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Tips on Making Your Case For a Raise From the Boss

By Jaclyne Badal

Corporate profits are rising, and unemployment is falling -- so why isn't everyone getting big, fat raises?

Despite classic conditions for salaries to start climbing, it appears this year's average pay increase once again won't keep pace with inflation. It has been a recurring problem in recent years, and something that previously hadn't happened since the early 1990s. This year, salaries for nonexecutive white-collar workers are expected to rise only about 3.6%, according to consulting firm Watson Wyatt Worldwide, but consumer prices are up 4.2% from last May, according to the government.

Complicating matters for working stiffs: Employers increasingly are doling out money based on performance, instead of giving out across-the-board raises that were more common back in the 1990s. This year, for instance, bonuses will account for 11% of payroll, Hewitt estimates, up from only 4% in 1990.

All this is creating wider gaps between the pay-package haves and have-nots. If you want to obtain one of those raises -- or maximize your salary if you are changing jobs or getting promoted -- compensation experts say it is important to develop a focused strategy that will get you there. Of course, the first order of business is doing a first-rate job, but that is just a starting point in the negotiating game.

One important step: As more raises become tied to performance, be sure the boss knows what you have been up to. "You have to promote yourself," says Barbara LaRock, a Reston, Va., career coach. Bosses can't know everything, she says. Employees should keep a diary of accomplishments and talk up the most impressive ones.

One of the quickest ways to try to boost your pay is to get a competing job offer. But playing that card, of course, means you had better be willing to jump ship.

Short of that, the people most likely to get a big boost are the ones most adept at demonstrating that they are adding value or making the company more profitable, experts say. "Everybody can impact the bottom line," says Tim Silvera, senior vice president of human capital at TeleTech Holdings Inc., an Englewood, Colo., outsourcing firm.

One Kitty Dunning, senior vice president at Don Jagoda Associates, Melville, N.Y., landed a 16% raise last fall (her first in two years). To do it, the California-based executive emailed her boss with numbers showing she had increased sales for the firm's promotional services, which include sweepstakes and customer-loyalty programs. For Ms. Dunning, there was no question of whether she should get the raise: "I deserved it," she says. Her boss gave Ms. Dunning the increase she wanted and an extra week of vacation.

Employees can get more creative when making compensation requests this year, because companies are anxious to keep workers happy without raising fixed costs. Ken Abosch of Hewitt encourages people to try for a bigger bonus if they have trouble negotiating a raise, since the budget for bonuses tends to be larger, and it is a one-time payout for the company.

Companies are changing the way they hand out raises amid conflicting corporate goals: Firms feel pressure to keep costs down, because globalization is putting downward pressure on labor costs, but they also realize that as unemployment falls, it is easier than ever for their key talent to get a better offer elsewhere. June's 4.6% unemployment level was the lowest since July 2001.

As a result, top employees are getting rewarded at the expense of others. Hewitt estimates that strong performers can expect salaries to grow 8% to 10% this year. Average performers will get raises of 2.5% to 3.5%, and poor performers will get 2.5% or less, or nothing at all.

Rebecca Elkins, a Dallas human-resource consultant, tells employees to start their campaign for raises well ahead of the sit-down performance review with managers. Raises are generally approved weeks before the boss delivers the news to employees. "By that time, negotiations are pointless," she says.

To help arm people as they seek raises, a broad array of job-search and other Web sites are adding salary calculators and other tools that help people figure out what is a competitive wage in their particular job. However, most of these tools are based on basic services provided by two sites: and .

Workers enter a job title and ZIP code to get an idea of how much others in the area are making for similar work. asks more detailed questions before providing an estimate, factoring in years of experience and some of the skills required for the job. For instance, is mathematics involved, or do workers have to follow detailed instructions?

Both sites estimate bonuses and benefits, but will chart the numbers to make them easier to understand. also will estimate state and federal withholdings, so workers interested in changing jobs can get an idea of what take-home pay will be. Customized data factoring in experience, education, company size and industry can be purchased from the two sites for prices starting at $29.

Other sites, including the Labor Department's site at , offer a mother lode of data that can help you understand whether -- and to what extent -- you are underpaid. It also can give you a sense of whether your salary demands are reasonable. The Labor Department publishes the average and median wage for hundreds of jobs ranging from school-bus driver to nuclear technician.

However, it pays to use the data carefully. Methodology varies widely among sites: For instance, the government's numbers are considered conservative, because they are generally one to three years old and salaries max out at $70 per hour for the Occupational Employment Statistics. The salary cap can drag down the average for higher paying jobs, such as chief executive or financial manager. Conversely, salaries self-reported by employees often are thought to be inflated.

Plenty of the old rules still apply, of course, such as trying to see things from the perspective of your boss. Employees will have more luck negotiating a raise if they are mindful of the demands facing their superiors, says career coach Karen Armon. Think of it this way: "You are here to make your boss successful, not yourself," Ms. Armon says.

When Gary Davider, vice president of sales and marketing at Import Stone Inc., Panorama City, Calif., asks for a raise, he says he explains how he plans to make more money for the company, too.

If he wants a raise in January, Mr. Davider says he will make a spreadsheet for his boss in September that shows his sales to date and his projections for the coming year. Then he asks for a raise that will compensate him for the extra work. Mr. Davider says he expects sales to increase 40% to 60% over the next 18 months, but he hasn't yet decided how big a raise to seek for next year.

He boosted his salary 30% when he joined Import Stone from a rival.

To set his expectations, Mr. Davider says he looks at salary calculators online -- his favorite is The site, which takes data primarily from compensation-consulting firms, overhauled its calculator last year. Users can sign up for automatic emails that provide updated wage averages.

Amid all the increased emphasis on selling your achievements to the boss, Ann Watson, managing director of human resources at Russell Investment Group, a Tacoma, Wash., financial-strategy firm, offers one caveat: Don't exaggerate. She says she is most annoyed by employees who overstate their accomplishments and try to get big benefits without doing the work. "The best way to get a great raise is to do a great job," Ms. Watson says.

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Article from CareerJournal Online May 2007