How to negotiate a pay increase inside a company

Posted by Sarah Hobbs

There comes a time when each of us feels like we’re eligible for a pay increase, but broaching this is often a difficult situation which, if handled badly, could sour future relationships. Here are four things to bear in mind which will help you secure that elusive pay rise and maintain good relations with everyone involved.

Think about the context. When looking for a pay increase it’s important you understand the wider situation facing your company and the decision makers. For example, if your company is downsizing, cutting costs, laying people off, or suffering from the recession, then it’s going to be more difficult to secure a pay increase. Additionally, many companies have rules about the timings or size of increases (for example many companies limit salary increases to 10%), and if you want to break those limits, you need to factor in that the decision will need to go past the HR Director or Managing Director for sign-off (this is to regulate any inappropriate increases). And lastly, remember that sometimes your manager’s hands are tied – a lot of people take their unhappiness about not being able to get a pay rise out on their manager, which is like shooting your advocate! Remember to keep them onside no matter what
Think about the reason. Do you know why you’re asking for a pay increase, and is it a good reason? If you’re going to succeed you need a very strong rational on the added value you have delivered for the company, or the increasing responsibilities you are taking on. For any pay increase, the rational should be signed off and, rather than waiting (or hoping) for your boss to make a case for you, you should be supplying them with the ammunition they need to understand and sell why you are worth more money. Have you taken on more responsibility, or been given a bigger accountability? Have you taken on new people to manage? As long as you’ve got a brand new challenge you stand a chance of securing a pay increase. Have you delivered at a higher level than expected for your grade? Pull together facts and figures that show your new initiatives have added real value or cut costs and justify a shift to a higher pay rate or grade. And no, not having had a pay rise for a while, or others having had one, are not good reasons!
Think about the timing. Most organisations work on the basis of annual pay reviews, so bear in mind if you’re asking for an increase outside of that it means you think your performance has increased well above the average increase. Such a pay award is likely to be highly monitored and scrutinised. With that in mind, it’s important to make sure you’ve built some recent momentum behind you rather than just asking when you’re doing your normal job in the normal way. And lastly, don’t just drop it on your manager – approach it very much like a project where you can drip-feed your feelings on it bit-by-bit and build wide support with peers, your manager and your manager’s manager so there is minimum resistance and a lot of support for your increase. The best way of doing this is not to talk solely about pay – but to talk about achievements, collecting data on the impact your initiatives have made, and sharing good news by giving facts and figures that prove you are an asset to your organisation. Talking about pay can be drip fed, too, but use a very light touch with this. Achievements are very persuasive.
Think about alternatives. Whilst we’ve looked at pay increases, the reality is you can negotiate other things which are of benefit to you, and which typically cost very little to the organisation and potentially do not need sign off by a senior manager. For example, are there things which could be done around flexibility of your working hours or working more from home? Or could you request extra holiday or to attend a particular conference or training course which would not ordinarily be available?

Take Away