How to Negotiate a Raise

Asking a boss for a raise can be stressful. It need not be. If you are doing a good job and if your boss has just given you a good performance review then you both know that you are a valued, contributing employee. The focus on the amount of your raise should now be that of two allies trying to sort out how to merge the company's needs and your expectations.

Properly managed, negotiating a raise can be a good, healthy discussion. If you want to learn how to negotiate a raise consider these ideas of what you can do to maximize your potential.


Identify The Restrictions
You know the company is looking to minimize its labor costs. They usually have two issues. One is the human resource pay range for the position you are filling. The other is how your raise will impact those with whom you work. That is, if you get a large raise will others expect or demand commensurate increases. Finally, your immediate boss may be concerned that giving yoou too much will impair his raise or refelct on his or her job performance. These are the issues you want to address in the discussion.

Put Conflict Aside
Conflict occurs when two or more people are in competition. Discussions about a raise typically follow a good performance review. You have established your talent and capacity. The company is happy with your performance. At this point both parties have agreed on the ultimate outcome provided the salary negotiations can be resolved. Both parties now want the same thing; to keep you happy and productive!

Support the Other Person by Establishing Your Value
Instead of an antagonistic environment you want to find ways to help your boss justify the raise you want. Work with him or her to identify what pressures he or she might be facing. By understanding these issues you can better develop arguments that provide ammunition to use when your bass makes the case for your raise; and he will have to do this.

If the company loses you to another firm it will cost the company time and money. It may also cost them talent.

  • If you are doing things above and beyond your job description, make a case for additional compensation. As one stays with a company it is typical that they are asked to take on more and more responsibility. In some cases your boss may not even realize how much your role has been expanded. It is up to you to identify your contribution to the company.
  • If you have aspirations for advancement now may be the time to seek that next higher job to increase your earning potential. Your advancing can make your boss look good to his boss as a person who picks good people and develops them.
  • Offer to take on more responsibility as a bridge to a promottion and justification for a larger raise now. Identify what you can do beyond your current job that will save the company money or resources. Demonstrate that you are a team player. Reinforce how you are looking for a future with the company.
These are just a few ways to enhance your value to the company. Each company is different. So is each employee. Take some time as assess who you are, what you can do for the company. Then advance a strong, positive argument justifying your salary expectations.

If you feel you are in a really strong position or if your talents are hard to replicate you can always go to the dark side and suggest that you may need to look elsewhere if the company can justify keeping you. Always phrase this as "keeping you" rather than "affording you" or "paying you enough". You are trying to place the blame on the company's inability to remain competitive for someone with your talents and keep the focus off the mercenary aspect of the discussion.

  • If you have been with the company they really do have a significant investment in you. If you are prepared to seek work elsewhere, raising the cost of their having to replace you has merit.
  • If, on the otherhand, you are concerned about replacing your income elsewhere then don't try to bluff on this point. Your bluff might get called!

Be Creative When Discussing a Raise
Base salary is important but it is only one portion of a compensation package. Brainstorm with your boss about other benefits such as medical coverage, dental coverage, 401k matching contributions, stock option, a company car, and / or a company mobile phone which you might consider extra compensation and which the company does not have to consider "salary". Extra benefits add real value to you and also become leverage when you go to another company. At that time you can indicate the total package you are getting and require it be improved upon to get your attention.

What Do You Want?
You will spend at least 30% of your waking hours at work. Assess if your current job is fulfilling, rewarding and what you want to do. Even if the money is right it may be time to go in a different direction. It is your career and each step should be carefully planned and executed.