Tis the season for performance review meetings as we close out one year and move full steam ahead into the next. If you’re like most, you probably have an expectation of what you hope to hear in these meetings. Perhaps it’s a bonus target number, merit increase amount or simply some appreciation shown or a specific call-out for a project or job well done. Although you may feel confident in your work, others may need a reminder, or a simple nudge, to align on your expectations. In fact, negotiating in the workplace is a known skill that’s very important to learn and implement early on to achieve what you feel you deserve.
If you feel anxious just thinking about this type of conversation, you’re not alone. According to one study,(1) 57% of respondents said they have never asked for a pay raise. 28% of these people said it was because they feel uncomfortable negotiating salary, and 19% claim they didn’t want to be perceived as pushy. Furthermore, there is a noticeable difference between gender and negotiating their salaries: only 7% of women claim to negotiate their salaries compared to 57% of men. To put it into perspective, a $4,000 negotiation to get a $50,000 starting salary up to $54,000 translates to $114,706 more earnings over 20 years of employment (assuming an annual cost-of-living increase of 3% each year). So, what may seem like an awkward conversation now could actually be a missed opportunity for your financial future. Luckily there are a few tips-and-tricks you can do to prepare for this conversation. After all, to be your best self you need to prepare. The same is true with negotiating.
Here are 5 steps to get your game plan ready to go:
- Set Your Expectation. Before you can negotiate, you need to manage expectations with yourself. Of course we’d all like a 50% raise every year, but that’s very unrealistic. Instead, consider mapping out your expectation with the 3 W’s (taken from the book Fearless Negotiating, by Michael Donaldson)(2): what is your ultimate wish, what would you still want and what would you walk away from? For example, your wish may be a 5% raise, you’d still want a 2.5% raise and you’d walk away from anything less. This approach helps keep that “heat of the moment” emotion in check, so you can be prepared for the conversation, and its outcome.
- Do Your Research. Now that you know what you want, it’s time to make a case for it. It’s important to equip yourself with market and industry stats. For example, what has been the average pay increase in the market the last 5 years? What about for your specific industry? Or your position? How does this compare to the competition? Of course your specific position and company will drive what type of information you have gathered, but having a couple of these types of data points in your back pocket will help make your case (and show you know your stuff!).
- Have Your Proof Points Ready. Next, it’s time to have your personal proof points ready. This isn’t a 10-page document outlining every task you’ve completed the last year. Rather, it’s a couple highlights that prove you deserve what you’re asking for. You may have exceeded your goal. Or overcome a specific obstacle. Or fostered cross-functional team collaboration. Be sure to have a few specific examples in mind to remind your team of your accomplishments. Remember, nobody knows your work better than you, so it’s your responsibility to concisely reiterate what you do so well.
- Write it Down. Don’t be afraid to bring notes into your meeting. This is better than wishing you could remember something. In fact, it’s better to show you prepared and that you take this conversation seriously, rather than lightly. In fact, why not dress up a bit for the meeting to show your professionalism too (again, dependent on job, company, etc).
- Schedule It. Some companies have organized performance review meetings and others do not. In any case, ensure you have a set time to have the conversation. This is your job and your future, so it shouldn’t be a quick hallway conversation or done over email. If you need to be the one to set it up with your manager, do it.
Now that you’re prepared and confident, here are 5 steps to have the conversation:
- Be Upfront. Nobody can read your mind, so if it’s a 5% raise you’re hoping for, then bring it up with your manager. Explain why you feel deserving of that raise, how you came up with your number and be ready to discuss further. Luckily, you have many proof points and examples already together from your preparation work.
- Understand the Feedback. Best-case scenario is you get what you wish for, but chances are you will need to negotiate. No matter what the end result is, it’s important to fully understand the feedback. After all, the raise you get is a reflection of the work you do, so be sure to get feedback on what you do well, what you can work on and any other opportunities for your professional growth. Everyone can be working on something (nobody is perfect), so make sure you get this perspective during the conversation.
- Explore Other Solutions. Although you may not get the number you wished for, or even your bare minimum, there may be other solutions that are available. If a pay raise isn’t available, are there other forms of compensation available? Some companies may get creative with stock options, retirement contributions or even a one-time bonus, so have an open mind if the direct response to your proposal is a no.
- Be Professional. No matter how the conversation goes, it’s important to always act professional. Negotiating a raise is a very emotional topic and can be awkward for the people in the room. Be sure to rise above any awkward moments and be true to your values (and your original expectations).
- Don’t Delay. You are in the driver’s seat when it comes to your salary negotiations. Don’t put off the conversation for next year. Instead, do your preparation and bring up what you feel you deserve. The feedback could surprise you!
Negotiating is a skill that can really pay off. Take your future into your own hands by managing your performance review. After all, if you don’t ask… you may never know the answer.