How to ask your boss for a pay-rise

Posted on Monday, July 20th, 2015


How to ask your boss for a pay rise

At this time of the year I receive a lot of questions from my clients about how to approach the salary increase conversations with their boss.


The straight answer is that if you have to initiate the conversation, then likely you have missed some of the following points and, with some rare exceptions, you aren’t in the best position to get more money.


Let’s clarify what pay-rise we are talking about in this article. In general you should be able to receive a minimal salary increase that should balance inflation. Depending on where you work this may be mandatory under local employment law. What we discuss here is merit increase on top of salary adjustments.


Let me summarize what you should do to put you in the top spot to receive a salary increase. In some cases you may be still on time, however most of you may have to wait till the next window:


  1. At the beginning of the year when targets and objectives are given, you should be clear about the implications of you achieving and overachieving your targets;


  1. You should have clarity on how your performance will be measured;


  1. Make sure you document your achievements;


  1. Understand how much you are worth in the company and in the market;


  1. Have options;


Let’s clarify each point in the following “5K framework”:


1) Know your targets and Implications: let’s be honest, no company should provide incentives for underperforming. It does happen at times to provide financial incentives in this scenario, but that should be an exception triggered by unexpected events. In the past I have supported pay increase to recognize individuals that stepped up in a time when we were short in staff, led the team in my absence or achieved their targets in spite of massive challenges (health problems, accidents or other struggles). In general it’s your responsibility to understand what it will take to be in pole position for a promotion or a pay rise. You can do this during review and planning sessions, end of year appraisals or an ad-hoc one on one meeting with your manager.

It’s also best practice to check who are the stakeholders. It may well be that your manager doesn’t hold the power to give you a pay rise, in which case you want to understand who does and what they want to see to support the increment.


2) KPIs: it’s your responsibility to have clarity on how you will be measured. Let’s say that you work in a business development sales role and that the “pot of money for merit increase” is limited. You want to know what KPIs will be used to give the salary increase and how many people may be able to have access to it:

Example of KPIs:

– Revenue? How much? What percentage of plan?

– Profitability? how much?

– Client portfolio? How many clients?

– Other metrics: Length of contract? deal size?

– Eventual soft skills: I have always measured my guys based on Behavior, Attitude and Performance. Numbers alone wouldn’t have been enough.


3) Keep Track of results: Manager’s brain is always working around the clock and you may help both yourself and your line manager if you take good note of your achievements. Try to be as factual as possible and keep client’s “thank you emails” as well as emails from business partners that prove how well you have performed. Mind that this isn’t due to being defensive, but to help future conversations. It also help your manager in case he needs to prepare a business case to get your pay rise approved.


4) Know Your Value: Don’t be afraid to ask your business partners how you are performing and how you can improve. If you were to leave tomorrow, there would be a cost to the company, you want to figure out what that cost looks like.

Scan the market to understand how much people with your background and performance are paid. You may discover that you are already paid beyond market rate or it may become clear that your employer made a real bargain when he employed you at less than the market average. Nowadays you will be able to find a lot of Employer branding sites that publish salary data in different regions. Having said that, try to be realistic on what you can achieve. In recent times following the GFC and some major corporate reorganizations, many senior executives have flooded the job market. Great talent has been retained, Good talent often has been made redundant. Good talent available at short notice represents a big competition if you are aiming to achieve a big pay-rise.


5) Key elements of Negotiation: before even starting a negotiation, have clear in mind your boundaries. What’s your goal, what’s your bottom line, how far can you stretch. Understand if you are in a position of power: do you have a short list of real alternatives outside of your current organization in case the salary conversation goes south?

Prepare a couple of scenarios before the meeting: How will you react if you receive the following three answers? Yes, No, Yes but with conditions.

As Sun Tzu says in the Art of War: “Battles are won before they are fought”.

You must prepare well and do your homework!


One last point: many executives complain about feeling depressed and frustrated because they are in a “golden cage”.

Before you have a salary increase conversation, make sure more you ask yourself if Money is really what you want and what will make your life better. You don’t want to have a 30% salary increase and still be miserable for the next few years.


For the records: my standard answer to my clients complaining about Golden Cages is: “Please give me a break, a cage is and remains a cage no matter if it’s made of steel or Gold”.


Author: Fulvio Felletti – MD at Fellettis Pte Ltd

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