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CHICAGO — Have you ever gotten up in the morning fighting with yourself over how you or your team could receive additional compensation for your work? Or maybe your team is threatening to go elsewhere and you are caught in the middle.
All parties involved in salary negotiation—asking for a salary increase, a pay raise, or simply more money—are affected, and www.businessballs.com, a free ethical and learning development resource run by Alan Chapman, Leicester, England, has some tips for handling such negotiation positively and constructively.
It’s important to encourage a mature, objective, emotionally level approach, Businessballs says. When people handle difficult negotiations poorly, stress, frustration and ill feelings can result. By encouraging people to adopt a constructive approach, you will help minimize the upset and achieve a positive outcome.
People aren’t trained to ask for raises, and little is written about the topic. There is no standard way to seek a salary increase, the site says, so the approaches vary. Some people write their request for their boss, or discuss it with them informally. Others discuss it with colleagues, hoping the conversation somehow reaches the boss. More subdued workers may drop hints or ask politely, while the headstrong may demand firmly, go over the boss’ head, threaten to find another job, or even resign.
The latter happens more often than not. It’s called “I’ll show you,” but be careful. However, if you and your team are really good at your jobs, and your jobs are unique, I imagine that your expertise is highly sought after.
Largely, people do not look before they leap, Businessballs says. They feel uncomfortable and stressed to be asking, so they fail to plan and control the situation, which makes achieving anything difficult.
Understanding market rates can help employers or employees assess their situation objectively, the site suggests. I think that sometimes you can evaluate the status quo of your organization and draw from that data. If Team X makes Y dollars, then how do you compare in areas of importance, growth in revenue, risk assessments, liabilities, etc.?
Industry averages are just a guide because situations and conditions vary, according to Businessballs, but it's generally better to have some external perspective than to approach pay and earnings issues in complete isolation. If Company Z’s staffers make a certain wage and your situation is similar to theirs, then draw a comparison, but do so carefully.
It is important to educate decision makers regarding salary adjustments and to inform these managers about the importance of you and your team’s position to the organization. Sometimes you just need to spell out the facts and educate those responsible for supporting such benefits.
Submitting a well-planned request and citing comparative data may not secure an immediate salary increase, Businessballs says, but these ideas will eventually bring a better reward and outcome than doing nothing, or doing something in a negative fashion.
As a manager receiving a request for a salary increase, respond fairly, sensitively and openly, the site suggests. Only make promises you can be sure to deliver, and try to understand each person’s needs and feelings before explaining the company’s position.
I recommend that you be prepared to answer issues regarding expenditures elsewhere, other teams’ salary base, etc. Sometimes you need to paint a clear, black-and-white picture, outlining from a fiscal perspective what could be done to compensate, i.e. reduce here and add there from an organizational perspective. This is especially true if the workload has grown substantially over a short period of time.
Businessballs believes it is important to recognize the difference between the value of the role that you perform (or the employee’s role), and your team’s value (or the employee’s value).
If you are continually frustrated about your compensation despite having tried techniques to obtain a pay raise, it is possible that your boss has simply reached the limit of the value that he can place on your role, the site explains. Your potential could be of high value, but if your role does not enable you to perform to your full extent, your reward will be suppressed. For example, in our industry, does a laundry manager who sorts linen deserve a soil sorter’s salary or a laundry manager’s salary?
Market forces (notably the cost of replacing an employee) and the employee’s contribution to an organization’s performance (particularly for roles directly impacting profitability) dictate salary levels. By acknowledging this principle, you begin to take control of your earnings, Businessballs says.
If the gap between your expectations and your employer’s salary limit is too great to bridge, look to find or develop a role that commands a higher value, and therefore salary, the site suggests. You could agree to take on wider responsibilities and opportunities to contribute to organizational performance and profit, either with your current employer or a new company.
Despite these constructive ways to approach salary negotiation and techniques to achieve positive outcomes, many organizations have cut back expenses, reduced travel, instituted wage freezes and laid off personnel. If you find yourself negotiating in this situation in these tough economic times, ask for nonmonetary incentives and/or perks that will relieve some of the pressure.
Developing and communicating your value to your employer and to the marketplace should be the focus. But remember that when trying to convince management of your raise-worthy status, sometimes one eye is open while the other is closed so education and communication are the keys.
Portions © Alan Chapman/Businessballs 1995-2010 and used with permission. Retrieved from www.businessballs.com. Full source material at www.businessballs.com/payrise.htm. Not to be sold or published. Alan Chapman/the author(s)/Businessballs accepts no liability for any issues arising.