your case. 

5. Demonstrate commitment to department and organization. Show how you have taken on new projects and assignments, acquired new skills, furthered your education or training, and added new certifications or degrees. Demonstrate how you add value to the department and the organization.

6. No ultimatums. Nothing shuts down a meeting about money faster than an ultimatum. It makes it easier for the boss to say no, and if you don’t have a Plan B, then it’s going to get awfully quiet. Always be prepared with a counteroffer if you can’t get the dollar target – see if you can negotiate different hours, more vacation, education benefits or better projects. The idea is not to get mad – it’s to get something from them of real value to you. What that final compromise is will tell you whether it’s worth staying with this organization or whether it’s time to plan for a departure.

7. Be realistic about the economy: Most people can tell whether their organizations are legitimately struggling with the economy or other competitive factors. As long as your organization is treating people fairly across the board in light of poor economic factors, it’s probably something you’re going to have to accept. Also, remember that the way you handle this request might actually position you for a raise – or a better one – when conditions improve.

8. Identify Alternatives:  If your boss can’t or won’t pay you more money, there may be other things you can negotiate to help your bottom line other than increasing your income.  Explore the possibility of working from home, saving yourself commuting costs.  Perhaps you could work 4, ten hour days.  This could save on a day of day care costs each week or give you the chance to do some freelance work and earn some extra money on the side.  Remember to consider all the aspects of workplace finances such as company health insurance and other benefits.

9. Document the meeting: No matter how things turn out, write up your version of events as soon as possible after you meet and share that information with your supervisor. Even if the meeting was disappointing, keep emotion out of the document and stick to the facts. Keep the document handy so you can present it the next time you make a salary pitch.

10. Revisit your career plan: Whether you get what you want or you don’t, do a post-mortem on this experience and think about whether you want to stick with this job or consider new opportunities. You can usually earn more money and enjoy your work more if you have a work portfolio to guide you.

Remember, although in your mind a pay raise is all about you, from the perspective of your boss it’s all about their department budget and how paying you more money will help the company make more money.  Approach it with that perspective in mind and you’re more likely to win over your boss and get a raise.

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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