How to negotiate a pay rise

Your performance has rocketed; you’ve brought in a big deal, introduced some new clients and driven down operational costs. You deserve a pay rise and it’s time to negotiate. See our tips on how to approach that most important of conversations.

Your performance has rocketed; you’ve brought in a big deal, introduced some new clients and driven down operational costs. You deserve a pay rise and it’s time to negotiate. See our tips on how to approach that most important of conversations.
Even during a recession there is a glimmer of hope that a pay deal can be done. Whilst the news is mixed, deals can be achieved; on the one hand public sector pay agreements are being frozen  but on the other hand private sector businesses are reaping in the rewards. Staff at Marks and Spencer, for example recently shared in an £80 million bonus pot. So how can you make sure you are on the receiving end of good news?
The first thing to note is that there is no standard way of asking for a pay rise. There’s no training attached or process to follow. This can lead to difficulties because many people handle it poorly and wind up losing face and failing to achieve their objective of earning more money.
So the first thing to do is to prepare.
The importance of knowing your value and the relative pay scales for your grade within the industry is key. There are plenty of salary checkers on the internet to consult. Try and remember to consider your location as well. Jobs in the capital still command a premium. It is also worth researching jobs boards such as which give a great indication of what the current starter salary is for your job within your industry. Remember to take into account the economic outlook. In the recession, employers will point to job cuts and pay freezes but if comparable jobs are being recruited in at a higher starting salary than you are currently on, you may have a case for a pay rise.
Know what the rate of inflation is. A report just out from the Confederation of British Industry shows that just 3% of bosses said they were planning on rewarding their workers with a pay rise higher than the rate of inflation. This is despite the retail prices index measure of inflation soaring to 5.3%, its highest since 1991. This means that everyday costs such as petrol are rising whilst pay is lagging.
Demonstrate your value:
Once you’ve compared your salary levels across your industry and within your business and checked the rate of inflation, you need to put together an impressive pitch on why the company should reward your performance.
List your individual achievements and detail everything. It may be helpful to consult past appraisal documentation. Quantify your performance to demonstrate how you have helped to drive up profits etc or improved customer satisfaction. Having this information at your finger tips will also help to boost your confidence.
Another way to argue successfully why you should have a pay rise is to ask for extra work and responsibility and link this to a reason as to why you deserve better pay. Business advisers say that if you can’t argue the case that this should happen today at least try to negotiate a point in the future when the matter should be negotiated for example, six months into the new job role.
Another positive approach is to ask for a performance related bonus or pay increase subject to achieving more, based on standards or output greater than current or expected levels, says the website. This again should be received positively by the employer because you’re offering something in return, and not simply asking for more money, which most people tend to do.
Practice the pitch:
Once you’ve decided upon your strategy, the next thing to do is to practice your pitch. Liz Morris,the founder and director of Mayfield Associates, a gender equality research and consulting group, says that asking for a pay rise is like making any pitch.
“It is about understanding what motivates the person who will make the decision and the benefits to them of paying you more,,” she says.  Employees shouldn’t be put off by market conditions but should be aware of them – Liz advises staff not to pin their boss up against the wall! “In times of recession and as unemployment rises it can feel that the balance of power in the employer/employee relationship is firmly with the employer,’ she acknowledges.  ‘’However, recent Chartered Institute of Personnel and Development research has shown that job satisfaction and motivation has plummeted across the board which means that when an opportunity arises to move, the likelihood is that good people, with experience and knowledge will take it. Businesses know that turnover costs somewhere between 6k and 9k, and when you factor in the learning curve of a new employee, possible disruption to business and the impact of severed relationships it can be much more. However, this does not mean you can hold your employer to ransom.”
Liz also suggests that being honest can help, especially where bosses are unaware of how hard you are finding it to keep up with the cost of living.  “If you cannot live on what you are paid then it may be useful to share this,’’ she says. ‘’It may not be possible to pay you more, but there may be other things that your employer can do, such as keeping your pay the same and enabling you to cut childcare costs by working different or fewer hours.”
Remember to include the last time you had a pay rise. Your boss may simply not be aware that your pay was last reviewed five years ago for example.
Liz says  women are generally less likely to ask for a rise than men. She said: “It is also true that men and women doing equal work are often likely to have different views of their own ability and worth, with men often seeing their contribution as of higher value. It is also true that some managers (even women) implicitly see the work of men as more valuable than women, even when they do the same job. So it is incredibly important to prepare well and build up one’s confidence before asking,” says Liz. Practising that pitch becomes even more important when you are building your case and attempting to bolster your levels of confidence.
Once you’ve fine-tuned your pitch it is time to set up the meeting.
Schedule a meeting & negotiate:
Picking the right moment is paramount to the success of your pitch. Choosing a time when the boss has just received some bad news on profit levels or customer feedback is not the time to storm in demanding a pay rise.
When the time is right, sell the meeting as a time to review objectives, performances and achievements rather then simply as a forum for airing your frustrations at the pay grade.
Request a face to face meeting and enter the meeting with a positive frame of mind. Negativity and complaint will do little for your reputation or your case. Also accept that your boss may not be the one who can make the final decision so check what the process is and the layers of management that your boss needs to go through. Clarify timescales with them if this is the case.
Be prepared to negotiate, present your pitch and remember to include all the research you have undertaken.
Confront a ‘no’:
If the response is a plain and simple ‘no’ you must accept this. If you face a ‘no’ because the company is struggling and can’t afford it but does value you then consider negotiating some non-financial benefits including some more paid leave, a subsidised gym membership etc.
If you have been turned down because the management doesn’t believe you have attained a level where a pay rise is  justifiable,  agree what steps you need to take to get there next time. You may also have to negotiate your way to some training and development to get you there.

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