Fair pay is an issue that affects employees in all industries; it is one of the main reasons why individuals consider leaving their current job. Half of UK employees in 2020 were considering an alternative job: a ‘job exodus survey’ by Investors in People found that 30% of employees cited pay as the top reason for wanting to move jobs, with 23% stating not ‘feeling valued’ as another factor.
Pay is often linked very closely to workers feeling valued by their employers; there is no doubt that a higher, fairer pay band motivates employees to work more efficiently, effectively, and provide greater value to the business.
In this article we are going to provide five key steps on how to negotiate a pay rise.
In 2021 the Office for National Statistics found that growth in average total pay (including bonuses) among employees for the three months November 2020 to January 2021 increased by 4.8%; they also suggested an underlying wage growth of around 3% for total pay and 2.5% for regular pay. It may be surprising to see statistics showing pay rise during furlough period of the Covid pandemic, however, job markets have seen great fluctuation in the types and quantities of jobs that have risen and fallen. This fluctuation has affected compensation.
Also, there is strong evidence in particular industries that annual pay has risen, in particular the Engineer reported a 10% increase in salary pay during the last twelve months.
To put these numbers in perspective: if you are considering requesting a promotion, or initiating salary negotiations for a pay rise, the pandemic need not necessarily halt your plans.
Step 1: Know your Company Appraisal System
As in all matters regarding employment, research, research, research is the starting point: before you formally, (or even informally) attempt to raise this matter with your Manager, it is important that you collate all relevant data regarding your jobs value in the market.
The parameters of your research should be set by your company appraisal system.
An appraisal is a yearly, or biannual meeting in which your employer discusses your work performance; they are often used to consider which targets have been achieved, and decide on future work commitments.
Performance appraisals have been defined in varying ways by academics, one such definition is: “Performance appraisal is systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development”.- Dale S. Beach
An additional reason for appraisals is to discuss career plans. In some cases, they may include bonuses and pay increments. There is no legal requirement to carry out appraisals, however, many companies do follow this practice.
It is important to understand that annual appraisals vary from company to company, the manner in which they measure performance and competency also vary; best practice is to have regular, interim appraisals before the ‘major’ 6-month, or annual meetings.
Whichever method your particular company follows in conducting these meetings, you should fully familiarise yourself with the metric and criteria against which they are grading you. Employee handbooks are a useful tool to find such information. The company website can also hold such information, usually on the Human Resources page.
In practice, often Managers provide an appraisal form which the employee fills out before their one-to-one meeting; in the meeting they discuss their performance in line with the criteria, and the Manager gives them feedback, or an overall score.
Keeping copies of past appraisals can be very handy when assessing your past work performance- in Step 3 below we expand further on this point.
Step 2: Research your Job Market Value
Researching job value in your local market has become easier with the advent of several analytical tools available online. In particular, the following can be utilised:
- PayScale: PayScale provides transparent, and validated salary data, regarding current salary levels for a particular job title/position/or market area; featured in G2 Crowd’s 100 Best Software Companies for 2018, based on user reviews; with more than 8,000 customers from small businesses to Fortune 500 companies. It has an advanced salary research tool based on a range of factors, such as Job title, Certification, Degree, Employer, etc.
- Cost: Free
- Pros: Very detailed, and thorough system of collating and comparing a vast body of data;
- Cons: Seems to be heavily focused on US-specific data, so not applicable to everyone.
- Glassdoor Know Your Worth: Similar to PayScale, its survey is based on researched data that gives you an estimate of your job market value; explores a range of factors such as number of years in employment, qualifications, etc..
- Cost: Free
- Pros: Quick, and easy to access
- Cons: Only an estimate, so will need to analyse the results carefully.
- Salary. com: Another job compensation evaluation tool, uses similar metrics to the above two to compare a database of information to your current job level.
- Cost: Free
- Pros: Easy to access, comprehensive features;
- Cons: US-centric, although this limits access to employees outside of the US market, this tool does provide a robust, and detailed analysis.
Step 3: Gather Performance Evidence
Based on your previous appraisals, or work performance begin by gathering evidence of exemplary performance. If you do have annual appraisals, refer back to any glowing commendations written by your supervisor, and build a detailed report of your key achievements in the past few years.
Draw comparisons from the job market value research you conducted above, see which points and factors for a higher pay range intersect with your current duties (e.g. are you managing a team of employees? or have you been in work for over 20+ years?); jot down differences and similarities and arrive at a fair base negotiation rate based on the results.
Finally, rehearse the information in your mind, and approach your employer.
Step 4: Request a Meeting
There are various ways you can approach your employer, ideally it could be done during your company’s annual staff appraisal meeting, however if this is not the norm, the following is a general template:
- Raise the issue verbally: give your manager notice before you write a formal email requesting an appraisal meeting, this allows them time to consider your request before it is pushed into official channels;
- Write a polite, comprehensive request email: this should be structured, language is key, the following is an example: ‘Hello Mark (manager), Following up on last week’s discussion regarding an appraisal meeting to assess my previous, and current work performance, I would be grateful if we could schedule a meeting in the following fortnight.’
- Timing: Do not raise the issue of an appraisal meeting when your manager is working on a major project/bid; it is imperative that you avoid the busy periods of your company, and time your request tactfully;
- Negotiation: Bear in mind your research, current job market value analysis, and particular strengths when you have your appraisal meeting; negotiate in a thoughtful, strategic, and calm manner, putting forward your case in the best way possible.
- Follow-up email: Regardless of the outcome, make sure you verbally thank your manager for the appraisal meeting, follow this up with an email, here is an example: ‘Hello Mark, Thank you for taking the time out to conduct my appraisal meeting, it was very informative, and helps me as an employee understand how to optimise my performance for the future. Regards, Tom.’
- If at first you don’t succeed…: Try, try, and try again- being refused a pay rise can negatively affect your confidence levels, or resolve to request for future appraisals; do not let this deter you. Look objectively at the issues raised by your employer when refusing, and aim to work on them in order to place yourself in a better position to succeed in obtaining a pay rise the following year.
Step 5: Avoid the Do-Nots!
- Do not skip research: when researching, it is important to go into as much detail as possible when exploring your local job market, and your current options- look at competitor pay rates for the same job position.
- Do not overlook your strengths: compile a list of achievements and go into in-depth detail regarding your performance during your employment; be honest, be objective, and fair.
- Do not lose your temper: Relationships between employees and managers can be tricky, there may be times when you feel offended, hurt, or upset by your manager’s conduct; however, when raising the issue of a pay rise, it is vital that you remain calm, argue your position from a civil, and objective standpoint, and not allow the discussion to become personal.
Finally: believe in it; present your case as a natural conclusion, a progression that was inevitable – the more you become better at your job, the more value you add to the business, and the more your compensation increases. A work life-cycle that cannot be challenged.