Salary Negotiation Tips

Salary negotiation (asking for a salary increase, a pay rise, or simply more money) affects everyone from time to time. Salary negotiation can be difficult, and many people handle it poorly, causing frustration and ill-feeling. There are constructive ways to approach salary negotiation, and techniques to achieve good outcomes.

If you are a manager, you will need to handle salary negotiation positively. If you encourage people to adopt a constructive approach to salary negotiation, you will help to minimise upset and to achieve a positive outcome. As a manager dealing with salary negotiation or a pay increase request, it's important to encourage a grown-up, objective, emotionally mature approach. These ideas and techniques will help achieve this whether you are giving or receiving the salary increase request.

There is no 'proper' or standard way to ask for a raise or salary increase. It's not something that people are trained to do, and little is written about it. People use various approaches: they can write; discuss informally; discuss with colleagues and hope the boss gets to hear; they drop hints to test the water; they ask the boss politely; demand firmly; go over the boss's head, or maybe even threaten to resign, secure another job offer, or simply resign.

Largely people do not look before they leap; they are often under pressure, and they feel uncomfortable and stressed asking, so they fail to plan and control the situation, which makes achieving anything difficult. Simple planning and keeping control makes a big difference.

Knowing relative market rates helps objective assessment of situations - for employers and employees. Here is an example of market information about salaries of the sort that you can find in relevant media (newspapers, magazines and websites, etc). Having a good amount of information about the market, and not just your own situation, is helpful for employers and employees alike, and can avoid discussions centering on opinion or emotion. Of course situations vary and industry averages are just a guide, but it's generally better to have some external perspective than to approach pay and earnings issues in complete isolation.

The techniques here might not secure a salary increase immediately - there are usually very good reasons why this is not possible anyway - but these ideas will eventually bring a better reward and outcome than doing nothing, or doing something the wrong way. As a manager receiving a request for a salary increase, encourage people to follow this approach, and then respond fairly sensitively and openly. Only make promises you can be sure to deliver, and always try to understand the person's needs and feelings before you explain the company's position.

It is important always to recognise the difference between the value of the role that you perform (or any employee's role if looking at this from a manager's perspective), and your value as an individual (or the employee's value). The two are not the same.

If you continually feel frustrated about your pay levels despite trying all of the techniques and ideas for achieving a pay rise, it could be that your boss or employer has simply reached the limit of the value that they can place on your role, which is different to your value as an individual. You could have a very high potential value, but if your role does not enable you to perform to your fullest extent then your reward level will be suppressed. For example does a professor who sweeps the street deserve a street sweeper's salary or a professor's salary?

Salary levels are largely dictated by market forces (notably the cost of replacing the employee), and the contribution that the employee makes to organisational performance (which is particularly relevant for roles which directly impact on profitability). When you acknowledge this principle you begin to take control of your earnings.

Aside from issues of exploitation and unfairness, if you find that the gap between your expectations and your employer's salary limit is too great to bridge, then look to find or develop a role which commands a higher value, and therefore salary. You can do this either and both with your present employer by agreeing wider responsibilities and opportunities for you to contribute to organisational performance and profit, and/or perhaps with a new employer.

Focus on developing your value to the employer and the market-place, rather than simply trying to achieve higher reward for what you are already doing. Again, see the earnings survey example report below.


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