Kris, one of my longtime, loyal, highly valued employees came to me recently and asked for a raise. He brought up many valid points about why he deserved to make more money; he was always on time, never missed a day a work, our customers love him and he hadn’t had a raise in three years. I agreed with all his points, but still denied the raise.
My greatest fear was that he would quit. And I’d be sad if that happened. I’d miss him. I did something few employers do. I opened the books to Kris. I sat down with him and showed him where the company money goes in hopes he would understand why I couldn’t give him a raise. In this instance that was a fairly easy thing to do because this company makes very little profit. [Even though it is a for-profit company, I so believe in its mission that I run it like a non-profit, with the goal of a break-even bottom line.] The danger of doing this is it had the potential to make Kris think we might go out of business and his income could be in jeopardy.
Conversely, a highly profitable company that opens its books to employees runs the risk of angering its workers. Employees may see high profits not as a healthy company but as greed on the owner’s part; profits made on the backs of the employees. They could see it as a justification to expect a raise or induce anger toward the owner for not sharing those profits.
Whether the company is highly profitable or barely getting by, opening the books for the employees to see, no matter how well explained, has pros and cons.
How to ask for a Raise
Forbes magazine suggests that people research their market to determine what the average pay is for the job they do. When you ask for a raise, ask for a specific number in lieu of asking generically for “a raise.” You must also explain why you deserve a raise.
As important as knowing what to do is knowing what not to do when asking a boss for more money. Consider these seven points of what NOT to do or say:
Timing is everything. If you know the company is struggling to make a profit, don’t ask then. If you know the company is flush with cash, this may be the time to ask. However, even if the company is healthy now, consider where it’s been like in recent years. If it’s just coming out of a recession, it may be paying off debt accumulated during the lean days. Asking for a raise now may not get you a raise now but it will plant the seed in the boss’ mind for the next time raises can be offered.
“I’m doing the work of three people.” If the company has been through lean times and there was a hiring freeze or a reduction-in-force, chances are everyone left is doing the job of three people. Unless your boss is new to the company, he or she already knows this fact. Saying it makes you sound like you’re whining. That’s not the attitude you want to portray when asking for a raise. Or any other time, actually.
The only people who get raises for “time in grade” are government employees [and I don’t know if they even get them anymore.] Said another way, don’t expect or demand a raise just because you’ve been there for 90 days, 1 year or even 5 years. Just showing up for work does not justify getting paid more for doing the work.
This might surprise you; doing your job doesn’t warrant a raise. When you are hired to do a job and agree to do that job for an agreed upon amount of money, you’ll need to do that job better/more efficiently or take on additional tasks to expect a raise. You’ll also need to be able to articulate how you do it better or what additional tasks you’ve taken on.
Don’t make your personal problems your boss’ problems. If your car broke down and you need a new one, that doesn’t justify a raise. If your landlord raised your rent and you need a raise to pay the additional rent, that doesn’t justify a raise. If you spent too much on your credit cards and need a raise to pay your debt, that doesn’t justify a raise.
Don’t compare your pay with another employee’s pay. That makes you seem like Nosey Rosy. Besides that, even if you think you are just as good as “Bob”, you may not be. Perhaps Bob is more educated than you. Perhaps Bob came to the job with more experience. Perhaps Bob has more breadth of capabilities, even if they aren’t being exercised right now. Or maybe Bob just negotiated better when he was first hired. It really doesn’t matter. This discussion is about you, your work and your pay. Not about Bob.
Only threaten to quit if you’re prepared to walk out that day. This tactics erodes trust faster than any other faux pas. In this scenario, when the boss says he can’t give you a raise he expects you to start a new job hunt which means he needs to start looking for your replacement.
Even if you deserve a raise, you may not get one.
Even if you do everything right when asking for a raise, even if everything you say to justify your raise is accurate, even if the boss wants to give you a raise, you may still be denied a raise. This was the case with Kris.
Employees are not paid what the employee is worth. Employees are paid what the job is worth. That’s a critical distinction.
I would love to pay all of my employees more money. If I did, I’d have to charge customers more for our services. This would likely cause us to lose customers which would reduce the number of people needed to do the job. That would result in a reduction-in-force or less work for every hourly employee. Given I think all of my employees are as great as Kris, I would hate to lose any of them. Even more, I would hate to put any of them out of work.
If you ask for a raise and your boss says “no,” don’t take it personally. You aren’t paid what you are worth; you’re paid what the job is worth.
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