It’s time for you to negotiate a pay increase. You’ve worked hard all year and you deserve it. What do you do?
Most people take a deep breath, walk into the boss’s office with cap in hand and humbly ask if they could have more money because, “Well…it’s been a year since my last increase and I’ve been working pretty hard.” This approach may work, but it’s demeaning and unprofessional. More importantly, it is not an approach that will maximise your outcomes.
A much more effective approach and one which allows you to keep more of your self-respect is as follows.
Step 1: Preparation
For effective salary negotiations you should prepare the following:
1. What the current market rate range is for someone in your industry and with your experience.
2. Your key achievements for the year including how you’ve added value to the company. Feel free to collect as much information as you feel is necessary to make your point.
Once you’ve collected your facts work out what your objectives are. In other words, how much of an increase do you want and what is your absolute bottom line. Make sure your objectives are realistic.
Decide on a Strategy
1. Decide on the best time to make your approach. Make an appointment with you boss or HR manager and tell him/her that you want to discuss your salary increase.
2. Try to anticipate the other party’s counter arguments and what their needs are.
3. Decide on what aspects of your package you’re prepared to be flexible with.
4. Decide on what your opening/maximum bid will be.
Step 2: Discussion
If you prepared properly you’ll be in a much stronger position to enter into discussions. During the discussion:
• Attempt to have the other party open the bidding. Ask the question, “May I ask what sort of pay increase you’re thinking of giving this year?”
• Your opening bid should be your maximum position. Don’t apologise for it.
• Look for signals that may indicate a willingness to compromise. Try to work with those suggestions.
• Avoid inflexibility, be prepared to give and take.
• Try to work for a win/win outcome. Win/lose scenarios mean that one party feels hard done by. This is not a good long term strategy. Remember that you’re negotiating with people that you work with.
• Make sure you practise effective interpersonal communication skills. Never raise your voice or show signs of anger no matter how badly you think the other side is behaving. Stay in control by sticking to your strategy.
Step 3: Closing
This should be relatively simple but many people leave important details unresolved (such as when the increase will take effect). When closing make sure you get a firm and clear commitment to everything you’ve agreed on. Seek clarification on:
• Timing of increase/s
• The specifics of any conditions that need to be met. It’s very important to be as specific as you can otherwise you may run into interpretation problems later on.
To help you do this you can say, “Thank you for your offer/s. Before I leave I’d quickly like to confirm exactly what it is that we’ve agreed upon just in case I’ve misunderstood some of the points made.”
Or you could say, “Thank you for your offers. I’ll put all this in writing and have it on your desk by tomorrow.”