Everyone wants more money, and we can never seem to earn enough of it from working for others. Crudely speaking, the services you deliver has a pegged economic worth (no one works for free!) and this value is the financial equivalence of salary, benefits, and compensation combined.
Straightforward Requests For Higher Pay
Purely asking for a bigger paycheck out of the blue never works. Why? HR and your big bosses will reassess your employability and since you've been receiving X dollars to perform job Y for so long, there is no additional need to incentivize you to do the same job and deliver the exact same output. With every request for a higher salary, employees need convincing reasons to compel. Putting in straightforward requests to "reconsider your salary" is just a nice way to demand a larger income - it won't work.
What Value Have You Delivered?
Over the past year, did you beat your promised performance targets? Have you got more clients and revenue for the company? Does your team work more cohesively and deliver greater work with your leadership, involvement, etc.? Reflect to see the kind of worth you've proven yourself to be - don't sell yourself short, but honestly, set the exaggeration and self-praise aside. The concluding question you will be led up to is: "Has the value I delivered been underrated, and yeah - this employee should get a bigger paycheck?"
Give Compelling Reasons, Substantiate
Many say "work smart, not work hard". And to increase the positive perception of your management, you need to come to the battle prepared and equipped with ingenious ways.
The first way to increase the perceived value of your workplace performance (and thereby your worth at work), is to make your contributions more visible. Flaunt what you've done at meetings. Receive praise from co-workers and clients in public settings so people at work recognize them.
Another way is to become more proactive and think about what you can do at work as opposed to what you have to do. This way, your boss sees you outperforming in every situation and the company cannot afford to lose you as an asset to the competition. If you try to job hop or leave for personal reasons, you have a convincing reason - the company would try their best to retain you for you to continue stellar work for them, and not for other rival firms. "Your employer will not be able to replicate with anyone else in the world", this is the most credible reason and justification why you should get your current salary reviewed.
A third reason you can give to ask for a higher salary is the fact that you've received offers from other companies, but you've chosen to stay. If you're really sincere to your company and want to continue doing a good job, asking for a higher salary will be natural. Deliver the message in a calm, neutral manner - and this becomes the most effective reason because it's honest: no one would require or expect an employee to work for cheap, especially if they're driven, talented and in demand.
Counteroffer During Salary Negotiations
Any apt businessman will never take the first offer he is presented with. For your employer, you're just one of many employees to who he has to pay a salary unless you put up a fight. Since the benefits package involves many components such as the base salary, overtime rate, vacation time, and overall salary range, if you are not able to get what you want on one section, there are other sections you can counteroffer on another section of the package.
Comparing Pay Between Employees
Each salary request is and should be treated on a case-by-case basis. Therefore, your employer should not be benchmarking the number of days of annual leave against another worker for the sake of "the standard", nor should you compare your base salary with another worker's base salary. Things to consider are the role, your performance, negotiating skills, and value to the company, which is how you should counteroffer a higher salary.
Ask for Performance Bonuses
Employees should ask for a performance bonus because it will help them get ahead when they're doing well at work. Not only do bonuses pad an employee's compensation package on top of their previous salary, but they also give the employee a sense of pride and satisfaction from getting recognized for deliverance. It's one less thing for employers to spend on, and it translates into spending more freely on other things.
In order to receive a performance bonus, you set your own requirements - for example, top 20% by sales revenue. In addition to this, a performance index (i.e. Key Performance Index, or KPI) is a tool that your employer uses to measure your skills, qualifications, and job performance. This KPI is reviewed usually on a yearly basis as part of the individual performance review. If you have proof and examples of how you've contributed to your employer's bottom line for the past fiscal year, then a request for a higher salary will be more effective.
Increasing Your Starting Salary Based on Industry Salary
Having been in the role for at least half a year, it is prompt for you to request a review if the industry average salary has changed. If the industry average salary has increased since you began with your present employer, then you can ask whether it is realistic for the company to pay a competitive salary and make salary adjustments for you. The salary history taken by indexes like Glassdoor or pooled data on LinkedIn will reveal the average salary and salary range.
In the salary discussion with HR, you can ask for extra vacation days in lieu of salary if they are not willing to concede a higher cash outlay or meet your target salary expectations. Flexi work hours or requests for a transfer are more ways you can negotiate for something you want, and arrangements the company can easily meet. Using market rates is a great negotiation leverage tool to show your worth, benchmarked against other employees in the industry.
Salary Negotiations in Promotion Interviews
HR has an intended allocated salary range planned for each promotion. This budgeting allows the company to control cost more easily, so as part of the discussions, it is important not to insist on a dollar value outside the range since HR will never agree with it.
One of the most famous tactics, called anchoring, is where you are prepared and familiar with what previous employees in your position were paid. With your mention of familiarity with what your peers were paid, the HR will be reminded that "if you can get paid on par with your friends, why shouldn't I pay you as well?" This is also a good tactic to use if you find out what your peers in the same job are getting paid. You can also play off any tidbit of info the HR might not know about so that you can have some extra negotiating room.
Unlike your very first interview with your current employer, the hiring manager will treat external job applicants differently from if the position was filled by an internal employee. A potential employer is less likely to accede to a salary outside a range they are comfortable with as the new hire would not have proven their performance to deliver. As such salary negotiations for new job applicants are usually shorter and the discussion scope is more narrow.