How and when to ask for a raise
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The brouhaha in the past week about software company Microsoft chief executive officer Satya Nadella’s advice to female professionals on how (not) to ask for a raise, reminded me of a candidate’s botched attempt at securing a pay hike earlier this year. She marched into her supervisor’s office unannounced, declared that she wanted a raise and threatened to quit otherwise. Reasons: She hadn’t had a raise in 18 months, she had interest payments to make on her new car, her colleague was getting paid more than her and she had another offer. The meeting ended in an altercation with her irritated supervisor, and not surprisingly, she didn’t get the raise. She had little choice but to follow through on her threat to quit, and ended up in a new job that she didn’t particularly want.
So, should one ask for a raise at all? Yes—if you believe it’s justified. It is a bit tricky, so use this reckoner to navigate the process.
Most structured organizations believe they are well-run meritocracies, hence the instituted evaluation and human resource (HR) systems take care of fair rewards. And in many cases, it does work, as Nadella was probably trying to point out. In reality, we know that “karma” can sometimes be a bit of b****. Systems are not always perfect. Companies may want to reward talent fairly, but lags occur—the economy is annoyingly capricious, the labour markets refuse to abide by HR evaluation cycles, and achievements are overlooked. Besides, there is the fear that the “Please sir, I want some more” syndrome can mark you out as greedy and self-centered.
Focus on value
Be clear as to why you, in particular, deserve a raise. Clocking in a year no longer automatically qualifies—that was way back in the prehistoric “before GFC (global financial crisis)” days. Nor, unfortunately, does merely meeting targets or performing to expectations. The case for a raise is determined by market forces—simply put, are you consistently delivering more value than you are being paid for? What is the demand-supply mismatch for your skill sets in the labour market? Add to this the company’s ability to pay at the current time (think investor pressure, current demand, turnarounds or start-ups).
Make a business case
If you are seeking a raise outside the regular evaluation cycle, make sure you can demonstrate that your performance has consistently exceeded expectations of your current role and compensation. Or that the market compensation for your specific skills has moved up considerably.
Determine if you really are underpaid, and by how much. Mark-to-market compensation; benchmark the scope of your role (job equivalence, in HR terms) and where you fall within that range. Is there an increased demand for your skills in the market? Who is hiring and at what price points? Consider also pricing the benefits that you may enjoy, which would not be on offer with a new employer—for example, the ability to work from home once a week.
Prepare your pitch in terms of outcomes, not just activity. What additional projects did you take on? Fill in for colleagues? Land that big client? Are you pitching for a raise or a promotion as well? Some people prefer to go into this discussion with a counter offer in hand. While this can occasionally prove to be an effective strategy, it does have some drawbacks. Put yourself in the company’s shoes and think through likely responses to all of the above.
Understand the system
Research how the company compensation policy works. Are there stated compensation philosophies, for example, how the company benchmarks itself to the market, preferred ratios of fixed pay to bonus, incentive formulae, increment cycles? Are there stated criteria for advancement? Is the company doing well? Is there generally a defined amount set aside for raises? Who else apart from your boss would need to be a part of the process?
When to ask
While it’s generally not a wise idea to initiate this discussion during a budget cut or recession, there are some strategies around when to start this conversation. If a formal review is imminent, start seeding your conversation well in advance. Make sure your superlative performance is visible to all decision makers and influencers on an ongoing basis. Request periodic reviews or proactively provide written updates and, obviously, don’t forget to acknowledge your manager’s role in your successes. It may be good timing to kick off the process when you have just completed a significant project, or if the company has just had a big win in the marketplace.
Keep an open mind. Don’t automatically assume that your performance is not appreciated. It may be that your manager is synced to the formal appraisal cycle, or that the business environment has not been good, or he has just been too busy with business to deal with this.
The how component
u Don’t ambush your supervisor, schedule a conversation.
u Don’t start with an apology (for example, I know that this is a bad time, but …). Present your case, politely and firmly.
u Even if you are going in with another offer, keep the conversation mainly about what you bring to the table. Either way, believe in yourself, be prepared to pitch your case and be realistic about your expectations.
u Stick to what’s relevant—your work and enhanced value-add, over and above the defined role that you are getting paid for already. While you may choose to share extenuating personal circumstances, be aware that eventually it’s what you bring to the table at work that counts.
u This is your sales pitch—maintain positive body language, don’t beg, whine, threaten or make it personal. Or sulk, or close the door, if the conversation doesn’t immediately go your way. It’s a negotiation and it’s likely to take time. Be prepared to listen to feedback.
If not, then what?
Sometimes the answer is no, or not now. If so, take a deep breath; ask about what more you could do to qualify for a raise. Consider the feedback, defend it if need be without getting defensive or aggressive. Offer to work on additional projects to demonstrate your commitment and make yourself more valuable. Even if you do decide to walk away, there is no point in burning bridges, conduct yourself with dignity. If a raise is not forthcoming right away, but your performance is valued, consider if you can negotiate other trade-offs—extra vacation time or a promotion, or a specific one-time bonus.
If so, then the next steps
If your request is being considered, be cognizant of the fact that a one-off raise for one person has repercussions on the rest of the organization, and that it requires your supervisor to stick his/her neck out and initiate an often cumbersome HR process. Allow for time, ask about the process—it usually involves other managers as well. If you are asked about a desired number, you may want to present the market data and leave it at that. If you do have another offer, you may want to state the ballpark and clearly voice your preference to stay, should the numbers stack up, or come close.
Politically incorrect as it may sound, perhaps Nadella’s philosophy of karma wasn’t that far off the mark—the sum of your actions does indeed play a role in your future. The issue of gender aside, perhaps the appropriate nuance in this case is in the karm (work), rather than fate.
Sonal Agrawal is managing partner, Accord India, an executive search firm.