Have you thought of asking for a pay raise at your job but were unsure on how to approach your boss? Planning your strategy for salary negotiation is the key.
At Gardner Employment Law, we consult with clients about strategies for increasing their compensation. If you would like to learn more in this area, give us a call.
Do I Qualify for a Raise?
If you have been performing well, if you respect and follow company policies and procedures, and if your work contributes in any way to your company’s success, you could qualify for a raise. Look back through your reviews, emails, projects, presentations and make an outline of your successes to date.
Even though some companies maintain that certain positions are limited in what salary can be paid, in truth that is an arbitrary decision by management. If your boss responds that you are at the “maximum” in the salary range for your position, start by start by responding, “I have an idea that could make the company more money. Can I get back to you to discuss my idea?” Then research the other companies in your general locale for compensation paid to employees doing what you do or what greater duties you could do. Go back to your boss with the information about compensation and suggest a different title. This gives your boss new information to consider.
Some companies will not stray from a set salary range. So you must creatively respect the company policy with different alternatives.
How do I Ask my Employer for a Raise?
After you have analyzed your qualifications, start by writing down questions to ask your employer and points that you intend to cover. Be extremely prepared. Even rehearse your outline beforehand.
Typically some employers discuss raises during performance reviews. Even if your supervisor does not raise the subject at the review, you can raise it. However, annual performance reviews are not the only time for this discussion. You can schedule a special meeting with your supervision for this discussion.
You need leverage to have an effective discussion with your boss about a raise. We discuss leverage in Executive Compensation. Leverage is that special persuasive power to move the other side closer to your desired outcome. Leverage can be positive or negative. Positive leverage is your ability to supply what the opposing party wants. In the workplace, your value can be things like your great track record, your superior abilities, your personable manner in building contacts, the book of business that you have built, your dependability to come through in a pinch, your leadership abilities, and many other characteristics. Consider whether you’ve taken on additional responsibilities or projects, and whether the projects have added value to your company. These are examples of assets that you provide that benefit your employer.
Be ready to provide concrete examples of your value. If other employees can provide these same assets as well or better than you, your leverage is diminished. Give your boss examples of how you are better than others similarly situated.
Negative leverage is the ability to put the opposing party in a worse position. It is threat based. Based on the theory of loss aversion, experts postulate that persons usually view possible losses as being stronger than possible gains.
In an amiable employment arrangement, positive leverage generally enhances the relationship. You should convince your employer that you are the only person who can do what is needed or you can do it best. Negative leverage can create hostility and should be used sparingly. You might gently point out or imply to your boss what could happen if you leave the company, a loss that you have the power to prevent.
Get the Big Picture
You likely are considering a request for equity in the company as part of your upward trajectory. We explain the various types of equity in Equity Ownership. You should know as much as possible about how the equity interests are defined in your company. You are negotiating for a percentage ownership, but a percentage of what? Are there any restrictions on the shares or stock options? If options are being discussed, what are the vesting and exercise periods? The answers will be critical. As Forbes has suggested, what really matters is the percentage of the company the offer represents, what the company could be worth in the future, how long any options take to vest, and when you have to exercise those options.
As a trial lawyer who’s been in many courtroom battles over money, I always counsel my clients to “look out for number one.” In other words, be cordial and professional, but be sparing with your trust during negotiations. Find out everything that you can about the company and its true decision-makers before you enter the negotiations.
Get Legal Advice Before Signing Documents
We all think that we know and understand plain English. That is not enough in understanding the legal consequences of documents that you sign at work. Always see an expert contract lawyer before signing any binding agreement. In Texas, anyone who signs a document is presumed to have read and understood it.
I had a client once who came into our offices after he was in trouble over language in a document he had signed. He said, “In my 40 years in business, this is the first time that I didn’t see a lawyer before closing the deal. I thought I knew enough to do it myself.” Like this client, don’t learn that lesson the hard way.
Be Smart in Your Negotiations
Being cautious is the smart way to proceed in negotiating your compensation. If you are successful in negotiating a raise, be sure you are clear on each contract term. Companies often try to rush to conclusion. You should take the time to meet with a top employment lawyer who has experience in negotiating employment contracts to guide you during the process.
At Gardner Employment Law, we are in your corner to help you get the deal that you deserve. If you want an expert on your side, give us a call.