For many knowledge workers the annual pay review is the best time to negotiate higher pay. Of course, special circumstances may make it possible to bring the event forward. Don’t be shy about seizing these opportunities – they are not common.
Naturally any major change to your work is a chance to renegotiate your terms of employment. Another potential trigger is the successful completion of a major project; perhaps you closed a major deal or successfully launched a new product. The opportunity can arise because of a seismic shift in your industry or the actions of a competitor.
Though you shouldn’t shy away from any opportunity to ratchet up your income you should remember that, as a general rule of thumb, if you manage to win a pay rise outside of the normal assessment cycle you couldn’t expect much of a further rise when the scheduled formal process comes around. While that isn’t going to worry you too much if you’ve already banked a few months’ worth of higher earnings, you might feel a pang of regret when your colleagues get reassessed and you don’t.
There’s a mistaken idea that a good performance during a pay review will win you a higher salary. It won’t. The battle has already been won or lost before you step it starts. At best, you have the prospect of snatching defeat from the jaws of victory. Preparation is the real key to getting the best result. The time to start is now.
Your first task is to find out what your specific skills are worth on the open market. We looked at this earlier.
The name of the game is benchmarking. You need to establish the benchmark. Documentary evidence that other employers would be willing to pay more for you skills than your existing employer is hard to argue with.
Don’t be too specific about which employers are willing to pay you personally. Clued-up managers won’t negotiate if you create the impression that you are thinking about moving to another company. Nor will any sensible manager negotiate under duress.
Your second preparation task is to find the exact performance criteria you are judged on. In well-organised companies these are written down. If you don’t have a written copy, ask your immediate manager what he or she is looking for.
Once you have a copy of the performance criteria, turn them into a checklist. Use this as your guide during the year. Make a point of ticking off each criterion in turn. The best strategy is to over-deliver on all the listed criteria so there’s no argument that you delivered. Always try to go to the next level. For example, if the performance criterion asks for a five percent productivity increase, push for ten percent.
At the same time you should find out what other specific qualities your immediate boss values. Make a point of observing what he or she likes and dislikes. Concentrate on displaying the positive attributes whether they are skills, abilities or work habits. For example, some bosses like their managers only to tell them about problems after they are solved. Commitment impresses others.
It’s a good idea to quantify as much of your performance information as possible in raw financial terms. You might like to jot the highlights down in a notebook. Then when a particular project is mentioned during the assessment you can pull out the notebook and say “since I took over the department our monthly sales have risen to $700,000 while costs have fallen by 10 percent.”
The third part of preparation is the least understood. Basically, you need to put a wider context on the process. If the company is doing well you can press for a higher bonus. On the other hand in times of low inflation pushing for a large percentage rise might not look good. If the company is in trouble, prepare for a disappointment.