Dear Evil HR Lady,
For the past 10 years, I've been an IT Program Manager at a Fortune 100 company. In my last annual performance appraisal, in March 2009, my manager gave me the top performance rating and advised me that I was the only person in our group to receive that rating. He said he would probably recommend something in the 3-4 percent range. Then, a week later, my company froze salaries and recognition programs for all employees.
A year later, the company has announced that salary planning will resume and that any actions will take place in April 2010. I fully expect to be given the same performance appraisal as I was in March 2009. I have researched salaries and believe I should receive a 6 percent increase but would accept a 4 percent raise. How do I approach my boss about this?
The budget for increases is going to be handed down from on high. Don't ask how they determine what it will be -- it's complex and fraught with politics, and once it is decreed, it is decreed. Unless your boss reports to the CFO or the senior vice president of HR, he or she will have absolutely no say in how much will be allotted.
I don't know which Fortune 100 company you work for, but the fact that the firm was concerned enough to not give increases last year indicates that increases are going to be small this year. How small? Some places are predicting no more than 2 percent. The number I will now pull out of the air is 2.5 percent. I would be surprised if it was much higher than that, but wouldn't be shocked if it was lower.
Let's also assume that your co-workers are all in similar roles with similar salaries. For the ease of math, let's say that there are 5 of you, each making $100,000 a year. So for 2.5 percent raises, that would mean your boss has to work with a budget of $12,500.
Now, we'll assume your boss gives you a 6 percent increase ($6,000) because you're a top performer, leaving $6,500 for your four co-workers. Which means they each receive $1,625 per person, or 1.62percent. Your co-workers all know that the budget is 2.5 percent, so they will all be ticked to be so far below the average. While their ratings aren't as spectacular as yours, let's assume they are good. So they will all storm into your boss's office and demand an explanation as to why their raises stink. Your boss, being a good boss, won't point to you and say, "I gave it all to Bill!" He'll have to say, "Your raise was in accordance with your performance." Now, they are all demoralized.
This is if your boss is lucky and someone higher up the food chain doesn't have a special person he wants to bestow a 10 percent increase on, stealing some of your group's salary dollars.
So chances are, a 6 percent increase won't happen. A 4 percent raise is more likely, but you have to keep in mind that the budget is what it is.
You're on the right track by researching salary information. Present that information to your boss, but make sure it's valid information -- not "My friend at [big competitor] makes $10,000 more than I do!" There are numerous salary sites on the internet that can help direct you. But make sure you also look at what people are currently offering for similar jobs. The market isn't a good one right now.
Do not compare yourself to your colleagues. Stress your contributions and how you will continue to be a top performer. Under no circumstances are you allowed to say, "I do a better job than everyone else in the department so I deserve the highest raise." This will earn you two rolled eyeballs and a negative mark on the "teamwork" part of your performance rating. Doesn't matter if it is true; it will annoy the heck out of your manager.
Forget the argument that you didn't get a raise last year. That is not going to fly. Why? Because no one got a raise last year. Everybody thinks they deserve more, including your boss: Your manager wants a top performance rating so he can get a big raise as well. Show him how you will help achieve that next year. Make your case on not only what you have done for the company, but what you will do. The reason for salary increases is to encourage future performance, not reward past performance. Demonstrate that because you have been a consistent high performer in the past, you will be one in the future, and outline how you will accomplish this.
Given the state of the economy, few managers are worrying right now about employees jumping to a new job. But convincing them of your future value to the company -- and to them -- will likely push you closer to the raise you deserve.