Thanks for chiming in, Jason. Excellent advice. I'd offer the if-then proposition as a concession after an initial request for the cost-of-living adjustment/raise.
I am a director with a multi-national company and I just relocated to the U.S. from Europe. As a result of the move, I am now making less than I used to. Moreover, I know that I am being underpaid as compared to market levels, as well as company compensation levels.
Every time I raise this topic with my boss, he just avoids it. I have repeatedly tried to raise it, but he is not very forthcoming. I have tried to get behind this, and I believe it might be because I just learned that my boss overspent on his budget allocation.
I have a performance review coming up next week. How do I negotiate a raise successfully knowing what I know now?
I hope I’m answering your question in time for your performance review.
You say you believe that your boss may be ducking your request for a raise because he overspent on his budget allocation. That sounds like a savvy assessment, but the fact is you simply don’t know. And not knowing why he’s stalling is preventing you from having a serious conversation about the raise you need and deserve.
If you’ve already had your performance review and got a satisfactory raise, congratulations! If not, you needn’t wait until the next one.
Take him out for coffee or lunch. Engage in small talk that’s focused around him. How has he been? How’s the family? Is he having a good summer? You’ve noticed he seems a little stressed at the office these days. Is there anything you could do to help out with whatever work burdens he’s experiencing?
And if he tells you everything in the office is going well, that he’s made whatever performance marks he’s had to meet without undue effort? That’s great. You’re glad to hear it. How is everyone else at the office doing? The higher-ups? Is everyone meeting their budget and profitability goals?
If everything is just great, tell him you’re really happy to hear it because you need to talk to him about a raise that will bring you up to your true market value. Have a few comparables available to show him that you’re being underpaid. Tell him how difficult it’s been for you to adjust to the higher cost of living, and that you wished you’d planned on it and negotiated a cost of living adjustment for much earlier. But you’re doing it now, and you need to know if there’s anything standing in the way of that.
If he tells you how bad things are, that’s OK, too. Help him problem-solve. Make a few suggestions for ways you could help or that you believe the entire office could pitch in to increase efficiency. Tell him you’d be happy to throw the full weight of your wisdom, knowledge, skill, and experience at the problem. And you’d be much better positioned to do just that if your present needs are met—a cost of living adjustment and a raise that will bring your salary up to market.
If this sounds like a tough conversation to have, remember that it doesn’t have to be. Position the conversation not as a battle or competition, but as an attempt to achieve fairness.
Not only does framing your conversation this way set the standard for the “style” and content of the negotiation, it’s also more likely to result in a more equitable outcome—a result supported by a recent working paper published in the Harvard Business Review “Working Knowledge” series.
The Harvard economists explained the research using the term “guilt aversion.” If you’re being fair, calm, and cooperative, your boss will have a tendency to behave that way, too, in order to avoid violating the social expectations you’ve laid out. He also may be more willing to make more concessions—including monetary concessions—“to avoid breaking [the] perceived promise” of behaving in a fair, cooperative way.
In sum, frame the discussion of your salary increase as an attempt to achieve a fair result for an employee who has already shown her devotion to the company by relocating. Once you’ve done that, don’t be afraid to ask for your current market value.
Best of luck to you! Please let us know how it turns out.