06 Sep 5 Steps to Getting a Bigger Paycheck
5 Steps to Getting a Bigger Paycheck
Do any of these sound like something you’ve said lately?
- I’m due for a raise.
- I’m a top performer and should be paid more.
- I’m working longer hours than others, so I should be paid more.
- I’ve been at this pay level for X months/years so it’s time.
- I believe I’m being paid less than my counterparts.
- I would be paid more if I worked for another company.
While your goal may be to get a better paycheck, there are a few things you should consider before knocking on your boss’ door.
- There are really two forces that drive pay increases: 1) Market price or what you are worth in the market, and (2) Internal value or what you are worth to your company. Let’s parse the way those forces can play out.
- Market price scenario: For example, if the demand for dental technicians in your city is hot, then your company may feel the pressure to pay 5% more to retain their talent.
- Market price scenario: The market price for a software engineer with 5 years’ experience should be higher than one with 2 or 3 years’ experience.
- Internal value scenario: In this example, you may have taken on more responsibilities or increased your job “scope.” You may be managing more people, more dollars, processing more transactions, serving a wider geography. Any of these could be topics for the pay increase conversation with your manager.
- Internal value scenario: For example, you are a project manager who brings in a particularly difficult project on time, under budget, and earn the company substantially larger profits. This may be a case for targeting higher pay.
- Many companies share their compensation strategies and policies in internal human resources educational materials so be sure to learn all you can before walking in your boss’s office asking for a raise! Ask your human resources manager where you can learn more.
- You’re already being paid for your great performance. Just because you’re working harder, better, faster doesn’t mean automatic pay increases in most companies.
- Although the media reports and high-level analysis show that there is an overall pay disparity between women and men, do not immediately assume that you are being paid less than your male counterparts. There are many factors behind the pay of each individual and comparing yourself to others around you is a failing proposition.
Take these steps to prepare yourself to ask for – and justify – your next compensation increase.
Know your market value.
There are two public websites that have great data. Glassdoor.com and PayScale.com. Search for your type of job in your city and within your industry or company. Collect, organize, then summarize what you collect and save the links to the information. Some publicly-posted job descriptions provide pay information, as well, so check out Indeed.com or Monstor.com to find similar positions.
Know your company’s target range of pay versus market rate.
A worker’s pay can vary quite a lot and still be “at the market price.” Companies often target the median or 50th percentile market pay. Other companies target 80-90% and some are as low as 25% of market. What market percentile a company should target is their business decision and not one you should try to debate; just be aware that there are wide variations. Collect the data if you can; you’ll be better prepared.
Determine your “bigger paycheck” strategy:
- Are you asking for a promotion increase tied to taking on more responsibility that is quantifiable?
- Are you asking for a cost-of-living-adjustment (COLA) since inflation and/or the Consumer Price Index (CPI) has increased substantially in your city?
- Are you asking for a pay increase in your current role based on market data that you have collected?
- Have you gone above-and-beyond and can quantify how you earned your company better results (e.g. cost-savings, more revenue, greater customer satisfaction, etc.)?
Prepare for the conversation with your manager
- Be accountable for owning the discussion, from beginning to end. Don’t “wing it” or assume your manager will take your request and run with it.
- Prepare your outline and even write out a script, if necessary. There is nothing wrong with going into the meeting with your research and an outline of what you want to say.
- Apply the “Law of 3s” – limit your main points to 3 items. Keep repeating them, if necessary, to really drive your main points home.
Ask for a dedicated 30-minute meeting with your manager to talk about your career.
- Be positive, show commitment to the company, your role, your manager. Do not say anything negative, don’t play the victim, or point to others around you who have been promoted or gotten increases.
- Be confident. Don’t apologize for taking their time or bothering them since, “They are very busy.” This is your time. Sit up, smile, and dive in to your agenda.
- Don’t start the meeting on business stuff, task reviews, or an update on something else. You will lose precious time.
- Bring in a summary of the research you did. Don’t overwhelm them with too much paperwork.
- LISTEN! Ask open-ended questions such as, “Do you have any questions about what I shared?” “Do you have any feedback for me about this proposal?” “Do you need any additional information?”
- Close with next steps (do not expect a commitment today!): “I realize you need time to think about this and review with others. May I set up a follow up meeting in 2 weeks on this?”
- Even if they do say an increase is not possible at this time, ask if you can follow up in 2 months to continue the conversation.
The bottom line is that you have C-H-O-I-C-E-S. This is my favorite word as a career coach. Only you can decide what path you take your career and if it’s a fair “deal” to remain in your current role. Some basic options are:
- Stay in this position at this pay level.
- Ask for a pay increase.
- Apply for higher-paying roles within your company.
- Seek another job outside your company; just don’t quit before you land one!