How to make the case for a merit raiseMarch 18, 2011: 11:32 AM ET
To get a formerly routine pay hike, you now have to "exceed expectations," says a new study. Here's how to make your pitch.
By Anne Fisher, contributor
Dear Annie: Is this a good time to ask for a raise? I haven't had a pay increase in over three years now, and I really feel I am overdue for one. Business at my company has been picking up over the past few months, and I, along with my team, have contributed to that, working flat-out to make up for the fact that our department was cut in half back in early 2009. I'm not whining -- I love my job, and the benefits (including 401(k) matching and medical insurance) have remained generous throughout the downturn, so I realize I'm luckier than many others. But at what point is it reasonable to seek a pay hike? —Deserving in Denver
Dear Deserving: You've picked an interesting moment to ask. Merit increases at U.S. companies will average 3% this year, up very slightly from 2.7% in 2010, according to a survey of 381 employers by consultants Towers Watson. More good news: Salary freezes are fast fading into history, with only 5% of the companies that put pay on ice in 2010 still doing so this year.
"Most companies have turned the corner and are in a much stronger position financially to recognize and reward employees, especially their top performers," says Laura Sejen, global head of rewards consulting at Towers Watson.
Great, but -- wouldn't you know it? -- there's a catch. Before the recession, for several years running, the average annual merit raise for salaried employees was about 3.5%, with emphasis on the word "average." These days, you have to "exceed expectations" to get that, Towers Watson reports. Last year, just 25% of employees at the companies surveyed met that standard.
Let's say that, to help make up for the years you got no raise at all, you're aiming for a 4% pay hike. That could be tough. Employers told Towers Watson that only folks who "far exceed" job requirements can expect a 4% bump. In 2010, a scant 8% of employees made the cut.
"Companies now have raised the bar. The days when you could count on a merit raise, even for putting in lots of extra energy and effort, are gone," says Ford R. Myers, founder and president of executive coaching firm Career Potential.
Myers adds, even more ominously: "The phrase 'far exceeds expectations' is really a big loophole, with some employers. It's often not based on any objective performance criteria. The 'expectations' are not clearly defined. So, even though the category exists on paper, managers know not to put anyone in it."
Nevertheless, Myers says, your chances of getting a decent raise are better now than they were a year or two ago. So by all means, go for it.
"You have to be your own best advocate, and build a persuasive case for why you are worth more," he says. A big mistake he often sees people make is "assuming that higher-ups already know what you've contributed. Wrong! Your bosses may have a vague idea, but their attention is usually on so many things at once, it's up to you to be your own marketing department and spell it out for them."
You mention that you and your team have contributed to the recent uptick in your company's business. How, exactly?
"You need to point to measurable results," says Myers. "Make a list of very specific items, like 'Sought 10 new customer accounts, landed 12' or 'Increased production line efficiency 22%.' Think back carefully and include anything you've done that has boosted revenues or profits, cut costs, or enhanced productivity.
"The unspoken question your employer has for you is, 'What have you done for me lately?' So you need a detailed answer."
Once you have that list, Myers says, attach it to an email and send it to your boss, with a copy to his or her boss: "Your email should be a very brief note that says something like, 'Please review and let me know if you have any questions. Thank you.' That's it, no need to say more," Myers says.
Then, when you go in to ask for a raise, take that list with you and use it to make your case.
What if you still get either no merit increase or a smaller one than you believe you've earned? Here's where a bit of patience can pay off. Keep coming up with a fresh list of accomplishments every month.
"Once a week, or even every day, make an appointment with yourself to sit down and update your list," Myers advises. "Every 30 days, send it to your boss, without necessarily expecting an immediate response."
Eventually, he says, you will get a response, although it may take a while. This worked for Myers: "In my last job before starting my own company, after several months of religiously sending these lists to the people above me, I got promoted two levels up and doubled my salary in one day."
Keeping decision-makers informed of what you're contributing may boost your self-confidence as well as your paycheck, he adds, not to mention supplying you with excellent talking points for job interviews if you decide to move on.
"Most people take their own achievements for granted. Even my most successful coaching clients sometimes say to me, 'I was just doing my job, no big deal'," says Myers. "But in your own best interest, you need to identify your unique contributions and articulate them" -- if, that is, you really want that raise.
Talkback: If you've requested and received a raise recently, how did you ask for it? If you're a manager who makes pay decisions, what makes you most inclined to grant someone's request? Leave a comment below.
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