How do I argue for a raise from my employer?

[Jbone]

Bit of food for thought.. Here was my past experience several years back:

When I got promoted the "CEO" promised me a pay raise. He spoke with me directly about this. After 9 months I still didn't receive a pay raise even though I heard nothing but good things from my boss and other district managers.

When I asked why I didn't get a pay raise my answer was "your current salary was what the new position already starts out at. The last pay raise you got you shouldn't have gotten, someone must really like you"

Kind of taken back I replied well the "CEO" promised me a pay raise after my training was over. I would assume it would be fair to get a raise with my new position and extra responsibilities.

"Sorry we are keeping you at your current pay rate at this time"

I asked again 3 months later and this time I spoke directly to my supervisor that hired me at the time. I basically told him it was bs and that im really discouraged that this is how I'm treated. A week later I got a $75/week pay raise which was unheard of at the time.


I ended up doing close to the same thing a year ago when I found out through the grape vine that new hires with no experience were making MORE than me even though I was with the company for 8 years. 2 weeks later I got a $50/week pay raise.


Sometimes you just got to take a chance and call them out on it. In my case I obviously was under paid. I rolled with it for awhile until I figured I'd call them out. Companies always consider the bottom line over making sure their best employees are compensated fairly. It's sad but it's true.

I might even have to shake them down again shortly. Employee turnover is high. And word out on the street is they are paying new hires with little to no experience the same as some seasoned employees. They are so desperate for new managers they are willing to cough up the money for the new hires but not their existing employees.

[Eagle]

I was recently promoted, and after my boss went over the new salary, he told me that my compensation index was around 80% for employees of my level.

That means I'm 80% below what the average salary of other employees at the same job level at our company make.

Before I got promoted, my compensation index was 96 (after getting the maximum raise for performance the previous year).

My boss said it was unfortunate and that they try to get every to 100% compensation ratio.

He said they would try to do what they could over the next few months to correct that.

Obviously, the squeaky wheel gets the oil. I'm sure if I don't raise this issue again, my next raise won't be until our annual raises.

How do I start this conversation with my bosses?

Besides being so far given a perfect performance grade from my supervisors and promoted rapidly, I'd like to begin to settle down and have a more quality life style.

That would require taking a mortgage, and the cost of real estate in Massachusetts is really not in line with reality, considering most of the houses here are well over 50 years old.

Is that a valid argument--that I want to be able to purchase a home, which is why I really need a compensation index closer to 100%?

First congrats on the promotion! I'd simply ask the question. Be honest. But don't expect to be making what others who have been longer at your position make. I'll highlight a few comments:

Do you believe, newly promoted, you are paid 80% of what others doing the same job substantially longer, are paid?

Have you looked at LinkedIn or any of the electronic sites like http://www.payscale.com/ that purport to identify salaries in specific postal codes? [I've no personal knowledge of any of these and no specific suggestion] What are new hires paid for this position in other, similar organizations?

I'd check on pay scale to see what others with your education and experience are paid. Yes, the squeaky wheel gets the grease. But you don't want to seem ungrateful either.

So you got promoted from Level A to Level B and expect to be paid the maximum that a Level B employee can receive?

I'm not sure how the company is structured, but I would think you need to be in the position for a while to grow into the highest achievable salary.

Unless you're on a fast track within the company....

You will not be paid the maximum at your new position because they want to give you room to grow.

tomhole brought up some excellent points. Ultimately, your pay-raise is effective when you are.

I was promoted back on April 1st, and my new salary is at the lower range for people with my new job title. However, my new salary is quite a bit higher than what my previous salary was (which was at the high end of my previous pay band).

It sounds like this is similar to what you are dealing with. It is perfectly normal. You are not going to get paid the same as veterans in your new job. And you shouldn't! They start you out low so that there is room for raises.

Bottom line: you start out at the bottom when you get promoted to a new pay band. This should not be a surprise. Also, this is not a bad thing because it means there is room for growth (salary-wise).

Work hard. Knock your next performance review out of the park. When it is time for annual increases, have some reasons for why you should make more money. If they offer 3% at that time, ask for 4% or even 5%. Just have some solid reasons for the asking for the raise (not because you want to buy a house - they do not care).

Looking for a different job to see what they offer is a risky move. It may backfire on you and force you to take the new job (which may not be as transparent with compensation).

Be happy that you got a promotion and a raise in this economy. There are many people still struggling to even find work.

Similar comments above here. The main one is that it may backfire if you are looking for another job offer and to be thankful for a promotion in this economy.

Let us know how it goes.

[clatoden99]

It really depends on a lot of factors:

1. Who wants the job more (you or your employer). If you already have a great job, they need to offer you a significant bump to come on board.

2. If you currently do not have a job, you do not have much room to negotiate (unless again, they really really want you) but you should make sure that your salary is within the average for your experience/location etc.

3. If #2 is true, accept an average job and then find a great job with the best salary.

[ThinkingCapital]

He said "a couple months" so I'd give him a couple months before you mention it again. Then, when you do, be polite yet firm and ask for an update. Don't let him brush you off. Get a concrete answer from him. As long as you are polite, you will be fine. Good luck!

[sethmachine]

Thank you all for your advice and pearls of wisdom.

It's been about 2 months now.

Besides my salary, there are other things that have made me unhappy at my job. These things combine and make it much harder for me to justify staying much longer, especially when I can work just as hard but get higher pay at much more brand name company.

I went out and applied to a prominent company for a similar job. They offered me a compensation that is roughly 50% higher than my current salary. Note that compensation is a sum of yearly salary, bonus, and stock, but it all comes down to more money per pay period.

I believe this offer is at parity with my current value based on my experience, education, skills, and the research I've done looking at similar positions and their salaries.

I have not made my decision yet, but I've spoken with a career professional, who advised me that I have the most leverage and options now when I go to my boss and let him know:

A) I am seeking a raise / promise of raise and
B) That I have a job offer which I am seriously considering

I am having this conversation this week. Ultimately I would like to stay, but financially it's making more sense to take the offer. I think the new job would increase my value and skill set significantly, and make me more useful to future employers. Especially for my current company, where re-hires are common.

I'll try address some questions/comments below.

You apply for another job that is offering a higher salary...when they offer you the position take it to your boss and tell him you're walking unless they match. If they like you they almost always match. Its a shame employees have to do that but thats how it works.

Thank you. This is exactly what I decided to do. My next step is just talking to my boss and see what they think.

As a manager, I try to get everybody a fair share of the allocated money.

Our bosses are given a bucket of money every year to distribute for both raises and one time bonuses. They decide how to distribute it. The highest possible raise is slightly above 3%, which is what I received in my first year. The problem is that even if I keep accruing salary at 3%, it will take about five years to reach parity (falling in the 100%/average compensation band for my job). That is only if I continue to perform at the highest possible level, otherwise my raises will be below 3%.

You are not going to get paid the same as veterans in your new job. And you shouldn't! They start you out low so that there is room for raises.

That is true, but I feel a bit disgruntled for a couple of reasons. My current employer places high value on education. They do not seem to understand that education does not necessarily correlate with actual value/skill. In many instances this holds true at my current job. I have one boss in particular who has made this known to me in private.

For example, if I had a Master's degree, I would have been hired into my current promotion / title from the get go, and likely given a much more fair compensation.

So I'm not even comparing myself to veterans. Just employees who got hired into a similar position just because they have a graduate degree, and therefore command higher compensation irrespective of their actual value and effectiveness. I am not saying this just because I'm a cynic, but again one of my bosses has made this clear to me in private conversations.

You will not be paid the maximum at your new position because they want to give you room to grow.

I'm just looking to get paid at the average band. Right now I'm about 14% below average.

[sethmachine]

UPDATE: Success!

It's been little over a month since I made this post.

After having a outside job offer as leverage, I made it known to my bosses and they made it immediately clear they wanted to keep me at all costs now and "forever". In very short time they were able to get the most senior executives to sign off on an immediate raise. I also secured a written promise of a second raise in the coming months.

I can't be any happier with the outcome.

[sv2007]

congrats!
It's great when things fall into place.

[ronb]

Passive Income and Savings

Sethmachine,

Bro - the reality is that your employer has a vested interest in making a profit margin off your labor - thats the entire point of hiring someone. Your work generates more than revenue than it costs to maintain your employment. So, your employer will ALWAYS look for ways to contain costs, and salaries are probably the major cost in the company your look for so.

I guess what I am saying is that its unrealistic to expect that your employer will try to limit how much they pay you.

If you aren't doing it now, it would probably pay to develop some passive income. Owning stocks, bonds or lending money via a platform like prosper.com or lendingclub.com is a good place to start.

[sethmachine]

Sethmachine,

Bro - the reality is that your employer has a vested interest in making a profit margin off your labor - thats the entire point of hiring someone. Your work generates more than revenue than it costs to maintain your employment. So, your employer will ALWAYS look for ways to contain costs, and salaries are probably the major cost in the company your look for so.

Salaries definitely are the major cost. However I don't actually push the bottom line most of the time. What I mean is that (I think) my salary mostly comes from overhead, so I'm not even sure they are making immediate returns from my labor. The idea is that there will be (exponential) returns from my labor at some point in the future, though this carries risk. However, my labor did just recently help to secure a new contract, so in that respect I did help expand business. So maybe you are right.

I guess what I am saying is that its unrealistic to expect that your employer will try to limit how much they pay you.

Unsure of what this means. Could you explain a bit more?

If you aren't doing it now, it would probably pay to develop some passive income. Owning stocks, bonds or lending money via a platform like prosper.com or lendingclub.com is a good place to start.

I have other debts that I need to pay before investing my surplus into investments. These debts have interests rates up to 5%, which probably exceeds any gains I make...plus I get a "guaranteed" 5% return by paying off the debt, whereas real investments are not guaranteed.

I've also maximized my company matching for 401K, which a free 25% return. I doubt I will ever get a 25% return on any other investment with little risk :]

Once I've paid off my debts, then I plan to invest my surplus income to get passive income.

[kingroot]

I work very hard until they were convinced by my work. Then you can bargain and market yourself in front of board. All these depends on your skill and the area you work. Anyway all the best.

[HundredK]

The best time to have negotiated for more money was before you accepted the promotion. I think a lot of people don't understand that and pin their hopes on getting a raise shortly after getting a new job. But unfortunately that's not really how it works in most cases.

Fortunately it did for you though, woo!

But really, negotiate on the front end whenever possible. They're offering you a job, that means they want you. There are ways to gently negotiate and see if they have any wiggle room (usually they do). But when you start complaining right after accepting a position, it really makes the employee look pretty bad.

[annibe11e]

Your boss already made you aware of the situation and expressed a desire to rectify it. I suggest you bring it up to him, and ask him what needs to happen to bring your pay up to the 100% compensation level. If it's something you can do, do it.

I would definitely suggest not bring up wanting to buy a home as an argument. Think about this...imagine two employees that both make the same amount of money. One is single and has a home and a high standard of living. The other is single with 4 children and cannot save a down payment and has a low standard of living. The company can't give the parent more money so they can have a certain standard of living. They don't pay employees based on what they buy, or their personal circumstances.

The bottom line, I think is, are you performing at the higher compensation level? If so, ask for the money.