Asking for a pay rise can be a daunting task and if handled the wrong way, you might face a sour response from management.
Two expert negotiators have shared their key tips to find out if you deserve a pay rise and how to pitch your case
Check your contract for clauses
“Systematically go through your contract and look at the clauses about salary rises and power to negotiate,” Dr Pushpa Wood, Director of the Westpac Massey Fin-Ed Centre says.
“If there was no discussion about salary review when you took the job, try to find out where you sit on the pay scale and what your basis is for the rise. Is it because you’ve been there for five years or have you overachieved beyond the job description?
“Pay rises aren’t just about money, progression should be attached to it. Ask yourself whether you think your manager can see that you have progressed in your role,” she said.
Build a case for justification
“You need justification to put forward your pitch,” Dr Wood says.
“When you’re negotiating your contract in a new job, see if you can add a performance-based payment scheme. This will motivate you to achieve more and it will be recognized and rewarded.
“If you don’t have a performance-based scheme in place, build a case around the facts and data that show what you have achieved over and above your job description.
“Compare the data and unveil how over 12 months this is what you have achieved. You could have exceeded achievement or alternatively reduced the wastage within the company.
“Perhaps you have influenced the reduction of absenteeism by 20%. Perhaps you have saved the company money, or increased their revenue or customer base.
“Prove that your achievement is a result of A, B and C, so that is why you believe it’s time that your work is recognized and rewarded,” she said.
Don’t limit yourself to money
“The reward could be a pay rise or come in the form of extra leave, medical insurance or life insurance. Money isn’t the only option for a reward, don’t just limit your horizon with money,” Dr Wood said.
Professional Teaching Fellow and lecturer at University of Auckland Business School, Andrew Patterson, also says that a pay increase conversation shouldn’t simply be about money.
“Packaging a pay rise pitch as one part of an overall employment package is likely to be more useful. For example perhaps you really want an increased level of responsibility and perhaps some degree of budgetary authority to develop new projects.
“It would therefore follow that someone acting in a role with increased responsibility and authority would be paid accordingly,” he said.
Be assertive and factual, not aggressive and emotional
“Separate money and emotions and don’t bring any tears into the meeting,” Dr Wood says.
“Put yourself in your manager’s shoes – you don’t want to make them feel uncomfortable because it has become an emotional plea rather than a professional discussion.
“Some people are also emotionally attached to their qualification, for example somebody with a PhD feels that they deserve to earn more money than a colleague with a master’s degree, but remember that you are being paid for your job description, not your qualification.
“It is important to be assertive with your fact-base salary-rise pitch, but not aggressive. Men are usually more assertive than women and a lot of them overestimate their expertise, whereas women tend to underestimate themselves.
“Women need to remember to be assertive and have the evidence that backs up the reason why they deserve that progression. You don’t want to create a self-fulfilling prophecy by underestimating yourself,” she said.
Patterson also says that the employee should focus on achievements and potential, rather than personality and likeability.
“If you feel uncomfortable ‘negotiating’ then perhaps conceptualise negotiation as a targeted conversation,” he said.
Know the market rate for your position
Employees should research salary brackets for their role in their industry to get an idea of where they are on the scale, the experts advised. Websites such as Glassdoor can give insight into salary scales or you can look at other similar roles and see what they’re offering.
“The key thing is to do a reality check to see where you are in comparison to others at your level,” Dr Wood said.
Patterson says: “You need to have a clear and genuine understanding of your own target point, walkaway point, alternatives to a deal and initial offers.
“If you’re in a situation where you are seeking and may have received another offer of employment on better perceived terms, then you may use this alternative deal as a basis to determine your walkaway point.
“I wouldn’t suggest mentioning this abruptly to your manager though, remember that NZ is a small place and the world is getting smaller. But mindful of your reputation and networks,” he said.
Go in with a round figure and know what you’ll settle for
“Around 90% of the time you won’t get the figure that you pitch for, so know what the lowest number you’re happy to accept is,” Dr Wood said.
“You could say for example, ‘I believe, having looked at my last 12 month performance and achievements above what I was employed to do, I think $5,000 more is reasonable’.
“If you’re not happy with their counter-offer, you could say this wasn’t what you were expecting and had a higher expectation.
“You could ask for a few days to think about it, as this gives a signal for them to make a second counter-off, but be careful. Think about how badly you need the job because you also risk losing it within the bargaining point.
“Go for a round figure unless you’re on a pay scale and each pay scale is for example $1,200 - then follow the pay scale. They also might offer you a one off bonus payment instead of adding it to your base salary, so think about whether you would be happy with a one off payment or need the base salary increase,” she said.
If the answer is no…
“Ask if you can revisit this again in six or 12 months’ time. Or if it’s not possible full stop, you can ask what this means in terms of your future progress in the company,” Dr Wood said.
“This would give your employer the impression that you’re looking at your future path and progression,” she said.
Patterson says: “Negotiators who have higher aspirations tend to objectively achieve more. If you set high aspirations and don’t quite achieve them you may be dissatisfied, but you’re still more likely to achieve more than if you had low aspirations.”