“Can we schedule a time to discuss my performance and compensation?”

For many people, even the thought of uttering this phrase to a manager can create sleepless nights and acid indigestion. Conversations about money are difficult in their own right. Discussions about one’s merit are even more emotional, as can be tied to feelings of self-worth, likeability, and evoke the primal fear of rejection.

Women appear to struggle more with the conversation than men. Over the course of participating in over two decades of women’s events, panel discussions (and valuable personal chats in the sanctity of women’s restrooms), I’ve learned that women tend to undervalue themselves relative to men. They wait to ask for recognition until they have achieved 150% of their goals before initiating a promotion conversation, whereas men seem to feel confident starting when they haven’t yet accomplished 100%.

Women also tend to postpone the money and promotion talks longer than men, which can add up to serious monetary impact on their lifetime earning streams. Data gathered by Payscale.com (see this link) shows that for average college graduates, men’s earnings peak and plateau around the age 48, while women’s around a mere 39 years. Even worse, they peak at levels about $35,000 apart! Given this apparently shortened time frame for compensation growth (the causes are theorized in other studies), it is obviously imperative that women speak up expediently and not only ask for raises when warranted, but for the managers to give them when due.

Of course, no one can control their boss’ actions. However, women (and men!) can prepare themselves to maximize their chances for a raise, which will also reduce the anxiety embedded in the process. I recently interviewed several of the BIZZYCHICKS community (see www.bizzychicks.org, a network of successful business women who are promoting financial literacy and careers in business) to comb through their collective experiences as both managers and employees in order to offer a wise approach to asking for and getting a raise.

The best way to approach the process is to treat it in an objective fashion – consider it a 3 step exercise where you plan a pitch to a client you want to win over. It is imperative that you go through all of these steps before scheduling an appointment with your manager; what happens if you ask to meet and she pulls you straight into her office for an impromptu meeting?

Step 1: Research / Analysis
To successfully pitch for a raise or a promotion, you must start with the research. In this analysis phase, you accumulate evidence – ideally, hard data – that answer the following:

•What increase in value have you added to the team and to the company?
You already must be a revenue generator to the firm in order to warrant your salary in the first place. To argue for more pay, build a case as to how your actions have successfully increased the company’s profits and/or revenues, especially since the last time your pay point was established. If you’re lucky enough to be in a “quantifiable” position such as sales, crunch the numbers and put them in a table. If you impact the bottom line in an indirect fashion, you still need to know how you have made the company more money than expected for your role. Maybe value creation has been a result of processes that you improved through automation, better sourcing of information, or a better presentation of company materials that has led to increased sales. The argument has to be laid out clearly and concisely and your manager has to understand immediately that the request is supportable. If you have a unique skillset, and if you can prove that you producing above-average output and revenue generation, you will have a better chance of clinching the deal.

• What is your value in the market overall?
While it is not always wise to talk to colleagues about their own pay levels, typically many medium-to-large sized companies publish aggregated pay scales for their employees. For firms with a human resources (HR) department, this is a great place to start. Your HR support staff should be able to objectively describe your own position within the compensation framework of the company for similar roles; don’t be afraid to ask them. In addition, many industries are serviced by talent recruitment or executive search firms. Whether you are in real estate or finance or entertainment or tech, these search firms know the market for employees. Reach out to some in your field to learn about pay ranges for your skill set. Furthermore, the internet is a marvelous place to look for salary data. Websites such as Payscale and GlassDoor and Salary.com offer metrics for comparison. The point is, know your competition, and where you stand relative to them. If you are a productive employee but are receiving below-average compensation, the case will be that much more compelling.

Step 2: The Pitch – Know your customer

You will be making your case to your manager, and she/he has to make the case to the company. You need to analyze how both are positioned to receive your request.

• How does your boss process information?
Does your manager respond well to formal presentations? Are they data hounds? From your observations over past discourse, you should know what method of communication and suasion work best. Stick to these.

• How is the company positioned to honor your request?
You don’t work in a void. You could be doing well and contributing more than expected, but your company could be in a rough patch; in this situation it’s probably not an ideal time to ask for more money. Second, be sensitive to the timing of compensation decisions. While performance reviews may be an annual, scheduled discussion, compensation decisions most often take place 3-4 months before a firm’s fiscal year end. You need to get your analysis to your manager before these discussions take place.

Step 3: Have a Plan B: what if you are told “no”

Even if you believe you have built a solid case, your case could be rejected. Be prepared to ask why – and then follow up. If your manager disagrees with your analysis of your own value and contribution to the company, listen to their opinion. Perhaps you misjudged; if so, ask for some new metrics to try to achieve before the next round. If you feel you have a sound case, and are rejected (more than once), it could be that you need to find another company to work for in order to attain the appropriate market wage. If you are told “no” because of company circumstances, ask your boss to quantify metrics that you can monitor that would indicate a sufficient evolution in the environment that would warrant another discussion.

Once you’ve done your homework, go for it! If you don’t ask, someone else probably will, and will take your share.

 

Special thanks to Cathe Tocher, CIO at Great-West Financial, who contributed to this article.