At a recent workshop for experienced professionals, one attendee lamented that performance didn’t matter since his company was not giving raises except at promotions, and promotions were granted mostly based on tenure. Why work so hard then? Would the better move be to do the minimum? Should he just leave for another company? Here are ten productive actions to take if your company pays out no or low raises:
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Verify there are indeed no raises
The company might have a general policy not to pay raises, but are there exceptions? In the above case, promotions were the stated exception, but I would verify if this only included official promotions or if it also included taking on more responsibilities without the formal title change. Ask your boss outright. Ask your colleagues in other departments. Make friends in HR, and get the inside scoop. Don’t just accept a general company announcement as the end of the story. Certainly don’t accept a rumor! Find out as much as you can about the actual policy and any exceptions, so you can build your case around meeting the real policy or deserving an exception.
Verify that you deserve more money
In addition to verifying the raise policy and exceptions, you need to verify where you stand — i.e., that you actually deserve more money. Perhaps your boss told you there would be no raises to avoid an uncomfortable discussion that you are underperforming. You need to know how you are valued, so you can get paid commensurate to the value you add. Get your boss’ candid feedback. Collect testimonials from happy customers, including any internal clients you work with. Measure results from projects you have worked on. Management feedback, testimonials and actual results make up the tangible proof that you deserve more money.
Look at market data to bolster your case
Market data on salaries and raises at competitors can help bolster your case. The company may not be moved by your individual plight but may respond to falling behind their peers. Even internal data on fellow colleague’s raises can be helpful. Companies typically don’t like colleagues to share salary information (and even officially forbid it), so you don’t want to out your chatty colleague who graciously shared what was going on in his or her group. However, you can allude to hearing that a particular group (not any one individual) secured raises, or you can point to a previous year where salaries were supposed to be flat but then exceptions were made. If you can find other people getting raises — internally or at competitors — save this information.
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Look at company performance to confirm capacity to pay
You might deserve more money. Your competitors might be paying more. But how is your company doing? Perhaps the low or no raise policy signals the first of more problems to come. This doesn’t help your case to make more now, but if you discover your company is in trouble, you can be one of the first to proactively leave before everyone else jumps into the candidate pool. Or, if you happily find out your company is doing great, then it further bolsters your case in asking for more.
Increase your responsibilities to increase your pay
In the opening example, the company only paid more for promotions. More companies are moving away from automatic annual increases and towards rewarding based on performance, which includes promotions. Take a pulse of your company culture, and look back at how raises have been handled in recent years. If your company is moving towards this pay-for-performance policy, then make sure you highlight how your performance has grown — either via results (see action 2) or via increased responsibilities. Don’t assume that your boss remembers everything you are working on. Someone might have left and you absorbed their work without a formal title change and without your boss even realizing it. Itemize your responsibilities and highlight how these have grown — an increase in responsibilities, not just results, could increase your pay.
Explore alternative pay options
Some companies don’t issue raises because these mean ever higher pay in the future. But what about a spot bonus? What about equity participation? What about tuition benefits, professional development, increased vacation, or some other benefit? When you explore alternatives to an outright raise, you need to make sure you only negotiate for things you actually want. However, if you are interested in perks that companies can offer, this is a way to get you more cash without the raise — e.g., if you don’t have to pay for the tuition you would have anyway, that’s real money to you.
Tap into different budgets
In addition to the perk adding money to your pocket, it also potentially makes it easier on the company to say Yes because the perk might come from a different budget. If the salary budget is already locked in at low or no raises, then the learning and development budget might still be on the table for the tuition benefits, professional membership dues, or other benefit to you. By proactively suggesting your boss tap into different budgets you expand his or her ability to help you.
Ask off-cycle
If you try all of the above and still get a No, put a reminder on your calendar and ask at the next quarter. Budgets, business conditions, even the perception of your performance might have changed by then. Just because raises are typically doled out on an annual basis doesn’t mean that compensation can’t be adjusted off-cycle!
Focus on a side hustle to grow your pay
As you wait to ask again (and again, as necessary), consider a side hustle for more money and even more opportunity. In the opening example, that experienced professional might be better off doing the minimum, if he then pours his extra energy into a side hustle to grow his pay, his skills and his future career potential.
Leave for a better offer
There is always the possibility that your company will never agree to your raise request. Perhaps they’re not doing well financially or the industry is uncertain so they are keeping a tight lid on costs. Perhaps you are not perceived as deserving a raise, and powerful forces (e.g., decision-makers who prefer someone else, an early underperformance that can’t be overcome) make it difficult for you to turn this around. If you find that your efforts to secure more pay are going nowhere, divert some of that lobbying energy to the outside market. Sometimes the best raise you can get is from a better offer elsewhere.
Don’t automatically assume that a low or no raise environment means you have to accept less pay for yourself. There are productive actions you can take (start with the ten listed above!) to better your individual situation, regardless of what any one boss, company, industry or market quarter suggests.
