How to ask for more

You have done well at work. You have helped the company make a profit. Now you feel you deserve a pay rise. How can you communicate this to your boss? Daniel Ough, a careers expert, offers some tips. Illustration by Ramachandra Babu

A colleague of mine worked for a company for eight years at the same salary and never received a bonus.

Dick was excellent at his job and was given many commendations and awards for his work.

It seemed incredible that the company never increased his salary. Some might argue that the company had a moral obligation to give him a salary increase.

But from a business standpoint, since they were able to retain him as an employee without increasing his salary, why bother?

I worked for five years in the same company with the same boss Dick had, received a salary increase every year, and for two years was awarded a performance bonus. What could account for the significant difference between Dick's experience and mine?

I had learnt the fundamentals of negotiating an increase and Dick hadn't. Armed with this knowledge, I felt confident in approaching our boss about a salary increase and a bonus.

Without negotiation skills, despite his success in his job, Dick actually believed that if he raised the question with our boss, he might lose his job.

Many people, however successful they are in their job, find it awkward to talk about money, particularly to negotiate a pay rise.

What are some of the reasons behind this?
Lack of negotiation skills and fear are two of the biggest reasons. Let's use Dick as an example we can learn from.

Dick finally left the company we worked for and went looking for another job. By this time he had a wife and two children to support and was feeling a bit desperate.

He was approaching the issue of salary based on what his family needed, while potential employers were looking at the issue from the standpoint of his worth to the company.

He had many interviews but became angry and disillusioned when companies were not willing to pay him what he was asking.

Dick was out of work for eight long months before he finally conceded that his salary demand was out of line with what an employer would be willing to pay him.

What are the fundamentals to successfully negotiating a salary increase?
First, it is important to understand that generally employees are paid according to their worth, not according to their needs. Too often people try to negotiate based on need.

Let's take an example of someone whose wife gave up her job to have their first baby. This employee tried to negotiate a pay increase on the basis that he needed more money to make up for the deficit in the family budget due to the loss of his wife's income.

He was not successful because he failed to link his case for an increase to his performance and his worth to the company.

Second, before you even contemplate asking for a salary increase, ask yourself whether the company is doing sufficiently well to consider an increase.

It is foolhardy to ask for an increase when a company is clearly doing very badly and may even be considering downsizing. Your approach could trigger a decision by the company to make you redundant!

Third, are you a sufficient asset to the company that it would want to retain you and, if it does, is it prepared to consider an increase so as not to lose you (possibly to a competitor)?

In order to answer this question, put yourself in the place of your boss and ask, "Would I give myself a pay rise and if so, on what basis?"

If you can clearly see, for example, that you have brought in a substantial amount of business in the previous year, or through your direct actions you have saved the company a considerable amount of money, then this is a sound basis to start from.

Finally, it is important to be aware of the local job market. Is there a glut of people with your experience or a scarcity?

If the former is the case, then the company is not really worried about whether you will leave as it will find it relatively easy to replace you.

If, however, there is a scarcity, you will be in a very strong position to negotiate an increase, because it might find it difficult and time-consuming to replace someone with your skills, experience, and knowledge of the company.

This is what many people refer to as "market forces". Your worth to the company may be driven by the need to have a person with your experience in order to carry on the business.

How do you deal with feelings of fear?
Many people feel fearful when it comes to asking for a pay rise. Some fear that if they ask for a salary that is too high, they will be subjected to ridicule ("You must be joking!").

Others, not knowing how much to ask for, fear they may ask for too little and leave money "on the table" that they could be taking home.

Some may fear that their employer will decide it is easier just to let them go. Knowing what is behind your feelings of fear will help you overcome them and negotiate your increase with confidence.

Begin your preparations by reviewing your performance in your job, making notes about areas where your work has been commended.

Are there examples you can point to that show you are a valued employee because you have brought in money, saved the company money, or made a significant contribution to an important company project?

Take time to research what companies in the current market would be expected to pay a person with your skills and experience. You can get a good idea of the "norm" by following the classified advertisements in the newspapers and by checking recruitment company websites.

Salaries are usually driven by market forces which will impact whether a company is willing to pay more than what is the norm.

Once you have done your research, settle on a figure that you think is realistic, but be prepared to negotiate a lower figure.

If you ask for X but your boss says the company would only be prepared to pay the lower figure of Y, you could respond, "Could we split the difference?"

The best time to negotiate a salary increase
Many people will advise you to "butter up" your boss before you pop the question about a pay increase. I think this advice is not helpful as it focuses your mind on the mood of your boss, not on the facts you need to substantiate a pay increase or bonus.

My advice is to be upfront with him and ask him for an appointment to discuss your career. It is better to deal with this in a professional way rather than waiting, poised in the wings, to catch him unawares at the so-called "right moment".

Having said that, like any business negotiation, it is important to pick an opportune moment to broach the subject. For example, if your boss is under pressure and working long hours in order to be able to go away on a family holiday, the last thing you want to do is try to squeeze in your request at this pressurised
time.

Many companies have an annual appraisal system where your boss is required to set aside time to discuss your performance.

This is a natural time to ask for a review of your salary and even raise the subject of a performance bonus if your appraisal shows that you have done particularly well. This will not catch your boss by surprise as this is the normal way to review your worth.

The golden rule of negotiating a salary increase
There is one Golden Rule that you must not break in any salary negotiation.

You must never threaten to leave if your salary request is rejected. While you might ultimately choose to leave if you find a position with a company that is willing to pay you more, using threats
is very foolish, unprofessional and could backfire.

I once lost a very good team member because, contrary to my advice, he threatened the owner of the company that if he didn't give him a pay rise he would resign. He thought this would produce the right result. It didn't.

His resignation was accepted and he was out of work for several months. Bosses do not respond to threats, but good bosses will listen to a reasoned argument as to why you should receive an increase in salary or a performance bonus.

Any request should be made in a non-threatening way, perhaps asking whether consideration could be given and then listing specific reasons why you feel you are entitled to an increase.

There is a recent example in Dubai of an exception to the general rule that you should not negotiate on need, only on worth.

In the last 18 months, rent increases in Dubai have been so dramatic that many companies have responded to employees' requests to increase salaries in order to ease the pressure on the employees' families.

While this was a thoughtful gesture and was related to the employees' needs, it was also driven by market forces.

Employers realised that their competitors were considering increased salaries to address the rent increases and they did not want to lose valued employees. In this case, the value of the employees prompted the employers to respond to their needs.

Most salary negotiations fail because employees don't understand the need to thoroughly prepare their case for a salary increase in a clear, concise and logical manner, based on their worth to the company. Keep emotion out of it; deal with facts.

Good luck!