Money, Money, Money

A reader was writing the following letter (slightly edited to protect the guilty):

Our annual reviews are coming up this month, and I've been doing some homework: I've looked at the U.S. Dept. of Labor statistics web site,, and and others to evaluate how I fare against industry average. Based on all the websites other than, I am way underpaid. Can and should I use these compensation surveys (other than, to show my boss I am underpaid? My reviews in years past were excellent, but I only received single digit raises. I transitioned into my current position full-time a short time ago. My position before that was a different job altogether. I appreciate your help, and any advice.

For what it's worth, here's my raw thinking on the situation:

  1. I don't know what you're being paid right now but if three out of four salary surveys say your salary is above average that's gotta be worth something. Differences between surveys can result from different samples. (We are seeing this in our own Workforce Study, the differences can be dramatic.) I wouldn't sweat the statistical base - use them for grading yourself on a larger scale, not more. Your manager (or at least the HR manager) are very likely to have read data of a similar kind when they offered you your current salary.

  2. Demanding more money "because others get it as well" has never worked for anybody I know. At best they may view it as irrelevant (after all you're getting paid for your own performance, not that of other people), at worst confrontational. Even if they would privately agree with you it's a gamble whether that would gain you anything.
  3. Use the information you obtained to determine your negotiation strategy. They may give you an indication on what a reasonable target figure is. However you still need to argue a raise on the basis of your value to the company - did you become more effective or efficient over the last year? Did you finish a critical project successfully and have another one coming? Those are the points that count. Note also that no matter what your value to the company is, there are limits to how big raises can get, even if both sides would see them as fair. (I'll quote "budget" and "setting an example" as keywords.)

  4. Would you be prepared to leave if they don't grant you a certain raise? That might be your BATNA (Best Alternative To A Negotiated Agreement). However, even if you are, and even if you know you are critical to the organization's success, never hint at it or, worse, use it as a threat. Don't talk yourself into a corner. (Depending on who you're dealing with it might result in immediate termination of your conversation.)

  5. This last one may be hard to digest: You say you've only just grown into your role. You can be proud of your excellent reviews, but are you sure you're already worth the big bucks with your probably limited experience?

A lot of hard stuff, I'm sure. Irrespective of our material needs we often see a salary as something with a huge impact on our self respect. So play cool and don't let that get to you. You may consider a couple of practice interviews. Be ready to learn from them.Good luck, and I'd like to hear from you how it all worked out!

Copyright © 2008 IDG Communications, Inc.

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