9 ms·

Some thoughts on asking for a raise

115 points by whbk 12y ago

aceperry 12y ago
Great perspective and advice over Satya Nadella's recent gaffe about advising women to not ask for a raise. Roizen's article explains and examines some of the issues behind compensation and raises. She weaves in her own experiences to make the case that asking for a raise is one of the better things to do, from both the employees' and employers' perspective.
- aceperry 12y ago
  I got to wonder about the downvotes that I received. I've noticed that there are some guys (mostly) who will reject anything that a woman says, no matter what the message. Glad to see that most of the posters on this topic are in favor of asking for a raise, unlike Nadella's statement.
cheepin 12y ago
> I also believe most employers are not trying to screw you or underpay you. This is something I hear contradicted here quite a bit. As someone who hasn't been in the industry a long time, I'm interested in hearing more about why this is or isn't true.
- paulsutter 12y ago
  TL/DR: IF YOU WANT A GOOD RAISE, GET A COMPETING OFFER. It's absolutely true. Employers really don't want to screw employees, they just have no true measure of your value. They have to use your most recent pay, YOUR OTHER OFFERS, industry stats, and a biased set of personal anecdotes to ballpark a placeholder when you get hired, because there really is no other information. Once you are hired, your manager never thinks about your salary. Until he has to, like annual reviews. OR YOU HAVE A COMPETING OFFER. And during annual reviews, he's given one bucket of raise that he needs to divvy up among his staff. There isn't a lot to go around, nor any way to handle special cases. That's just the way it works. If you want a good raise, get a competing offer.
  - vinceguidry 12y ago
    I've heard this advocated a lot, but I find it hard to do in the case where you really don't want to leave your company, but do need to correct your salary. Because it requires engaging with other companies on less than good faith that you're really motivated to jump to another job. Sure, if you're a sociopath, this won't be a problem for you. As someone in this exact position, my solution was to ask for a raise, and when they said no, I considered trying to make a quick move. But after realizing that I really don't want to job hunt right this moment, I put my head down and went back to work. I think in order to get to that point in your career where you can easily have multiple competing offers to choose from, you need to be a really good developer with a spiffy-looking portfolio. Takes time to get there, and beating the bushes to get offers just doesn't appeal to me, and probably won't until I've fine-tuned my development process to where I can whip up websites like no tomorrow. My job is Good Enough for the moment, yours might be too if you think about it. Oh and parent comment presented his opinion as a TL:DR of the OP, when in fact it's just his opinion. The OP is nuanced and quite worth the read.
    - sheepmullet 12y ago
      "I think in order to get to that point in your career where you can easily have multiple competing offers to choose from, you need to be a really good developer with a spiffy-looking portfolio." Not true at all. Development is currently a hot market and you can get competing job offers right now without any portfolio as an average developer. If you wait a few years development might not be such a great market and you might not get a raise even if you are a much better developer.
      - deleted 12y ago
        [deleted]
    - kelnos 12y ago
      ... it requires engaging with other companies on less than good faith that you're really motivated to jump to another job. This is what bothers me most about this sort of advice. As someone who is often trying to hire people, it's a lot of effort to get a candidate through the pipeline to the point where an offer is made. Intentionally causing people at another company to waste that kind of effort would make me feel like I was doing something unethical. I really don't think you should look for a competing offer unless you're willing to accept that offer if you don't get what you want from your current employer. As someone in this exact position, my solution was to ask for a raise, and when they said no, I considered trying to make a quick move. But after realizing that I really don't want to job hunt right this moment, I put my head down and went back to work. Yeah, I think that's just the value judgment everyone has to make. Either you get another offer and are willing to walk if it's not met, or you're willing to wait it out and see if you can get a better raise later. It's a personal decision based on your circumstances. Oh and parent comment presented his opinion as a TL:DR of the OP, when in fact it's just his opinion. The OP is nuanced and quite worth the read. I think the parent was actually tl;dr'ing his own post up front.
- kelnos 12y ago
  I think this is framed the wrong way. I don't think most employers try to screw or underpay you, but they will -- quite rationally and reasonably -- avoid paying more for what they can have for less. I'm sure there are some bad actors that try to keep their employees from figuring out what they're actually worth. The semi-recent revelations of no-poaching agreements between some high-profile tech companies certainly suggest that some do put a higher priority on retaining employees than they do on fair compensation. But I really don't think that's the norm. I don't think many HR departments and managers sit around trying to come up with ways to keep their employees' salaries down. I hope I'm not being too idealistic thinking that.
Kenji 12y ago
That was a great read. An insightful piece. In my eyes, this is the most important line: "And finally, here is one thing NEVER to do when asking for more money. Never ask for it nor justify it because of your need." That does not just apply to money. This behaviour is nothing but begging and playing on emotions. Professional people will look right through it.
- Argorak 12y ago
  A slight reformulation helps: instead of communicating a need, communicate a wish. Don't dabble on the why. That makes clear that if they say no, they don't fulfill an expectation, which (hopefully) works against their goal: keeping you.
swombat 12y ago
> And finally, here is one thing NEVER to do when asking for more money. Never ask for it nor justify it because of your need. If you work for a for-profit entity, as most of us do, your need is completely irrelevant. While I can personally be hugely empathetic to your financial needs and hardships, I cannot justify increasing your compensation because of them — that is unfair to the company and to any coworker who puts in the same effort but walks away with less. Interesting note on this... At GrantTree we're (still in the early stages of) trying something different. Since all pay is open and we use something called the "advice process" to make decisions, to change their salaries people need to make an open proposal to the whole company, gather feedback, and then make a decision (note: they do not need to incorporate all or any of the feedback; we trust them to make the right decision). With this in mind, the proposal is meant to cover 5 key angles: 1) What do I deserve? 2) What do I need? 3) What is the market rate for my role? 4) What can the company afford? 5) What is good for GrantTree? We explicitly ask people to include their needs in this. They are people, they have needs - ignoring that is stupid, in my opinion. If we have someone on staff who is contributing greatly to the company but has high mortgage payments, and I pay them less because I have this other person who is contributing the same but has much lower monthly costs, and I pay the first the same as the second, I will lose the first because they can't afford to keep this job. Obviously we're still experimenting with this (about 3 months in), but I think that considering the needs of the person is essential - particularly in a decision model where they make the decision anyway, so they will obviously be considering their own needs as part of the equation! But even if someone else was making the decision, considering the person's needs is absolutely mandatory if you expect the person to also consider the company's needs. In other words, if you don't care about their needs, why should they care about yours? "Oh really, this has been a bad year so you don't want to give me a pay raise even though my market rate has increased? Fuck you, I'm off."
- kelnos 12y ago
  If we have someone on staff who is contributing greatly to the company but has high mortgage payments, and I pay them less because I have this other person who is contributing the same but has much lower monthly costs, and I pay the first the same as the second, I will lose the first because they can't afford to keep this job. Oof. Not sure how I feel about this rationale. If I were the other guy in this equation, I'd be pissed if I was making the same contribution as someone else, but got paid less because the other guy "needed it more". Why am I being punished because I live within my means? Maybe the response to, "I need a higher salary because I have a large mortgage payment", should be, "maybe you shouldn't have bought a larger house than you could afford". How about this: say this guy works at your company, and presents this rationale, and gets (takes?) his raise. Then the other guy, who is (for the sake of the argument) exactly equal in experience and skill, and provides the same value to your company, steps up to the plate and says, "I would like a raise as well, because I should make the same amount as someone who is my equal and peer". Would the group agree with that? I certainly hope so. If I were that guy, I'd quit on the spot if not. And this extends to other things as well: one guy has 4 kids, the other has 2. Kids can be expensive. Does the first guy's decision to have more kids make him more deserving of a higher salary than the other guy? I could extend this to just about anything. In the end, once you're above the poverty line, your "needs" aren't really based on anything rational or "fair". It's really just what you want. I'm not saying you shouldn't try to get what you want, but suggesting that one person's wants entitles them to a higher salary than someone who has more modest wants... well, that's ridiculous to me. This is actually a great example of one of the reasons why employers like to keep compensation secret. If this hypothetical high-mortgage guy is that important to the company, you want to be able to give him more money if not doing so will cause him to quit, all without pissing off the other otherwise-equal guy with the now-lower salary. So my thesis here, I guess, is that if you're going to be transparent about compensation, that compensation must be based on measures as objective as you can make them. Otherwise you have to keep compensation secret so you can make "unfair" deals with some employees as necessary, without pissing off other employees who don't get such a good deal. At any rate, I do think what you're doing is a really cool (and brave!) experiment. I hope it works out for you and your company, but I'm very much afraid that making personal needs a component of public compensation decisions will lead to others harboring resentment.
joshyeager 12y ago
The team at Manager Tools/Career Tools did a great series on this topic. They go into the details of how to figure out what your market rate is, how to build your case, and how to present it. http://www.manager-tools.com/2013/12/when-ask-a-pay-rise http://www.manager-tools.com/2013/12/when-ask-a-pay-rise http://www.manager-tools.com/2014/04/how-ask-a-raise-researching-comparable-pay http://www.manager-tools.com/2014/04/how-ask-a-raise-researc... http://www.manager-tools.com/2014/04/how-ask-a-raise-cost-living http://www.manager-tools.com/2014/04/how-ask-a-raise-cost-li... http://www.manager-tools.com/2014/05/how-ask-a-raise-making-ask http://www.manager-tools.com/2014/05/how-ask-a-raise-making-...
spatulon 12y ago
I recently negotiated a significant raise with my boss. Some of the main points I made to him were: 1) That I'm the de facto lead engineer on a product that's making €X million per year while also strategically important for the company. i.e. I'm valuable to the company and would appreciate them acknowledging that via the well-understood language of money. 2) That my raise would be small change to the company in the grand scheme of things. 3) That I could expect to walk into a different job at the salary I was asking my boss for, and have been considering doing so. 4) That if I left, he'd expect to pay an equivalently experienced replacement a similar amount, while also suffering the pain of upheaval on a small development team. So I tried to keep it balanced between reasons why it would be good for both me and the company to give me the raise, while leaving him clear about the consequences of not doing so. Note that I didn't have a job offer from elsewhere to use as leverage, but in my case the threat of leaving seemed to concern him sufficiently (recruiting good developers is pretty tough in northern England) that it worked almost as well. However, it still left me in a weak position when he asked me for a number. I should also note that I was extremely nervous about championing myself so overtly, and it didn't come naturally at all (we programmers are excessively meek at times). I'm happy to report that none of the disastrous consequences I'd imagined in my head came to fruition, and my boss reacted extremely positively.
nness 12y ago
I think a rookie mistake that gets made is to argue that they should be paid based on the marked rate. Knowing what the going rate is is an important base for understanding the direction in which your career will develop, and what you should expect in remuneration as it develops. But, I feel it is foolish to go into that negotiation and say "salary averages say I should earn X, therefore, pay me X." What you may end up finding is that if you ask for market rate, you'll hear "if you can fetch that in the market, go to the market." Market rates are an average, a very broad average, that does not always take into account your geography, your industry and any specialisation you have. Some companies will value more, some less. A better way to approach that discussion is to understand your remuneration is based on some contractual period, namely 12 months. What you need to do is work with your employer to set how those next 12 months should be valued. It's all about trajectory. If you've had a few years of positive development, it should be an easy case to make that the trend will continue upwards. It's also an interesting test, if you can't see how your next year will provide increase value to the organisation, it may show early signs of changes that are about to occur internally. That said, if you have an actual offer, that's a different discussion.
- sheepmullet 12y ago
  "Knowing what the going rate is is an important base for understanding the direction in which your career will develop, and what you should expect in remuneration as it develops. But, I feel it is foolish to go into that negotiation and say "salary averages say I should earn X, therefore, pay me X."" You should be delivering significantly more value than market rates! Market rates for your skill level should be a salary floor. Surely you can deliver far more value to your company than a random developer who walks in the door. I know I can, as a fairly average developer, easily outperform top developers because of all the internal knowledge, market knowledge, and customer knowledge I have built up over the years. If you aren't worth market rates in your area then you should consider changing jobs because your company is clearly getting you to do low value easily replaceable work.
pmorici 12y ago
"You owe it to yourself to know what your ‘market price’ is" The article provides fine high level advice but doesn't get into how to get this 'good data' on your market price. Is glassdoor good data? Because my general impression is that it is not very accurate and probably skews low. What are some other sources of this information?
- cagriaksay 12y ago
  Glassdoor indeed skews low and gives you a wide range. There are other sources: salary.com, payscale.com and also my own startup https://salaryfairy.com https://salaryfairy.com Instead of giving the market price for a company/job title, we aim to give a market price for your own background and skills.
  - claar 12y ago
    I started using SalaryFairy after seeing your link here -- nice site! I understand the "collective intelligence" angle you're going for. However, the way SalaryFairy is implemented seems to "taint" the collective intelligence, at least in my case. After predicting quite a few salaries, my score was -9 because apparently my predictions were different from the "crowd" predictions. This negative score is encouraging me to "guess" the crowd predictions, rather than simply make my best guess as to what the salary would be for the given prediction. Since I noticed that my guesses are, on average, quite a bit lower than the "crowd" guesses, my new "strategy" is to guess the salary, then pad it $10-$50k to improve my score. This seems like a bad thing when it comes to the "collective intelligence" goal of the site. Just a thought -- hope it's helpful.
    - cagriaksay 12y ago
      It's indeed very helpful. Predictions should be independent for wisdom of the crowd to actually work. But we did introduce this dependency by revealing crowd predictions after yours as a tradeoff. We want to give feedback on how our users are doing, so that they're incentivized to continue making predictions. Sometimes what you see as crowd prediction could be just a couple predictions. As new predictions come in, we adjust individual scores. We are planning to hide scores until a healthy number of predictions are made on that profile. That should help a bit on the dependency issue. We are open to suggestions as well. Thanks for the feedback.
asgard1024 12y ago
The problem I see with the article is that it focuses on rationality of monetary payment and ignores wider perspective of human thinking, which includes fairness, for example. I never had to ask for raise at my job (for several years), but with the change of my boss, it looks like I will have to. I'm actually pretty happy with the money; what I more concerned about is the feeling of being treated unfairly. My boss, unlike me, has all the information, so he can decide to treat people around him fairly. If he does not, and makes these decisions based on what people ask him, then he is certainly not being fair. Then, why on Earth should I want to work for a person like that? Doesn't that kill motivation too? In other words, what's wrong with wanting to stay humble about your work (there are many articles that ask engineers to be exactly that, and it's certainly a great characteristic for a coworker), but at the same time, demand fair treatment?
- _yosefk 12y ago
  What's wrong with it is one is likely to be paid less. Theoretically I'd love to work at an environment where you're paid fairly without having to negotiate, and where negotiation skills would not affect one's compensation. However, wherever productivity is hard to objectively quantify (which is very often the case), the compensation is unfair out of statistical necessity (errors in attempts to quantify productivity are much more likely than no errors.) Negotiation skills will thus necessarily impact compensation because they're basically about convincing that you're worth more than you're paid and employers cannot be "immune to convincing" because they have no truly objective criterion to rely on. Another angle is that there are many things worth working on in environments where fairness is not only an elusive goal, but not even something the employer aims at; rather, they aim at minimizing their expenses, or out-negotiating you for the sport of it, etc. You can stay around for a while, underpaid, and then quit and not work on that thing anymore; or you can negotiate a better deal and stay and keep working on that thing. Sometimes you might prefer the latter. Another scenario is, your skills are uniquely valuable to someone who minimizes expenses rather than maximizing fairness, and the best deal you are likely to get for yourself is by negotiating with that party.
paul9290 12y ago
Use recruiters to get the best deal. If your a web designer, developer or software engineer I'm sure your getting one recruiter a day to a week offering you X job. A lot of ppl don't like to deal with recruiters but for me I'm flattered and think I don't need them now they need me. Thus when they ask how much I seek for their opportunity I significantly jack up my rate. Doing this has led from going from one company(every 2 years) to another each time making significantly more money. Though one company I worked for learned I was going to take a better offer and matched it.
- tonyedgecombe 12y ago
  I've never had a recruiter that worked hard on my behalf, every one wants to do as little as they can get away with.
SixSigma 12y ago
In MIT's book [1] on negotiation strategy they suggest that instead of bartering on a figure one should negotiate a way of determining the figure. That way you don't have a numerical anchor and you also have a mechanism for the future. [1] http://en.wikipedia.org/wiki/Getting_to_Yes http://en.wikipedia.org/wiki/Getting_to_Yes
- sweettea 12y ago
  The authors were actually part of the Harvard Negotiation Project, not MIT, and the book was published as far as I can tell with no university affiliation.
  - SixSigma 12y ago
    Oops, my mistake, and it's there right on the first line of my link. I read the paper version :)
bane 12y ago
I remember my first full-time salaried job. I had just graduated college and before that had been working hourly part-time and internships and was thrilled moving onto a salaried full-time position calculated at basically the same rate as what I had been earning. About a year into the job I accidentally came across a piece of private paperwork a less experienced co-worker left on the shared printer that had her salary on it. It was almost twice what I was making! I started a campaign to fix this discrepancy. I started keeping track of every task I performed, even little one-off tasks, and also the impact that completion of that task had. I often found that the tiny half-hour one-off tasks I was taking care of without a second thought were generating huge returns on efficiency for my company. A simple script that turned a 40 hour a week copy-and-past data entry job that was eating into corporate overhead into a 30 second run-once-a-week thing was freeing up an employee to work on higher billable hour tasks. I was not only saving the company money, but making it money by pinpointing and automating problems in their business processes. The next evaluation period I walked in with a 20 page print out of every task I had worked on in the last year, what it was, and how it had impact on the company's bottom-line. I asked for as big of a pay raise as company policy would allow. It worked, and it continues to work everywhere I go. Having an irrefutable record of your value to the company makes it impossible for them to turn you down. And when they do, you now have an excellent archive to use for resume filler when you go looking for your next job. Things I never do: - threaten to go somewhere else if they don't give me the raise, this is implicit. If they don't give it to you, leave the company. Simple as that. No threats. Managers don't like it and it's just as likely to backfire on you. I guarantee they'll muddle along somehow without you. - get upset, what employees are paid is a complex business that you can only ever really understand when you're in the position to be paying them. Sometimes you'll end up getting paid less than an employee in a similar position. It sucks, but sometimes there's reasons for it that you aren't privy to. Don't compare your pay to others too much, compare it to yourself and where you want to be. - demand pay that exceeds what you should be making in that position in that industry. It sucks, but if you work phone tech support or are a receptionist, you're not going to be making $250k/yr. If you want to make that kind of money, ask what the requirements are for that job then pursue them. Hold the company to that claim. When you fulfill those requirements, if they don't pay-up, move on. Congratulations you are now qualified for a better job at a competitor. - take a raise, then quit immediately. I feel this is a point of honor, if I make a big fuss and my manager goes through a lot of trouble to get a silver bullet for me, I feel like I've just made at least 12 month commitment to them. You'd be surprised at how important this has been for me career-wise many years later. I've had old managers who've hired me back at new companies (or give me open offers) just because I stuck around after they put their neck on the line for me, even when the work environment sucked. As a manager it can be difficult justifying huge percentage pay increases for your people (my 20 page list of completed tasks usually helped them significantly). - ask for it based on need. "I need to make more money to make my rent". I did this once, and my manager responded with, "well you should live in a cheaper place". And that was the last time I tried that. Your company is not responsible for your personal spending habits, full stop.
steven2012 12y ago
I think Nadella chose his words poorly, but I thought his gist was that "I envision a time when people, both men or women, will not need to ask for raises because it will come naturally." I don't/can't believe he is sexist in the sense that he thinks women should just sit back and wait for their paymasters to bestow a gift onto them. That being said, the last person you can trust to give you a raise is your employer. I don't think it's out of maliciousness, but it's just reality. It's a rare boss that actually cares enough to guide you and to push you to make your career better, because that means they will be losing you. I've had 1 of those bosses, when I first came to Silicon Valley, and it affected how I look at things. The rest of my bosses just want me to make their lives easier. They will pay me well and treat me well if I make their lives easier, ie. add new features, fix bugs, handle customer escalations, and I'm grateful for this because they've treated me very well. But things like raises, career growth, it's rare that managers think too much about this, because it's precisely the type of thing that makes their life worse, because if you grow out of your current role, they will lose you. The other part of this equation is that you need to be able to properly evaluate yourself. If you're just average, then you deserve market rate, because you're easily replaced. But 80% of all people think they are above average, which causes friction. If you're really good, then you deserve higher-than market, but everyone else should get market.
s0uthPaw88 12y ago
What I like about this article is that it points out that human capital is a marketplace. No matter what you perceive your value or worth to be, your worth in the marketplace is only what you can get someone else to compensate you for. If you feel there is a discrepancy between what you are currently being compensated and what you are worth then it is your job get fair value for your skills. Either you prove your worth to your current employer or you find someone in the marketplace that is willing to pay the price you have set for your skills.

115 points by whbk 12y ago

Great perspective and advice over Satya Nadella's recent gaffe about advising women to not ask for a raise. Roizen's article explains and examines some of the issues behind compensation and raises. She weaves in her own experiences to make the case that asking for a raise is one of the better things to do, from both the employees' and employers' perspective.

aceperry 12y ago
I got to wonder about the downvotes that I received. I've noticed that there are some guys (mostly) who will reject anything that a woman says, no matter what the message. Glad to see that most of the posters on this topic are in favor of asking for a raise, unlike Nadella's statement.

cheepin 12y ago

> I also believe most employers are not trying to screw you or underpay you. This is something I hear contradicted here quite a bit. As someone who hasn't been in the industry a long time, I'm interested in hearing more about why this is or isn't true.

paulsutter 12y ago
TL/DR: IF YOU WANT A GOOD RAISE, GET A COMPETING OFFER. It's absolutely true. Employers really don't want to screw employees, they just have no true measure of your value. They have to use your most recent pay, YOUR OTHER OFFERS, industry stats, and a biased set of personal anecdotes to ballpark a placeholder when you get hired, because there really is no other information. Once you are hired, your manager never thinks about your salary. Until he has to, like annual reviews. OR YOU HAVE A COMPETING OFFER. And during annual reviews, he's given one bucket of raise that he needs to divvy up among his staff. There isn't a lot to go around, nor any way to handle special cases. That's just the way it works. If you want a good raise, get a competing offer.
- vinceguidry 12y ago
  I've heard this advocated a lot, but I find it hard to do in the case where you really don't want to leave your company, but do need to correct your salary. Because it requires engaging with other companies on less than good faith that you're really motivated to jump to another job. Sure, if you're a sociopath, this won't be a problem for you. As someone in this exact position, my solution was to ask for a raise, and when they said no, I considered trying to make a quick move. But after realizing that I really don't want to job hunt right this moment, I put my head down and went back to work. I think in order to get to that point in your career where you can easily have multiple competing offers to choose from, you need to be a really good developer with a spiffy-looking portfolio. Takes time to get there, and beating the bushes to get offers just doesn't appeal to me, and probably won't until I've fine-tuned my development process to where I can whip up websites like no tomorrow. My job is Good Enough for the moment, yours might be too if you think about it. Oh and parent comment presented his opinion as a TL:DR of the OP, when in fact it's just his opinion. The OP is nuanced and quite worth the read.
  - sheepmullet 12y ago
    "I think in order to get to that point in your career where you can easily have multiple competing offers to choose from, you need to be a really good developer with a spiffy-looking portfolio." Not true at all. Development is currently a hot market and you can get competing job offers right now without any portfolio as an average developer. If you wait a few years development might not be such a great market and you might not get a raise even if you are a much better developer.
    - deleted 12y ago
      [deleted]
  - kelnos 12y ago
    ... it requires engaging with other companies on less than good faith that you're really motivated to jump to another job. This is what bothers me most about this sort of advice. As someone who is often trying to hire people, it's a lot of effort to get a candidate through the pipeline to the point where an offer is made. Intentionally causing people at another company to waste that kind of effort would make me feel like I was doing something unethical. I really don't think you should look for a competing offer unless you're willing to accept that offer if you don't get what you want from your current employer. As someone in this exact position, my solution was to ask for a raise, and when they said no, I considered trying to make a quick move. But after realizing that I really don't want to job hunt right this moment, I put my head down and went back to work. Yeah, I think that's just the value judgment everyone has to make. Either you get another offer and are willing to walk if it's not met, or you're willing to wait it out and see if you can get a better raise later. It's a personal decision based on your circumstances. Oh and parent comment presented his opinion as a TL:DR of the OP, when in fact it's just his opinion. The OP is nuanced and quite worth the read. I think the parent was actually tl;dr'ing his own post up front.
kelnos 12y ago
I think this is framed the wrong way. I don't think most employers try to screw or underpay you, but they will -- quite rationally and reasonably -- avoid paying more for what they can have for less. I'm sure there are some bad actors that try to keep their employees from figuring out what they're actually worth. The semi-recent revelations of no-poaching agreements between some high-profile tech companies certainly suggest that some do put a higher priority on retaining employees than they do on fair compensation. But I really don't think that's the norm. I don't think many HR departments and managers sit around trying to come up with ways to keep their employees' salaries down. I hope I'm not being too idealistic thinking that.

Kenji 12y ago

That was a great read. An insightful piece. In my eyes, this is the most important line: "And finally, here is one thing NEVER to do when asking for more money. Never ask for it nor justify it because of your need." That does not just apply to money. This behaviour is nothing but begging and playing on emotions. Professional people will look right through it.

Argorak 12y ago
A slight reformulation helps: instead of communicating a need, communicate a wish. Don't dabble on the why. That makes clear that if they say no, they don't fulfill an expectation, which (hopefully) works against their goal: keeping you.

swombat 12y ago

> And finally, here is one thing NEVER to do when asking for more money. Never ask for it nor justify it because of your need. If you work for a for-profit entity, as most of us do, your need is completely irrelevant. While I can personally be hugely empathetic to your financial needs and hardships, I cannot justify increasing your compensation because of them — that is unfair to the company and to any coworker who puts in the same effort but walks away with less. Interesting note on this... At GrantTree we're (still in the early stages of) trying something different. Since all pay is open and we use something called the "advice process" to make decisions, to change their salaries people need to make an open proposal to the whole company, gather feedback, and then make a decision (note: they do not need to incorporate all or any of the feedback; we trust them to make the right decision). With this in mind, the proposal is meant to cover 5 key angles: 1) What do I deserve? 2) What do I need? 3) What is the market rate for my role? 4) What can the company afford? 5) What is good for GrantTree? We explicitly ask people to include their needs in this. They are people, they have needs - ignoring that is stupid, in my opinion. If we have someone on staff who is contributing greatly to the company but has high mortgage payments, and I pay them less because I have this other person who is contributing the same but has much lower monthly costs, and I pay the first the same as the second, I will lose the first because they can't afford to keep this job. Obviously we're still experimenting with this (about 3 months in), but I think that considering the needs of the person is essential - particularly in a decision model where they make the decision anyway, so they will obviously be considering their own needs as part of the equation! But even if someone else was making the decision, considering the person's needs is absolutely mandatory if you expect the person to also consider the company's needs. In other words, if you don't care about their needs, why should they care about yours? "Oh really, this has been a bad year so you don't want to give me a pay raise even though my market rate has increased? Fuck you, I'm off."

kelnos 12y ago
If we have someone on staff who is contributing greatly to the company but has high mortgage payments, and I pay them less because I have this other person who is contributing the same but has much lower monthly costs, and I pay the first the same as the second, I will lose the first because they can't afford to keep this job. Oof. Not sure how I feel about this rationale. If I were the other guy in this equation, I'd be pissed if I was making the same contribution as someone else, but got paid less because the other guy "needed it more". Why am I being punished because I live within my means? Maybe the response to, "I need a higher salary because I have a large mortgage payment", should be, "maybe you shouldn't have bought a larger house than you could afford". How about this: say this guy works at your company, and presents this rationale, and gets (takes?) his raise. Then the other guy, who is (for the sake of the argument) exactly equal in experience and skill, and provides the same value to your company, steps up to the plate and says, "I would like a raise as well, because I should make the same amount as someone who is my equal and peer". Would the group agree with that? I certainly hope so. If I were that guy, I'd quit on the spot if not. And this extends to other things as well: one guy has 4 kids, the other has 2. Kids can be expensive. Does the first guy's decision to have more kids make him more deserving of a higher salary than the other guy? I could extend this to just about anything. In the end, once you're above the poverty line, your "needs" aren't really based on anything rational or "fair". It's really just what you want. I'm not saying you shouldn't try to get what you want, but suggesting that one person's wants entitles them to a higher salary than someone who has more modest wants... well, that's ridiculous to me. This is actually a great example of one of the reasons why employers like to keep compensation secret. If this hypothetical high-mortgage guy is that important to the company, you want to be able to give him more money if not doing so will cause him to quit, all without pissing off the other otherwise-equal guy with the now-lower salary. So my thesis here, I guess, is that if you're going to be transparent about compensation, that compensation must be based on measures as objective as you can make them. Otherwise you have to keep compensation secret so you can make "unfair" deals with some employees as necessary, without pissing off other employees who don't get such a good deal. At any rate, I do think what you're doing is a really cool (and brave!) experiment. I hope it works out for you and your company, but I'm very much afraid that making personal needs a component of public compensation decisions will lead to others harboring resentment.

joshyeager 12y ago

The team at Manager Tools/Career Tools did a great series on this topic. They go into the details of how to figure out what your market rate is, how to build your case, and how to present it. http://www.manager-tools.com/2013/12/when-ask-a-pay-rise http://www.manager-tools.com/2013/12/when-ask-a-pay-rise http://www.manager-tools.com/2014/04/how-ask-a-raise-researching-comparable-pay http://www.manager-tools.com/2014/04/how-ask-a-raise-researc... http://www.manager-tools.com/2014/04/how-ask-a-raise-cost-living http://www.manager-tools.com/2014/04/how-ask-a-raise-cost-li... http://www.manager-tools.com/2014/05/how-ask-a-raise-making-ask http://www.manager-tools.com/2014/05/how-ask-a-raise-making-...

spatulon 12y ago

I recently negotiated a significant raise with my boss. Some of the main points I made to him were: 1) That I'm the de facto lead engineer on a product that's making €X million per year while also strategically important for the company. i.e. I'm valuable to the company and would appreciate them acknowledging that via the well-understood language of money. 2) That my raise would be small change to the company in the grand scheme of things. 3) That I could expect to walk into a different job at the salary I was asking my boss for, and have been considering doing so. 4) That if I left, he'd expect to pay an equivalently experienced replacement a similar amount, while also suffering the pain of upheaval on a small development team. So I tried to keep it balanced between reasons why it would be good for both me and the company to give me the raise, while leaving him clear about the consequences of not doing so. Note that I didn't have a job offer from elsewhere to use as leverage, but in my case the threat of leaving seemed to concern him sufficiently (recruiting good developers is pretty tough in northern England) that it worked almost as well. However, it still left me in a weak position when he asked me for a number. I should also note that I was extremely nervous about championing myself so overtly, and it didn't come naturally at all (we programmers are excessively meek at times). I'm happy to report that none of the disastrous consequences I'd imagined in my head came to fruition, and my boss reacted extremely positively.

nness 12y ago

I think a rookie mistake that gets made is to argue that they should be paid based on the marked rate. Knowing what the going rate is is an important base for understanding the direction in which your career will develop, and what you should expect in remuneration as it develops. But, I feel it is foolish to go into that negotiation and say "salary averages say I should earn X, therefore, pay me X." What you may end up finding is that if you ask for market rate, you'll hear "if you can fetch that in the market, go to the market." Market rates are an average, a very broad average, that does not always take into account your geography, your industry and any specialisation you have. Some companies will value more, some less. A better way to approach that discussion is to understand your remuneration is based on some contractual period, namely 12 months. What you need to do is work with your employer to set how those next 12 months should be valued. It's all about trajectory. If you've had a few years of positive development, it should be an easy case to make that the trend will continue upwards. It's also an interesting test, if you can't see how your next year will provide increase value to the organisation, it may show early signs of changes that are about to occur internally. That said, if you have an actual offer, that's a different discussion.

sheepmullet 12y ago
"Knowing what the going rate is is an important base for understanding the direction in which your career will develop, and what you should expect in remuneration as it develops. But, I feel it is foolish to go into that negotiation and say "salary averages say I should earn X, therefore, pay me X."" You should be delivering significantly more value than market rates! Market rates for your skill level should be a salary floor. Surely you can deliver far more value to your company than a random developer who walks in the door. I know I can, as a fairly average developer, easily outperform top developers because of all the internal knowledge, market knowledge, and customer knowledge I have built up over the years. If you aren't worth market rates in your area then you should consider changing jobs because your company is clearly getting you to do low value easily replaceable work.

pmorici 12y ago

"You owe it to yourself to know what your ‘market price’ is" The article provides fine high level advice but doesn't get into how to get this 'good data' on your market price. Is glassdoor good data? Because my general impression is that it is not very accurate and probably skews low. What are some other sources of this information?

cagriaksay 12y ago
Glassdoor indeed skews low and gives you a wide range. There are other sources: salary.com, payscale.com and also my own startup https://salaryfairy.com https://salaryfairy.com Instead of giving the market price for a company/job title, we aim to give a market price for your own background and skills.
- claar 12y ago
  I started using SalaryFairy after seeing your link here -- nice site! I understand the "collective intelligence" angle you're going for. However, the way SalaryFairy is implemented seems to "taint" the collective intelligence, at least in my case. After predicting quite a few salaries, my score was -9 because apparently my predictions were different from the "crowd" predictions. This negative score is encouraging me to "guess" the crowd predictions, rather than simply make my best guess as to what the salary would be for the given prediction. Since I noticed that my guesses are, on average, quite a bit lower than the "crowd" guesses, my new "strategy" is to guess the salary, then pad it $10-$50k to improve my score. This seems like a bad thing when it comes to the "collective intelligence" goal of the site. Just a thought -- hope it's helpful.
  - cagriaksay 12y ago
    It's indeed very helpful. Predictions should be independent for wisdom of the crowd to actually work. But we did introduce this dependency by revealing crowd predictions after yours as a tradeoff. We want to give feedback on how our users are doing, so that they're incentivized to continue making predictions. Sometimes what you see as crowd prediction could be just a couple predictions. As new predictions come in, we adjust individual scores. We are planning to hide scores until a healthy number of predictions are made on that profile. That should help a bit on the dependency issue. We are open to suggestions as well. Thanks for the feedback.

asgard1024 12y ago

The problem I see with the article is that it focuses on rationality of monetary payment and ignores wider perspective of human thinking, which includes fairness, for example. I never had to ask for raise at my job (for several years), but with the change of my boss, it looks like I will have to. I'm actually pretty happy with the money; what I more concerned about is the feeling of being treated unfairly. My boss, unlike me, has all the information, so he can decide to treat people around him fairly. If he does not, and makes these decisions based on what people ask him, then he is certainly not being fair. Then, why on Earth should I want to work for a person like that? Doesn't that kill motivation too? In other words, what's wrong with wanting to stay humble about your work (there are many articles that ask engineers to be exactly that, and it's certainly a great characteristic for a coworker), but at the same time, demand fair treatment?

_yosefk 12y ago
What's wrong with it is one is likely to be paid less. Theoretically I'd love to work at an environment where you're paid fairly without having to negotiate, and where negotiation skills would not affect one's compensation. However, wherever productivity is hard to objectively quantify (which is very often the case), the compensation is unfair out of statistical necessity (errors in attempts to quantify productivity are much more likely than no errors.) Negotiation skills will thus necessarily impact compensation because they're basically about convincing that you're worth more than you're paid and employers cannot be "immune to convincing" because they have no truly objective criterion to rely on. Another angle is that there are many things worth working on in environments where fairness is not only an elusive goal, but not even something the employer aims at; rather, they aim at minimizing their expenses, or out-negotiating you for the sport of it, etc. You can stay around for a while, underpaid, and then quit and not work on that thing anymore; or you can negotiate a better deal and stay and keep working on that thing. Sometimes you might prefer the latter. Another scenario is, your skills are uniquely valuable to someone who minimizes expenses rather than maximizing fairness, and the best deal you are likely to get for yourself is by negotiating with that party.

paul9290 12y ago

Use recruiters to get the best deal. If your a web designer, developer or software engineer I'm sure your getting one recruiter a day to a week offering you X job. A lot of ppl don't like to deal with recruiters but for me I'm flattered and think I don't need them now they need me. Thus when they ask how much I seek for their opportunity I significantly jack up my rate. Doing this has led from going from one company(every 2 years) to another each time making significantly more money. Though one company I worked for learned I was going to take a better offer and matched it.

tonyedgecombe 12y ago
I've never had a recruiter that worked hard on my behalf, every one wants to do as little as they can get away with.

SixSigma 12y ago

In MIT's book [1] on negotiation strategy they suggest that instead of bartering on a figure one should negotiate a way of determining the figure. That way you don't have a numerical anchor and you also have a mechanism for the future. [1] http://en.wikipedia.org/wiki/Getting_to_Yes http://en.wikipedia.org/wiki/Getting_to_Yes

sweettea 12y ago
The authors were actually part of the Harvard Negotiation Project, not MIT, and the book was published as far as I can tell with no university affiliation.
- SixSigma 12y ago
  Oops, my mistake, and it's there right on the first line of my link. I read the paper version :)

bane 12y ago

I remember my first full-time salaried job. I had just graduated college and before that had been working hourly part-time and internships and was thrilled moving onto a salaried full-time position calculated at basically the same rate as what I had been earning. About a year into the job I accidentally came across a piece of private paperwork a less experienced co-worker left on the shared printer that had her salary on it. It was almost twice what I was making! I started a campaign to fix this discrepancy. I started keeping track of every task I performed, even little one-off tasks, and also the impact that completion of that task had. I often found that the tiny half-hour one-off tasks I was taking care of without a second thought were generating huge returns on efficiency for my company. A simple script that turned a 40 hour a week copy-and-past data entry job that was eating into corporate overhead into a 30 second run-once-a-week thing was freeing up an employee to work on higher billable hour tasks. I was not only saving the company money, but making it money by pinpointing and automating problems in their business processes. The next evaluation period I walked in with a 20 page print out of every task I had worked on in the last year, what it was, and how it had impact on the company's bottom-line. I asked for as big of a pay raise as company policy would allow. It worked, and it continues to work everywhere I go. Having an irrefutable record of your value to the company makes it impossible for them to turn you down. And when they do, you now have an excellent archive to use for resume filler when you go looking for your next job. Things I never do: - threaten to go somewhere else if they don't give me the raise, this is implicit. If they don't give it to you, leave the company. Simple as that. No threats. Managers don't like it and it's just as likely to backfire on you. I guarantee they'll muddle along somehow without you. - get upset, what employees are paid is a complex business that you can only ever really understand when you're in the position to be paying them. Sometimes you'll end up getting paid less than an employee in a similar position. It sucks, but sometimes there's reasons for it that you aren't privy to. Don't compare your pay to others too much, compare it to yourself and where you want to be. - demand pay that exceeds what you should be making in that position in that industry. It sucks, but if you work phone tech support or are a receptionist, you're not going to be making $250k/yr. If you want to make that kind of money, ask what the requirements are for that job then pursue them. Hold the company to that claim. When you fulfill those requirements, if they don't pay-up, move on. Congratulations you are now qualified for a better job at a competitor. - take a raise, then quit immediately. I feel this is a point of honor, if I make a big fuss and my manager goes through a lot of trouble to get a silver bullet for me, I feel like I've just made at least 12 month commitment to them. You'd be surprised at how important this has been for me career-wise many years later. I've had old managers who've hired me back at new companies (or give me open offers) just because I stuck around after they put their neck on the line for me, even when the work environment sucked. As a manager it can be difficult justifying huge percentage pay increases for your people (my 20 page list of completed tasks usually helped them significantly). - ask for it based on need. "I need to make more money to make my rent". I did this once, and my manager responded with, "well you should live in a cheaper place". And that was the last time I tried that. Your company is not responsible for your personal spending habits, full stop.

steven2012 12y ago

I think Nadella chose his words poorly, but I thought his gist was that "I envision a time when people, both men or women, will not need to ask for raises because it will come naturally." I don't/can't believe he is sexist in the sense that he thinks women should just sit back and wait for their paymasters to bestow a gift onto them. That being said, the last person you can trust to give you a raise is your employer. I don't think it's out of maliciousness, but it's just reality. It's a rare boss that actually cares enough to guide you and to push you to make your career better, because that means they will be losing you. I've had 1 of those bosses, when I first came to Silicon Valley, and it affected how I look at things. The rest of my bosses just want me to make their lives easier. They will pay me well and treat me well if I make their lives easier, ie. add new features, fix bugs, handle customer escalations, and I'm grateful for this because they've treated me very well. But things like raises, career growth, it's rare that managers think too much about this, because it's precisely the type of thing that makes their life worse, because if you grow out of your current role, they will lose you. The other part of this equation is that you need to be able to properly evaluate yourself. If you're just average, then you deserve market rate, because you're easily replaced. But 80% of all people think they are above average, which causes friction. If you're really good, then you deserve higher-than market, but everyone else should get market.

s0uthPaw88 12y ago

What I like about this article is that it points out that human capital is a marketplace. No matter what you perceive your value or worth to be, your worth in the marketplace is only what you can get someone else to compensate you for. If you feel there is a discrepancy between what you are currently being compensated and what you are worth then it is your job get fair value for your skills. Either you prove your worth to your current employer or you find someone in the marketplace that is willing to pay the price you have set for your skills.