How to Make the Case for a Pay Increase

CNN Money gives some thoughts on how to make the case for a pay increase as follows:

Before the recession, for several years running, the average annual merit raise for salaried employees was about 3.5%, with emphasis on the word "average." These days, you have to "exceed expectations" to get that, Towers Watson reports. Last year, just 25% of employees at the companies surveyed met that standard.

"Companies now have raised the bar. The days when you could count on a merit raise, even for putting in lots of extra energy and effort, are gone," says Ford R. Myers, founder and president of executive coaching firm Career Potential.

Myers adds, even more ominously: "The phrase 'far exceeds expectations' is really a big loophole, with some employers. It's often not based on any objective performance criteria. The 'expectations' are not clearly defined. So, even though the category exists on paper, managers know not to put anyone in it."

"You have to be your own best advocate, and build a persuasive case for why you are worth more," he says. A big mistake he often sees people make is "assuming that higher-ups already know what you've contributed. Wrong! Your bosses may have a vague idea, but their attention is usually on so many things at once, it's up to you to be your own marketing department and spell it out for them."

"You need to point to measurable results," says Myers. "Make a list of very specific items, like 'Sought 10 new customer accounts, landed 12' or 'Increased production line efficiency 22%.' Think back carefully and include anything you've done that has boosted revenues or profits, cut costs, or enhanced productivity.

"Once a week, or even every day, make an appointment with yourself to sit down and update your list," Myers advises. "Every 30 days, send it to your boss, without necessarily expecting an immediate response."

Lots of thoughts on these:

• Is this new news? Did anyone ever get 3.5% raises simply for hanging around? Ok, I guess they did (in the old "glory" days.) But as the piece says, those days are long gone now.
• That said, you have ALWAYS needed to deliver results/show accomplishments/whatever you want to call it to make more than the average Joe. I've discussed this in several posts like How to Get a Raise or Promotion and How to Demonstrate that You Deserve a Raise. 
• What are "results"? Depends on what your company needs. But in most cases they are things like growing revenues, decreasing costs, etc.
• For those who do not work directly in areas where revenues or costs are concerned, you need to look at what accomplishments are getting others in your area promoted/paid more, and copy what they do.
• If you settle for "average" rates of pay increases, you are limiting yourself big-time and you're potentially giving away millions of dollars.  
• I "promote my work" by doing a weekly update via email to my boss. I  keep a copy of each of these emails as well, then when review time comes along, I review them and select out the most important accomplishments for discussion. You'd be surprised at how many things you'll forget if you do not have a system like this. This past year I saw some of the accomplishments in my file and they were almost complete "surprises" to me -- I had forgotten all about them.

In the end, it comes down to increasing your value to your employer. Those who are valuable, get jobs and get paid. Those that increase their value, get better jobs (promotions!) and get paid more (pay increases!) So stop expecting (or even wanting) a measly 3.5% and begin working on your plan to get a 5%, 7%, or higher pay increase next time your review comes around (and for that's too long to wait, deliver now and ask for a raise now.) ;-)

Comments

[Sunil from The Extra Money Blog]

when i decided to leave a high paying position in M&A (where measurable results were easy) for a slower, easier (but stable) internal audit job, the challenge for everyone was always proving worth/value/measurables as part of a cost center. i am sure many professionals in such positions (i.e. risk management, regulatory compliance, internal audit, legal) face the same struggles on an ongoing basis.

[turbotax]

Avoid fear in getting rejection when asking for an increase , also be reasonable as well many times you can negotiate and could get a little something more per hour best of luck worked for me

[Jon]

I asked for a promotion for 2 years. With records of everything I had accomplished. I was always given the run around. I tried seeking out new positions within the company but got shut out because my "grade level wasn't high enough", even though I was qualified. So I switched companies, for a 15% raise. :)

[Ginger]

My fiance got a "raise" during the recession partly by picking the right employer. Make sure you are what employers need and negotiate when you are hired. Continue improving and bring in the money (or save money) for the company. My fiance is working on a grant (on his own time) that would pay his salary as well as give him an increase.