Behind-the-curtain insight into how compensation works
I fully believe that there are some dark-souled, horrible bosses out there that actually want to ruin your life and underpay you, but I’m guessing there aren’t very many.
So why is your life miserable and your bank account empty?
I probably can’t answer that for you, but I can shed some light on how I’ve seen compensation work.
Who actually gets raises?
There are probably lots of tricks (nepotism) and edge cases (money for everyone!), but the most common reason a company gives you a raise is because you provide value. And more importantly, you provide more value.
Why aren’t you getting a raise?
There are also lots of reasons why, despite providing more value, your company doesn’t give you a raise:
They don’t have money
They don’t know they underpay you (not literally “don’t know your salary,” more don’t understand the cost of not having you)
They have other labor options
They have salary practices/benchmarks that work against you as an individual but are valuable for the company
You don’t deserve a raise
These are just some ideas as to why you’re not getting a raise. A lot of them have less to do with you and lots to do with things that are hard to control.
Does my boss want to give me a raise?
This is a tough one. If you go in guns blazing ready to fight your boss for a raise, you’re definitely doing it wrong. Depending on where you work, it’s entirely possible that your boss doesn’t even have the authority to give you a raise. It’s also possible your boss is trying to figure out how to get a raise of her own.
I would say that, generally, if you are good at your job, your boss would love to compensate you well (exception being the soul-sucking monsters mentioned in sentence 1). Try to remember that.
Why do some people get paid more than others?
This could quickly fall into an ethical debate about the value of individual labor, but I’m going to avoid that for now. You should be aware that there are lots of factors, some which feel fair and some that clearly aren’t fair.
Ignoring some of the most biased practices (only for the sake of this article), a lot of compensation boils down to circumstance and timing.
Having a well thought out approach to compensation is actually hard to do, so it makes sense that lots of companies do it poorly. I’ve run teams with absolutely no experience in compensation and had to figure out the best way to pay my people fairly within the limitations of budget and knowledge.
Did I get it perfectly right? Hell no. I would even say I got it wrong in places, which is rough, seeing as this is the most important thing to most of the people I manage.
Some of the common ways that compensation forks:
Performance
Responsibility
Tenure
Attitude
When a person joined the organization
Market factors (going rate at the time of hire, prior compensation)
Salary negotiation (they asked for more and won)
Someone’s path into a position (starting in a higher/lower department and moving)
Business needs (mission critical to get someone in the door)
How should I ask my boss for a raise?
Are you good at your job? If not, read this article about how to talk to your boss about performance. If yes, some ideas below!
Asking for a raise is really hard, mostly because you’re dealing with at least two people (you and your boss) who have their own motivations, stressors, and emotions. There isn’t a script that is going to get you through it. Understand that. That doesn’t mean there aren’t ways to go about it that are better than others.
Do your homework:
Companies have policies and practices that dictate their approach to compensation. For example, I’ve worked for companies that literally only give raises one time a year. Knowing this can help you plan accordingly and not put your boss in a lose-lose situation.
Leave your personal needs aside:
I’ve had someone ask me for a raise because her rent was expensive and she was struggling to pay the bills. This was rough.
As a human, I don’t want to watch others suffer. As a manager, I can’t pay people more just because they have higher expenses.
Approaching the conversation with this as the central point puts your manager in a tough spot. It also isn’t the reason why people get raises.
Be confident:
If you don’t believe you’re worth the raise, it’s going to be very challenging to convince others. Telling you this isn’t going to change how you view yourself overnight, but work on your confidence. It’s critical to your raise conversation success and so many other things in your life.
Be direct and reasonable:
Make sure what you want is clear so there is no mistaking the request. Don’t say “growth” when you mean “more money, no change in job function.” Don’t ask for 5k if you know you’ll only be happy with 20k.
Give you, and your boss, time:
This is, in my opinion, a really elegant way to approach the topic of increased compensation. It invites your boss into the process, making them your de-facto advocate, and it also removes a lot of the stress.
Too often, people want to ask for more money in the end of year review conversations, and the reality is that raise decisions were already made and it’s now a stressful battle.
Instead, start early. Below is an idea of some of the key talking points:
“I want to start the conversation around my career and compensation growth, so that I can have a good plan for the upcoming year.”
“I’m currently making 40k/year on target, and I’d like to work towards 50k/year.”
“Do you think this is realistic?”
“I know there is [limited resources for raises/comp changes once a year], so I wanted to get your take on how I can be at the top of the list for a salary increase.”
“What have you seen be successful in getting an increase?”
“How can I provide more value so that it becomes a no-brainer?”
Have a reasonable conversation. Treat your boss as a stakeholder in the process. Make sure you follow up on this and also make sure you hold up your end of the bargain.
If I don’t ask for it, can I still get a raise?
Yes. I have given many people unsolicited raises and opportunities. Your company and your manager are incentivized independent of you to keep great people and keep them happy. This means that simply doing good work is sometimes enough to get a raise. I would still recommend asking for it when appropriate as that increases your likelihood of getting it.
Should I ask for a raise?
I’ve noticed a trend in the career empowerment space to give a blanket “YES” to this question, but I’m not really in agreement.
Sometimes you should ask for a raise, and sometimes you should do your job.
Take some time to write down why you deserve a raise. This is great practice for when you have to justify yourself to your boss, and it is also a moment for you to get real with yourself. If you were the sole owner of the business, would giving you a raise make business sense? Why?
Should I walk if they don’t give me a raise?
There isn’t a right or wrong answer to this, so I would go with maybe. It can be pretty challenging to get a new job, so assess whether this option is really on the table. Also, compensation is only one part of your overall work happiness, so you could end up trading dollars for worse benefits or a mean boss.
That being said, the best way to make more money for the thing you already do is to move companies. So take a look.
What you should definitely never do is stay and be miserable. Not only is that a bad outcome for you, it also puts you at risk of being fired if it impacts your work quality and attitude.
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