Great piece Penelope; I like the way you invite people to look at more than just dollars and cents too. I read recently that wages in the US have increased by just 17% since 1980, so corporates have done a splendid job in minimising people’s expectations.

The biggest mistake I see in this area is that people leave the raise discussion to the last minute. This is one area in life where you can’t ‘cram’ or haul an all-nighter like you did in college. The pastoral analogy is a good one here - farmers have to toil away diligently all year round to ensure a bountiful harvest. You have to do the same in order to plant seeds in your boss’s head early in the year.

A lot of the mis-communication on this topic centres on bosses being genuinely surprised when people are unhappy with their raises. Establish clarity early in the year. “I wasn’t happy wth my 2.3%. I may not be a superstar, but I am a way better than average performer. What do I need to deliver this year to get a meaningful raise?” That will quickly notify the boss of your expectations and, more importantly, will force them to explain their thinking to you.

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Great point about preparation, Rowan. Successful negotiation for anything depends on good preparation. Salary, especially, is about performance over a period of many months, so you need to spend many months gearing that performance toward your planned negotiations.

–Penelope

I’ve become a fan of your column. However, I’m not really sure it belongs in the financial section of Yahoo. Perhaps this is why your getting pretty poor comments. Do you think there is another section this column should be under?

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Hi, Chris. I see where you’re coming from. Unless people have a huge amount of disposible income, their biggest financial asset is their career. People have more control over the trajectory of their career than the value of their home, and people have more ability to make a huge amount of money from their career than from investing their realatively small amount of money. Not that investing isn’t important, but for most people, managing their career is more important financial advice than how to invest their money.

–Penelope

As a manager who is always evaluating compensation and benefits plans and interviewing employees for promotions and raises, I definitely agree with some of your points.

The important thing for employees to recognize is the distinction between a periodic wage increase and a merit-based raise. In most organizations, the periodic (annual in most cases) wage increase is often determined by inflation and company performance and is not negotiable. This is what you get for simply doing your job. The 4% you mention is actually at the high end of the spectrum of annual wage increases.

This is where your other points - particularly 1-3 - are important in considering when asking for a raise or promotion. Always look for ways you can add revenue, decrease expenses, and increase productivity. As you say, always over-deliver. I’d also paraphrase a Jack Welch quote: “Make your boss look smart.”

I am hesitant to agree with the approach about including benefits in salary during negotiation. This shouldn’t be applied to all cases, most certainly. I can see it being beneficial in the examples that CareerHub gives. However, I’d personally be more comfortable with a prospect who was upfront about their previous compensation and benefits packages. Benefits plans are becoming more and more important in considering job change and should be talked about, but I believe they should almost always be kept separate in negotiation. There’s a lot of room for error in combining the two - you don’t want to be passed up simply because someone thinks you’ve misled them.

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Hi, Hunter. Thank you for your comment. Re benefits. I think each person should present themselves in the best light. The goal of negotiations is to put yourself in the best light while still being honest. There is no virtue in reavealing your whole hand when you are playing a game of poker. The rules don’t demand that you reveal that, and the same is true in salary  negotiations.

Great list. It almost goes without saying that you have to be preparing for that moment for a long time before it actually comes. Documenting what you’ve contributed to and how you made a difference along the way can give you ammunition for this kind of conversation. You almost have to think of it in terms of a resume, listing out accomplishments using action verbs and using numbers to demonstrate where you’ve added value.

Penelope - thanks for the feedback. Perhaps I worded it wrong, or I misread. Rereading CareerHub’s piece, I can see that they are differentiating between a compensation package and base compensation. In the case of a total package, benefits should absolutely included in the negotiation. Throughout my career, I’ve been on both sides of the table, and I know from experience that there must be a give and take between base compensation and the other elements of a compensation package.

In light of that, I intended “salary” to reflect “base compensation.” As someone with a sales background, a compensation package to me (commission, bonuses, trips, etc. on top of insurance and vacation) is indeed much more than just the base compensation. The entire package should definitely be negotiated as a whole. Hope that clears things up!

I just saw this on the front page of Yahoo, how cool! Awesome article Penelope.

Penny,

The truth hurts only when we are not prepared to accept it! This advice will only work if we are prepared to actively manage our lives/careers/actions in the same way that top level management manage a company’s resources - STRATEGICALLY.
Thanks for the heads up:)

This article is an eye opener to me. I really liked this sentence:

“You don’t deserve a raise just because you’ve been doing your job well for x number of months. It’s your job to do your job well — that’s why you were hired. You need to show that you’re doing more than you were hired to do, or that you’re doing different work that’s typically paid at a higher rate.”
Yes, we have go above & beyond to demonstrate that we are trudly adding a value to the organization. I’m going to keep this in mind at the time of performance discussions with my reports as well as my management. Great one, Penelope.

I was wondering why a lot of people are giving negative comments to your article at Y!Fin.

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Yeah, I wonder this, too. I can’t believe how many people take the time to comment week after week about how much they hate me. I wonder why they don’t just read a columnist they’d like more. Also, I find it incredible how many people post comments about sex. I asked my editor at Yahoo about that and he told me he actually deletes most of them, which is amazing to me, since there are so many left over.

–Penelope

No worries Penelope, keep doing what you like. As someone once said, “Be who you are and say what you feel because those who matter, don’t mind and those who mind, don’t matter.” (if they hate they have choices and can leave but if they are after you then they are reading it for sure, thats a good achievement.). I always love checking the online behavior and planning to visit some of your posts and comments.

Penelope -

I loved this column. I reviewed it on my blog (The Daily Machete) and added my own thoughts how to get raises. Hope you don’t mind I used the same headings (I figured if it ain’t broke…). You can read the post here: http://machete.wildjobsafari.com/2007/04/19/interviewing-how-to-brazenly-ask-for-a-raise.aspx

Keep up the great work!

Mike