By Erika Engle The Honolulu Star-Advertiser.
Q&A With Ludvig Simonsen, Regional human resources manager, Pacific region, Mandara Spa
Question: Microsoft CEO Satya Nadella came under fire last year for discouraging women from asking for raises, encouraging them instead to have "faith that the system will actually give you the right raises as you go along." He then distanced himself from the comment, explaining that he had been "inarticulate." Whether you are a woman or a man, what is the best way to ask for a pay raise?
Answer: The reality remains that pay raises are hard to come by, regardless of a person's gender. Although economic conditions have improved on a global scale since the recession of 2008 to 2009, employers continue to be conservative with regard to financial compensation.
Before even approaching the subject of a base pay increase, I would encourage the individual to take stock of their total compensation package. Employees may overlook many aspects of their compensation which are forgotten about because these benefits are not seen in direct dollars on the paycheck. For example, does your employer pay a portion of family medical coverage, have matching 401(k) contributions or pay the cost of your parking?
Most people feel that they should be paid more than what they actually earn, but in order to effectively negotiate an increase in your base pay, you definitely must do research, understand the criteria of the company's decision makers and take into account the timing of your request. If you simply state, "I deserve a raise," you are not going to be effective. Employers hear this quite frequently. Also, depending on the nature of your position, there may be little flexibility in how an employer determines wages for each individual employee.
In a collective bargaining situation, wages may be set for a specific position. Alternatively, the employer may have a fixed wage for the specific position and cannot arbitrarily increase a pay rate for one employee while not adjusting the rates of pay for others.
While I do not mean to discourage anyone from making an attempt at earning more money for their work, the better approach might be to explore which additional skills one could acquire or which additional responsibilities one could take on in order for the employer to justify a change in compensation. Gone are the days for asking the boss for more money in exchange for doing the same job you were doing just before the raise, but all hope is not lost.
Q: How can someone best organize their thoughts, facts and figures to back up their request for a pay increase?
A: You must have an effective strategy on how to best communicate with the decision makers within your organization. It is critical to see the situation from both sides of the equation. Barging into the boss's office without an appointment to ask for more money will surely not be effective.
Take a look at your request from the standpoint of your employer. It should not be an argument of "I deserve more," but rather a clear articulation of how your skill set and knowledge have positively impacted their bottom line. You may have recent examples of how a project for which you were responsible positively impacted the long-term success of the organization, or perhaps you have taken on additional responsibilities over the past year when multiple jobs were morphed into one role.
Since the recession it is commonplace for many employers to be doing more with less in terms of their employees. This means that employers have become much more selective about who they hire based on their expansive skill set. It is becoming more and more common for employers to ask their teams to take on multiple responsibilities, sometime across departmental lines.
When asking your employer for a pay raise, you are essentially having to convince your employer how more money paid to you will impact the overall health of the company. It would be incredibly helpful if you came prepared with a game plan that is tied to your organization's strategic objectives and how your role impacts these objectives. At the same time, your organization's financial picture must be a healthy one in order to justify additional expenditures. If your organization has been recently impacted by layoffs, it's not the right time. If your organization just announced record-breaking profits, then perhaps that timing would be better. As much as possible, know your organization's financials and how your role has a positive impact in that arena. Go into the discussion with a clear method of communicating that you are willing to take on more to earn more.
Q: How does a person find out how much is paid to others in similar positions within the same industry?
A: There are a multitude of compensation surveys out there, depending on the industry and position. A quick online search will point you in many directions. If you work in a role that is very common within your organization, you may already have a feel for how compensation is tied to the position. Be cautious about respecting and abiding by any wage confidentiality policies or agreements you may have signed with your employer.
Q: What if the boss says no? How should a person respond?
A: I am not trying to sound pessimistic, but the boss may very well say no the first, second or third time you broach this subject. It may take several years for you to gain additional knowledge, skills and abilities that can in turn affect your rate of pay with your employer. If you feel that your employer is not receptive to paying you what you feel you should be earning, then perhaps it is time for you to begin a job search outside of your company. Sometimes the process of interviewing with other potential employers can help you better assess what your level of compensation should be. On the flip side, this may also show you that your current situation isn't as bad as once perceived. If your boss says no today, the position may change in the future, so do not lose hope.