One of the most frequent items in my career coaching discussions is my clients’ salaries. This comes up not only when a client is making a transition in their job within their own company or to another, but also during their Annual Performance Review (APR) discussions. More than title, what they make—or should make—matters to every working person.
This blog is about how to manage your salary and to keep it competitive so you do not feel shortchanged in your job. The interesting aspect of managing your salary at each level of your career progression—too high or too low—is that it limits your marketability and how you live. So, knowing how to manage your compensation level is important to keeping your career on track.
This blog is aimed at providing some practicable guidance to its readers on how to do this and get results that work for you.
During APR: Contrary to common misapprehension the time for discussion of your equitable salary is not the upcoming APR but the one before. Most people go into their APR discussion and bring up their accomplishments to stake a claim for a bigger raise or a revised bonus number than what is offered to them. What they don’t realize is that well before the APR process begins the budget and allocations for how the raises—and bonuses—are going to be doled out has already happened. Pleading with your boss during the APR session is a waste of your effort.
The correct timing to make this work is right after your APR is done and you have already received your new compensation numbers. If you did not do anything proactively to manage the expectations of your boss you are likely to have come out disappointed—even insulted—with what was doled out during that APR session. Fighting or arguing during that session is both fruitless and counterproductive, vitiating your prospects for any consideration later. So, the best strategy is to listen to what your boss has to say, provide your side of the perspective, without arguing with them, and walk away determined to disabuse your situation.
When you return for your next scheduled meeting with you boss you’ve come prepared to present them a plan for your next year’s APR. In that discussion you have a strategic details showing what needs to improve in your area of work and how that improvement is going to make your boss look good and even their boss.
Selling this plan to the boss is now in your hands and when you see the twinkle in your boss’ eyes as they review and discuss what you have to present you extract a promise from them, commensurate with the audacity of your plan. This is how you set yourself for your next year’s APR, with a raise that you agree-to during this discussion. Make sure that your plan is specific and agreement ironclad, so that your boss does not wriggle out of it at the next APR cycle. Document this discussion in an email to your boss immediately after that meeting, so that if you have a new boss you have some protection.
During your employment: Despite the above APR strategy, one’s salary can be significantly lower than the market point for their grade level at other companies in the same job market. If someone has stayed at the same employer for a long time (>10 years) it is likely that they have fallen behind the market curve for comparable compensation for their grade. This can seriously compromise your ability to make a change despite your stellar record or your ability to sell yourself during the interview process.
This happened to a client, who had stayed at the same F-100 company for 20 years. When she came to me to change employers we quickly found out that her overall compensation being about 50% lower than the market point got in the way of landing her next job, despite her stellar record in her current job. In fact, her stellar record became the rub in getting her the offer at her competitors’ companies; with her prospect employers arguing, how can someone with such record be paid so little?
It took special efforts to overcome this apprehension, taking several more months to get her the right job with the compensation she deserved. Although she was not required to disclose her current compensation during the interview discussions her own ethical values prevented her from keeping that a secret, which got in the way of getting her what she deserved.
So, the lesson here is to make sure that you manage your salary to keep it at par with the market, so that you do not have to go through this humiliation.
One way to keep current with the market is to know what others are being paid at your company in comparable roles. Although most companies forbid their employees from disclosing their salaries to others one way you can get around this “requirement” is to talk to your friends in similar roles, taking this on as a “ research” project. During these discussions disclosing your own salary makes it easier to get the information you want. The same applies for getting such data from the internet sites—Glassdorr, GetRaised, PayScale, and Salary.com—where you must disclose your compensation to access the information you want from them. You need both data points to make your case: Market data and your own company data.
Yet another way to get such data is to talk to employees in comparable roles that have decided to leave your company and have a discussion with them about these and other matters. They are more likely to be open about such topics now that they are leaving the company and without compromising its “requirements.”
At larger companies HR can generally give you salary range for different job levels. If you are in a union, your rep many also have that information. Government workers can find pay grades published with the US Office of Personnel Management. Non-profit employees can check GuideStar USA, Inc., a free database of Form 990s. These are the disclosures non-profits file with the IRS, which includes all top salaries at each non-profit. Calling your alma mater can also help. Many universities conduct alumni surveys to include salary reports. In such publications ranges are commonly reported, not individual salaries by name or title but by industry or company.
During employer changes: When switching from one employer to another for the same job category—no career change—make sure that you manage the comp discussion strategically. Do not just take what they offer you during their employment discussions after your selection. This is where doing the market research along the lines mentioned above can be a good starting point before you start negotiating your salary. If you do not typically get a 10-15% bump in your current compensation package you are shortchanging yourself. Even when the new package is in this range (10-15% higher) you must still negotiate your overall package. I have written many blogs on how to do this strategically.
During career changes: I have written in my blogs that to keep your career in good shape you must change employers every 3-5 years, jobs every 5-7 years, and career every 10 or so years. Often, changing a career can require taking a position lower than you currently have to equip yourself in the new realm, especially if that is a nascent field with high growth potential. Although it is not a requirement, taking an appropriate position commensurate with the value you bring in this new career is a good way to break into a growth path. Interestingly, new growth career paths often attract talent with higher compensation package because of the demand-and-supply factors.
For getting top compensation in your role, make sure that you remember: You do not get what you deserve, but you get what you negotiate. So, learn how to negotiate strategically to get what you want.
Good luck!