The Secret to Negotiating a Raise During Tough Times
I love my job, but I’m chronically underpaid. I'd like to ask for a raise at my performance review this year, but I’m afraid my manager will say no. We’ve had some budget cuts this year, and even in good times, the typical raise at my company is anywhere from 2-3% (about $3,000 for me). I’m scared I’ll look greedy for even asking—but if I don’t get this raise, I really need to start looking for a new position. Any tips for this gal as she heads into negotiations?
—Unsure and Underpaid
If we’re not narcissists starring in our own personal Greek tragedies, we suffer from every fear imaginable when facing the prospect of seeking a raise or promotion.
They’ll fire me, we think. Or at the very least, banish me to the purgatory of a dead-end position. They’ll think I’m greedy or, worse, delusional. I’ll never be invited to lunch again. I’ve even heard some people say they’re afraid that if they successfully negotiate a promotion or raise, they’ll get what they ask for. Because then the jig will be up. Everyone will finally know we’ve been faking it all these years. Then they’ll fire us.
Please start your negotiation plan by treating these fears as the devil whispering in your ear or simply as common emotional weather to which we are all subject. The storm of doubt will pass. Today you feel lower than the belly of a snail, but tomorrow, after your boss drops by your office to tell you upper management praised the results of your most recent project, the sun will be shining again. You’ll walk the halls with your confidence in yourself restored and the blue bird of happiness on your shoulder.
These internal confidence-building techniques are a critical first step in any negotiation. It’s a truism that the person with the most negotiating power is the one who appears to have the ability to walk away. That doesn’t mean you need to threaten to leave. It just means that you’re sufficiently confident to make your negotiation partner begin to think, Gee, I could lose this employee and this year I’ve been told my most important assignment is to hang on to every “engaged worker” we’ve got.
I’m wagering that anyone who bothers writing to The Daily Muse for negotiation advice is one of the most sought-after people in American business today: the engaged employee. So here’s my next piece of advice: Include the term “engagement” in your discussions, thereby characterizing (or “framing”) your work as exceptional.
Just this year, Gallup reported that only one-third of all employees are “engaged,” while at the same time noting that companies with the most engaged employees are significantly more profitable, have considerably higher customer satisfaction ratings, and suffer from less turnover and absenteeism.
Remind your negotiation partner of these findings. Not only does it reinforce your negotiation theme of being an engaged employee, it also highlights how knowledgeable you are about the metrics that matter most to your superior.
Framing your value to the firm as an employee who is engaged is the kind of self-promotion that women find particularly difficult. To avoid gender “blow back” (the subtle sanctions doled out to women who cross gender boundaries by appearing prideful), focus your discussion on your ability to engage the disengaged around you. If you are a manager yourself, be prepared to talk about the ways in which you believe you can re-engage your team or co-workers this year and to thereby directly contribute to your company’s bottom-line profitability. The social scientists who study attitudes toward women in the workplace tell us that when we frame our value as other-serving, we avoid the ill effects of gender blow back.
Sound knowledgeable on the topic of engagement, mentioning that a Gallup survey found that managers who focused on their employee’s strengths could all but eliminate “active” disengagement. Appeals to authority are among the top principles of influence. Not only does referring to authoritative outside sources make your pitch more trustworthy, it also serves to alleviate any fears your negotiation partner has about making a decision to give you a sufficiently significant raise to bring your compensation up to market value.
Remember, you are often providing your bargaining partners with the ammunition they need to get a green light from their superiors. The better the case you make, the more comfortable they’ll feel recommending it as their own idea.
With this strategy, you can comfortably ask for “market” compensation even though your employer is currently “anchored” by your existing below-market compensation. You need to re-anchor your value by referring not only to what the market is paying people like you, but to disabuse your bargaining partner of the idea that next year’s compensation should be constrained by last year’s salary and benefits. Here’s just one “push back” to the percentage excuse. I’m sure you can devise others that fit your particular town in your particular industry.
The percentage increase isn’t the issue here. The issue is what the market is paying for people like me. The market price of employees is just like the market price of anything else. Although buyers might regret the fact that the value of real estate increased 20% last year, it’s just a fact of life. I’m like a new house in a tight real estate market. My value is what a willing buyer will pay a willing seller for me.
Then just stick with numbers and don’t fall into the trap of talking about percentages. Reframing the compensation issue as market value rather than a percentage increase would look something like this:
Your Boss: That’s a 12% raise. We never give raises that high.
You: I understand the problem with percentages, but what we’re talking about is my dollar value, not the difference between my value today compared to my value last year. The market for me is (say) $150,000. That’s what I’d get if I were looking for another position. But I don’t want to look for another position. I love working here, and I’d love to be given the chance to improve our performance by duplicating my engagement in our disengaged employees.
Know and appreciate your own value. Frame yourself as someone the company needs to continue to be successful. Re-frame any metric your negotiation partner uses—like percentage differences—as market value, re-focusing the discussion on hard dollars.
Good luck and let us know how your discussions go!
Photo of employees courtesy of Shutterstock.
About The Author
Victoria Pynchon is an attorney who practiced commercial litigation for 25 years. Since 2004, she has been mediating and arbitrating commercial disputes - the former with ADR Services, Inc. in Century City and the latter with the American Arbitration Association in Los Angeles. In 2010, she founded She Negotiates Consulting and Training with her business partner Lisa Gates. In 2006, Victoria earned her legal masters degree in Dispute Resolution. She has been teaching negotiation and providing negotiation consulting services to lawyers, executives, professionals and entrepreneurs ever since. She is the author of two books, The Grownups' ABCs of Conflict Resolution (2010) and Success as a Mediator for Dummies (2012).