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Pay for Skill – Danger Alert!

There are many different organizational philosophies around compensation and how employees should be paid and/or rewarded. I am not necessarily convinced that any one pay philosophy or pay practice is universally better than another; however, I do believe you need to strive to find an approach that will work for your organization. I firmly believe that if you have invested in conducting proper job evaluations and market pay studies, you will have, at the very least, established a solid foundation on which to build. That is, you will have a pretty good handle on how you will bring new hires into your company based on what the market is paying for their knowledge, skills and abilities. People that bring the desired level of KSA’s should be paid around the midpoint (market) of your pay band, less experienced are paid closer to the minimum and those with more experience and expertise perhaps come in closer to the maximum of your band.

DangerBut what about once they have been with your organization for some time? What criteria do you use to determine if they receive a pay increase or not? Do you provide pay increases every year based on changes in cost of living? While that might seem “fair” to you and your employees at first, you aren’t exactly incentivizing for better performance and rewarding accordingly! Another approach, which I am a bigger believer in, is merit pay or pay for performance. The basic tenant of this approach is that those employees that perform better (i.e. make you more money) get the highest pay increases and rewards. Now, in order for this to work, you need to have established a pretty decent performance management system or culture whereby goals are set and measured objectively and people are held accountable for their results. That can be a big “IF” for a lot of companies.

Another approach I have seen in companies, especially those in the professional services industries, is to pay or reward for skills. Typically, in most professional services companies, they invest quite heavily in the training and development of their people. The more you know about C# programming or Oracle databases, in theory, the more valuable you are to the company. The company can then “sell” your knowledge and capabilities to its clients and thus increase its own revenues. So, what happens in these situations is that employees receive pay bumps or “market” increases based on their enhanced skills portfolio. Warning – this can be a slippery slope!

This approach, a pay for skills model, can wreak havoc on your companies’ compensation scheme. What I have seen happen is that employees’ go on training courses, obtain certificates, certifications, etc. and then expect an immediate raise. They often come back from writing the certification exam with all kinds of salary surveys that show how employees that get a certification in XYZ earn 1/3 more than their peers who don’t have the certification. What they don’t tell you is that if you dig into the numbers, these surveys are pretty much manipulated by the vendor to justify the cost of the certification…but I digress.

This then becomes a perpetual cycle of being held hostage every time your employees go on training. By paying for “skill,” you end up NOT paying for the value derived from the skill. Meaning, just because Joe is now a Certified Widget Designer (CWD), it doesn’t necessarily mean that Joe is a GOOD widget designer. Sure he has demonstrated some level of knowledge required in order to obtain the certification; but that doesn’t mean Joe is applying it on the job or creating new/more value in his current role. You need to recognize and reward him for that based on his performance.

Now, if Joe leverages his new CWD certification and designs a new cutting edge widget, or mentors/trains others to become better widget designers, then that is a different story and that my friends, is an increase in performance! As well, if Joe goes on to be so good at making widgets he now has his eyes on leading a team and he gets promoted – well that is a promotional increase – all valid reasons for a pay bump!

So a word of caution if you are paying for skills right now – at some point in time you are going to be held hostage by this approach. Your staff will quickly figure out that the only way to get an increase is go on training and get some sort of certification. Are you willing to approve and pay for any and all training requests now so that all staff has an opportunity for pay increases? If not, why not? What message does that send? What are you telling your employees about the importance of their performance? Is that even important to you? I simply caution on the pay for skill approach and doling out buckets of cash for certifications. That is a short term “solution” that will only end up in longer term pain for you. You are basically encouraging a mercenary type of approach and not demonstrating the causal compensation link between your company and its employees. You want to recognize and reward employees for doing great work – there are better ways to do it then pay for skill. As always, I welcome your comments and feedback.

Image courtesy of digitalart/FreeDigitalPhotos.net



Breaking up is hard to do

Break ups are tough – both in your personal and professional life. Sometimes, despite the best efforts of both parties, things just don’t work out. Often enough, one side wants it to work out more so then the other side does. Typically, the other person knows this and when they have made the decision to move on (instead of trying to work things out) they often use the line, “it’s not you, it’s me.” Important to note here, it doesn’t matter if I am referring to personal or work relationships here!

Breaking UpHere is the thing, as employers, we sometimes have to face the fact that sometimes things just aren’t meant to be between employer and employee. You can try and make things work, you can do your best as a leader and/or HR Pro, but it simply doesn’t work. The reason being, the other party has their mind made up in terms of what they want (to do) and there is no changing their way of thinking.

Case in point, my good friend Brian who works as a Sales Manager recently experienced a break up with one his employees. “Roger” came to Brian’s company a few years ago with a solid base of experience and a good track record, albeit, he had a bit of tendency to change jobs every 2-4 years. Brian took a chance on hiring him and for the first two+ years things really paid off. Roger took to Brian’s approach and flourished under his leadership and quickly became one of Brian’s rising stars in his department.

Brian, whom I consider to be a great manager, did all the right things when it came to Roger. He coached him on a regular basis and invested a lot of his time advising and mentoring Roger and supporting his development. When Roger expressed an interest in doing and being more, Brian invested in leadership training and broader technical sales training for Roger. Brian kept the lines of communication open with Roger and always made sure he and Roger were aligned in terms of Roger’s career goals, etc. Year over year, Brian invested in enhancing Roger’s knowledge, skills and abilities and Roger continued to receive pay increases above the norm due to his job performance.

At the same time, Brian’s department continued to grow and he added more and more staff. Some of the new staff were junior and some came with more experience then Roger. However, Brian continued to make it clear to Roger that he was his #2 and he continued to pay for Roger’s training and development and kept coaching and mentoring him. A few months back, things began to change. After each training course he went on, Roger started to ask for more money. As Brian continued to develop him, Roger wanted more money because he thought he was continuing to become “more valuable.” Brian did all the right things; he spoke to Roger about how he would continue to reward him based on his performance. He explained how Roger was paid and what percentile he was in, etc. and made it clear the training and development was in investment in Roger, not a pay for skill model. In short, Brian was as transparent with Roger as he could be. He continued to paint the picture as to what Roger’s (bright) future was and would look like at the company. Three months later, Roger quit.

So what happened? Brian was devastated when Roger put in his resignation. Brian started to question himself and his management approach. What did he do wrong? What should he have done differently? I had to reassure Brian that there was nothing he could have done differently nor should he have. Roger told him it was time for him to move on to a different challenge, but the reality was that Roger was (mostly) leaving for more money (salary). You see, in his career, Roger was never told “no.” He was used to getting what he wanted, when he wanted it. In his previous jobs, he either got more money or he moved on for more money. He used paid training as a way to build up his personal portfolio to leverage it for more money with his current or other employers.

Some secondary reasons also emerged. Turns out, Roger was a bit insecure. Despite Brian’s constant communication and reassurances, Roger panicked when growth occurred and other talent was hired. For some innate reason, he didn’t feel like the “top dog” anymore and he felt threatened/insecure in his role. It is possible he tried for a money play because he thought he might not be as “valuable” to Brian with more staff on board.

Brian found out about these things because he has a great HR team at his company who did a thorough job with stay interviews and their final exit interview with Roger. During his exit interview, Roger indicated that he was moving on for money (contrary to what he told Brian). Brian was confused as to whether Roger was really moving on for a better opportunity or if he was just using this as a way to get more money from Brian (something Brian stuck to his guns on).

As well, the industry Brian works in is pretty small, so he found out about some of Roger’s insecurities (through others) after Roger had left. All of which, left Brian feeling a bit down. Worst of all, for both Brian and Roger, Brian came to find out that Roger left for $6K more in salary and is by no means happier in his new role/company, but he is, however, “making more money.”

I had to “counsel” Brian not to take this personally. Sometimes things just don’t work out – they just aren’t meant to be. You can do all the right things as a manager; however, if your employee is hung up on wanting/thinking they need to make $1k, 2k, 5k more, you won’t get them past that, no matter what else is happening. That is, if direct cash compensation is the #1 driver of job satisfaction, there will always be an insatiable appetite to have/make more. Additionally, employees that can only focus on making the next dollar more will never get past being told “no.” They will always make their next move for more money and more money alone. That in turn will make them happy for the short term, but in another 2-3 years, they will need to move on again.

The best move for Brian is to live and learn. He made the right call – he wasn’t going to be held hostage by giving more money just to retain Roger. Roger was competitively paid and well supported by Brian. As tough as it was for Brian, this breakup was almost inevitable. Brian had to let Roger make his decision and move on. If he didn’t, and gave Roger more money, they would be revisiting that conversation every 6-12 months as the “Roger’s” of the world are always focused on how/why they should/need to be paid more (than everyone else) and they are simply incapable of seeing the bigger picture. At some point in time, the “Roger’s” hopefully reach a level of career maturity whereby they can look at a total employment compensation/experience package and make better (employment) relationship decisions. Until then, the “Roger’s” will continue to cycle through different jobs to make a few bucks more. As I told Brian, sometimes it’s not you…it’s them! Break ups are tough and you need to move on. No amount of relationship evaluation was going to make the Roger situation work out any differently. I advised Brian to broaden his evaluation of the talent on his team. He needed to invest more of his time and energy into development a few key employee simultaneously. Continue to keep the lines of communication open, but know what you are getting into. The break up with Roger could have been predicted based on his past work history. It wasn’t a reason to not hire Roger, but Brian shouldn’t have been surprised when the break up happened. Much like in our personal lives, there are people that struggle to commit, the same applies in the workplace and that is when the break ups occur. As always, I welcome your comments and feedback.

Photo courtesy of David Castillo Dominici/FreeDigitalPhotos.net

It’s all about the money – or is it?

Fundamentally, one of the biggest challenges any company can be faced with is employee turnover. Whether you subscribe to the theory that losing someone costs 1.5X their salary, or whether it is double that or half of that amount, or whatever; the bottom line is that it costs you money. So it would be in your best interest, as organizational leaders, to make sure you understand WHY you may be experiencing turnover so that you can address the root cause of it.

MoneyIn far too many companies, the senior leadership group simply does not want to hear about, or understand, the reasons for turnover in their organization. For many of them, anything beyond someone leaving for more money, they take as a personal affront and don’t want to address the issue. It is much easier for them to understand cash. It is clean, simple and transactional. That is, the employee was making $40K at your company, their new employer is paying them $60K; therefore, it is a simple economic decision. So, now we just have to replace them again with someone who will accept $40K.

Nine times out of ten this approach is wrong…well, maybe more like 99/100 times. All other things being equal, unless your compensation structure is severely out of whack, people aren’t going to leave you for $3-4K more in gross salary. The job search process takes time, effort and is very stressful. People get comfortable with where they work, the people they work with, the predictability of their routine, etc. Unless the place is a complete hellhole, a few bucks more isn’t worth it to go through the job search process and leave where they are at now and walk away from their friends, tenure and pension.

As most good HR Pros know, it is typically something within your organizational environment or culture that drives the decision for employees to want to move on. Perhaps they work for a manager who is a tyrant, can’t be trusted or doesn’t support them. Maybe there is nowhere for them to grow in the organization anymore.   Perhaps a lack of communication from sr. management is causing them to be insecure about the company’s future, or maybe their work assignments just aren’t challenging enough and they need to move on in order to grow. It could be any one or a combination of those factors that drive them to look elsewhere.

On the rare occasion it is about money, you need to make a decision. Does it appear as though all of your voluntary attrits are leaving to make 15% or more wherever they are going? Than it is possible that you have a compensation issue and you need to do a serious market evaluation to ensure you aren’t completely out of whack with the industry you are in. If you need help, drop my colleague Sabrina Baker a line at Acacia HR solutions and I am sure she would be happy to help you.

If it is just a case of a “one of,” than you need to decide if paying someone completely outside of your compensation structure is worth it. It has been my experience that if you have a solid compensation system, it never pays to make counter offers to bend to the whim of adjusting salaries when staff is looking to leave. The person receiving more money is simply a mercenary who will only be happy until they figure out how they can leverage you (or someone else) for more money elsewhere. I would simply wish them good luck in their new role and move on.

In most cases though, you usually don’t have a compensation issue you have a culture issue. As an organization, you need to peel the layers back and look into the underbelly of your organization. As leaders, you need to decide if you really want to “fix” the issue by getting to the heart of the matter or if simply want to gloss over the root cause and ignore what ails your company. This is the difference between putting duct tape on a leaky pipe vs. replacing the old pipe with a new one. It means a lot of organizational introspection. It means being open and honest with yourself, your managers and your employees. It means that you understand the importance of talent and the value they bring to your company. It means accepting that there isn’t a people tree to simply pluck your next hire from. It means that you “get it” in that you can’t simply just “plug and play” new people into your organization and their roles and expect no impact to productivity or morale. Ultimately, by (wanting to) deal(ing) with the root cause of your attrition, it means that you truly understand that your people really are your human “resources.” As always, I welcome your comments and feedback.

Image courtesy of sheelamohan/FreeDigitalPhotos.net

“I’m not paid enough!” (Part II)

In my last post on this subject, I blogged about the two type of issues that generate this type of statement from an employee. I indicated that whenever a manager or an HR Pro hears this statement, it is either a situational based issue or one of circumstance.  In this post, I focused exclusively on the situational based challenges that one might face and gave some insight as to how to resolve them.  As a quick reminder, the situational based challenges are ones whereby an employee is dissatisfied with their compensation based on workload and/or role/scope creep.  These situations are ones that are often well within the organizations control and typically only affect an individual employee.  These are typically referred to as internal equity compensation issues.  You can link back to this post by clicking here.

Pay Increase 2This post will focus on the 2nd part of this compensation challenge.  That is, when the statement of claim of not being paid enough is one of circumstance.  What I am referring to is when an employee, who might not have felt underpaid before, has started to feel this way due to a particular (specific) circumstance or change in circumstance.  You often see/hear of this when an employee is talking to their peers who work for similar organizations and/or in similar industries.  They get to talking and start to feel that they are underpaid for what they do.  They might even begin to look at online salary surveys, refer to professional organizational surveys or even refer to news articles, regional economic factors, etc.  These type of compensation challenges are commonly referred to as external equity challenges.

The bottom line is that these types of concerns are circumstance driven and require an “apples to apples” comparison and discussion.  When managers and HR Pros get wind of these concerns coming from an employee or employees it requires dialogue and education.  Managers will need the direct support of HR to have these types of conversations.  It is best to hear the employee out first and try and understand what is driving their concerns.  From there you can better game plan the conversation.  It has been my experience that in order to gain an understanding with the employee, the manager and employee have to understand:

1) How the organization determines its compensation structure – were job evaluations done, how were pay bands determined, etc.  Is the issue one of overall job value or is it where & why the individual employee resides in their pay band?  It could even be as simple as letting the employee know that there IS a compensation structure and salaries just weren’t abitrarily determined.  Often this goes a long way in the understanding and resolution of the issue.

2) Why the employee is paid what they are for the job that they do – this is a discussion that focuses more on performance and how that has impacted the employee’s movement in the compensation stucture.  This is a very employee specific conversation that requires the manager to speak candidly about performance.  Often this is a positive conversation if the employee has progressed nicely along their band and resides in the top quartile(s).  They need to “see” that they are being paid at the highest levels.

3) Industry data – the manager and HR need to understand where the compensation data is coming from and how it relates or doesn’t relate to your organization.  Geography is important as many salaries differ simply based on cost of living  The computer programmer you hire in Vancouver will make more than the one you hire in Halifax, Nova Scotia.  Likewise, industry is a big driver.  If you work in healthcare or environmental services, those jobs will often be paid less than ones in the oil and gas industry (for example).

4) The total compensation package – it is also key to look at things beyond pure salary.  A comparative salary difference of $15K might seem like a lot at first; however, if your organization offers flex time, compressed work weeks, professional development assistance, tuition aid, cheap(er) benefits with a retirement plan, an entrepreneurial or innovative work environment and a nice work/life balance, than that might be worth more, comparatively speaking, compared to the $15K more you might get elsewhere but have to work 70 hours a week to earn with the majority of your time spent away from your family.

5) The company’s ability to pay – often people get caught up in just the numbers as it pertains to salaries.  However, you also need to compare same/similar organization sizes and profitability.  Even within same/similar industries, a Fortune 100 company with 25,000 employees typically has a higher ability to pay than does a 50 person company in its 5th year of existence funded by its original founder/owner.  Bottom line, the company’s ability to pay is critical comparative factor when addressing circumstance based compensation challenges.  If the organization is coming off a couple of lean years, then they probably aren’t able to pay top quartile salaries.  As well, an organization has to be able to balance its books and often providing an employee a greater understanding of the organization’s financial position will help in addressing their compensation concerns. Again, the company is trying to rationalize all this against external factors (circumstance) which makes the conversation that much more difficult.

When faced with circumstance driven compensation challenges, I encourage you to have this open dialogue with your employee(s).  Share the facts (as you know them) and make sure to position things appropriately with them.  When comparing apples to apples, it may become apparent (to the employee) that they are in fact paid appropriately.  However, you should also be prepared that when reviewing factors 1-5 above, you still may have an under compensated employee and you should be prepared to address that issue too.

Image courtesy of jscreationzs/FreeDigitalPhotos.net







“I’m not paid enough!” (Part I)

As managers and HR Pros we have all been faced with this statement before. Whether it is a general statement by some staff (i.e. a ‘feeling’) or perhaps it is coming from someone who reports to you that has been stretched too far on an assignment or spread to thin in their current role, it is a situation that must be addressed because it is one of those sore spot issues that festers, causes resentment over time and ultimately leads to disengagement and turnover. So what to do?

First off, you need to determine whether or not the issue is one of situation or circumstance. This post is going to focus on when the issue is one of situation.  The good news when dealing with an issue of situation is that these issues are quite often within the organization’s (manager’s) control to address and resolve.  I will blog about circumstance-based compensation challenges in a post later this week.

Pay Increase 1If you are dealing with a compensation issue based on situation, than your focus needs to be on communication, understanding, coaching and support, with you ultimately getting to the root cause issue. That is, in situation based compensation issues, what your employee is probably saying is that they are not paid enough for what they are being asked to do. Often this is when your employee is doing the work of one or two other people. You often see this is in departments where there has been some turnover and staff haven’t been replaced. The workload is spread out amongst one or two stronger performers who “can handle it.” The weeks and months go by with the work continuing to get done and as the manager you start to think, “hmm, maybe I don’t need to replace/add any staff.” The problem is that this takes its toll on your employees and they start to feel taken advantage of, hence the reason you start to hear the “I am not paid enough” comments.

As the manager, you need to start to work with these employees and get them to see the light at the end of the tunnel. That could come in the form of a commitment to add headcount by a certain date, or take some of the workload off their plate and spread it around to others. At the very least, there needs to be a carrot – whether that is some paid time off (aside from their regularly earned vacation), a bonus or some other monetary reward.  At the end of the day, the compensation issue is coming from the situation that they have been thrust in and/or accepted up to this point.  This is also, primarily, an internal pay equity issue.  That is, it has almost nothing to do with outside factors, hence the reason it is within the organization’s control to address.

A similar issue also arises when it comes to role issues (as opposed to workload).  This is  another example of a situational based compensation complaint.  You see this is in cases where an employee is asked (or allowed) to step outside of their regular role and take on an assignment with greater responsibilities.  They are never given any formal title or compensation increase but the organization benefits from the employee performing in the higher paying position (without paying them to do it.)  It is incumbent on managers and HR staff to not allow these situations to persist long-term.  Again, staff will feel taken advantage of and will begin to resent their company.

You can’t look at this type of situation as “getting a deal” because any short-term salary savings you think you are getting will be gone the minute that employee attains.  Employees don’t have a problem with taking on roles to show what they can do – kind of like a “try before you buy” type of deal. However, once they have proven themselves to you, you need to put your money where your mouth is, organizationally speaking, and do the right thing by officially promoting and compensating them.

Bottom line, as a manager and/or as HR Pros, when you hear an employee or employees state, “I’m not paid enough” AND you can determine it is a situational based complaint/concern, it is well within your control to address things.  Talk to the employee, understand the situation that they have been placed in, take steps to alleviate workload issues and/or to address role enhancement issues.  Keep in mind, left unaddressed, situational based compensation issues are major drivers of disengagement and turnover.  Next post, I will address circumstance based compensation challenges.

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

A pay cheque is NOT enough!

“They get a pay cheque that should be enough.” Unfortunately, this is a direct quote from an Operations Manager I once worked with. In speaking with industry colleagues, I think it has also been uttered in many other organizations! The sad truth is that far too many managers in the business world feel that an organizations sole commitment and required offering to its employees is a pay cheque. Now, that may be in fact true if you are willing to accept high turnover, less than ideal customer service and an inferior product from your employees. You see, the truth is that your employees want and need MORE than just a pay cheque. In fact, the BEST employees are looking for much more.

dollar billsThe pay cheque is like a ticket to the game. Reality is that for employees, the pay cheque is like the base amount that is required to keep them “in the game.” It is what they receive so they can pay their bills, make their mortgage payment, take the odd vacation and get their kids braces when they need them. A pay cheque, assuming it is half ways decent, keeps them returning day over day and week over week to your company. Because they need that pay cheque, will perform at a certain level so as to keep earning the pay cheque from their employer, which in turn they use to keep paying bills, etc.

Here is the thing, you are only going to get so much from your employees if they are only in it for a pay cheque and all you are offering is a pay cheque. Think of the pay cheque as the foundation to a house. Without a good solid foundation, you can have the nicest house on the block, but it isn’t going last. In the same vein, once you have a solid foundation, you can build a nice house that fits your long term needs, one that you will enjoy coming home to everyday, all the while knowing it is laid on top of a solid foundation.

The same goes for your employees. The pay cheque is their foundation and you need to build on top of that foundation so as to sustain the employment relationship. “Well, we offer a great benefits package too, so that plus a pay cheque should be enough!” Yup, heard that one too and the benefits package follows the same theme as the pay cheque. It is foundational in nature and should be used to lay the ground work for a solid employee/employer relationship, not used as icing on the cake. You need to build on the foundation by providing things like:

• Training and development opportunities. T&D is an investment in your employees who are looking to learn and grow in their current (or future) role(s) within your organization. This is one element that links to a higher level of employee engagement and long term sustainability with your ‘human resources.

’Rewards and Recognition. R&R are the next tier of offerings that organizations can provide in order to support and sustain the employee/employer relationship. It starts with developing a culture of recognition and is augmented by an effective rewards program. Rewards are most effective when linked to specific behaviours and performance outcomes you are looking for from your employees. It has been my experience that employees respond very positively to genuine recognition and rewards being given. It helps to drive employee engagement and really helps sustain the connection that employees have with the companies that they work for.

• Salary Reviews/Merit Pay – by committing to your employees to review their salaries on a regular basis AND recognizing them for their performance by increasing it in relation to said performance, you are further augmenting the overall compensation package you are providing to your staff.

• Individual and/or group bonuses – things like individual variable pay plans and group bonuses (i.e. based on a balanced scorecard or department outcomes) will also help solidify employee engagement/discretionary effort.

• Manager/Staff employee relations – the working relationship with their direct supervisor is critical. This can often be the reason for everything falling apart if you don’t have effective supervisors. A positive relationship here, typically one that involves respect, coaching and good communication, can go a long way in retaining your employees. Additionally, great working relationships with co-workers also foster and support the employer/employee relationship. People want to feel good about going to work and who they work with.

• Workplace culture enhancements – these are things like birthday celebrations, staff luncheons, holiday gifts, etc. I place them lower on the list because without the previous items in place, their impact is minimal. However, when used to build upon other compensation and reward items they can have a very positive effect on employee relations and ultimately retention.

The whole point of this exercise of identifying additional items that you can provide to your employees is to show, quite simply, that a pay cheque is not enough. Employees are looking for more from their employers in the employment relationship. In a similar manner, employees are also willing and wanting to GIVE more in the employment relationship. Again, it comes down to employee engagement and performance. In the ever challenging quest to find and retain talent, these are all areas of opportunity at an organization’s disposal to effectively attract, engage and retain said talent, all while providing more than just a pay cheque. As always, I welcome your comments and feedback.

Photo courtesy of jannoon028/FreeDigitalPhotos.net

How to ask for a raise

For many companies, we are fast approaching that time of year when annual reviews are conducted and potential pay raises are considered. Whether your company has a formal process for reviewing salaries or not, if you want to be considered for a pay increase, there are some best practice ways to go about doing this so that your request will be (more) seriously considered. This is not an exercise to be undertaken lightly as you are going to your boss asking for more money.

Pay IncreaseThink about it for a moment – for those of you with kids, what is your response when your kids come forward and unilaterally ask for more allowance? Typically your response goes something like, “No, I don’t have any money to give you more allowance;, why would I give you more allowance, etc.” Even if your child has good responses to your retorts, they have already put you on the defensive and it is pretty hard to get you past no at that point. The same goes when approaching your boss with this request. You need to effectively plan for this request and time it accordingly. Here is a game plan to help you:

1. Do your research – ok, so you feel you are worth more – why? You need to do some research to better understand your job and what it pays in the external market. Make sure you are comparing apples to apples. If you work in an I.T. help desk support job in Halifax, Nova Scotia, don’t compare help desk jobs there to jobs in Vancouver, BC. Likewise, make sure you are also comparing similar size firms and/or firms with similar revenue streams. It also goes without saying to not compare private vs. public sector salaries for same/similar jobs. At the end of day, have your external market research (external equity) done and we able to correlate it to your request.

2. Identify your “pay increase worthy performance” – whether it is in the form of a self-appraisal, or simply a one page snapshot, you need to identify how and where your performance is worthy of a pay increase. Have you achieved stretch goals/targets? Have you saved thousands of dollars with one of your improvement initiatives? Did you spearhead a project that came in early and under budget? Did your creative idea result in a new revenue stream for the company? Were their cuts in your department and you picked up the slack by effectively doing another person’s job? Did your job responsibilities unexpectedly increase during the year and you were still able to meet all of your objectives and KPI’s? These are all the types of areas that you need to focus on and present “the facts” and outcomes to your boss. Remember, data is king and things like being a “hard worker” and “providing excellent service” are what you are currently paid to do.

3. Schedule an effective time – do a bit of homework and find out when your boss is most relaxed and has time to meet – you want their undivided attention. Is he/she an early starter? Than request a meeting in the early A.M. to discuss; or do they stay late after the office has thinned out for the day? Than go ahead and book that 5pm meeting! Don’t request meetings mid-morning, at lunch time or mid-afternoon – those are usually the busiest times for most managers and they are the times when previous meetings run late, or when other meetings (yours) get cancelled.

4. Keep it succinct – once you get your meeting, you shouldn’t need more than 15 mins. to identify why your performance is worthy of a pay increase.  (see point #1).  Get to the point, identify your selling points and then ask for manager to consider your request for a pay increase.  Leave your info. that you developed (from point #1) with your manager so they can review it and perhaps discuss with their boss.  Don’t expect an answer on the spot, but close with a requested/expected follow up date to your request.  If you have a (realistic) number in mind, you should present that number as well.  You need to be careful here and be realistic.  At the end of the day, if your company lost $5M in revenue stream last year and laid off 75 people, you might not want to go in asking for a $25K increase.  This is why you need to have an understanding of the landscape – internally and externally.

5. Above all else, don’t give your manager an ultimatum and don’t overplay your hand. If you truly are valued and are a solid contributor, your manager will know/understand the facts as presented to them. You don’t need to threaten to “go elsewhere.” Additionally, you are best not to make these requests through your HR person. They typically don’t know your performance well enough so you need to make this request to your manager – NOT through your HR rep. Ask HR for advice on how to have these conversations, for copies of previous performance reviews, etc. but this conversation is something you need to do 1:1 with your boss.

There you have it – a five step game plan for asking for a pay increase. I wish you the best of luck and would love to hear from you, whether you were successful or not. As always, I welcome any and all comments and feedback.

Image courtesy of anankkml/FreeDigitalPhotos.net

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