Negotiating Your Salary after Your Annual Review

Annual reviews can be ordeals, or vindications of your hard work and performance. If you want to ask for a raise, however, you’ll need to do your homework, and consider the possible results of your request.

Issues with Asking for a Raise

There are some very practical issues for employers with giving people a raise:

Does giving you a raise make business sense? This is far more important than whether you deserve the raise or not. Giving a star performer a raise is good business practice, and sets high standards. Giving someone a raise under circumstances where it makes many others eligible for raises, and doesn’t set very high standards, isn’t a good move.

Are you worth the extra money? You might be, and your annual review may be proof positive. The issues aren’t that simple. Bear in mind that the employer has to see the extra money as coming out of business capital. Does the employer pay you $10,000 a year extra, or buy the new accounting system? Which is more important, the state of the accounts section, or your income level?

Negotiating Wages

As you can see, employers aren’t being stingy for no reason. They need to see the results of any form of expenditure, before spending anything. That’s one of the reasons for wage negotiations. The employer must balance your legitimate requirement for pay with the best interests of the business.

Important: Before you begin negotiations:

The Big “Don’ts” of Salary Negotiation

Do not overstep the boundaries: Either in the relationship, or in your request for a raise. The mere fact of negotiation means the employer is willing to consider a proposal.

Don’t be demanding: It annoys people, particularly those who are trying to figure out how to give you a raise.

Do not reject any offer without genuine consideration: If you have to reject an employer’s offer, it should be for a good, irrefutable, reason.

Do not bluff, or try any of the “negotiation secrets” of the professionals: Those techniques are bordering on suicidal, for amateurs. They really are for professionals, and professional negotiators will see straight through them.

Do not quibble over minor issues: Stick to the main game. Quibbling looks weak, and can imply you’re prepared to argue about cents, which instantly devalues your own proposals.

Preparing to Negotiate

  • Research the business.
  • Figure out a reasonable proposal for an increase in salary which is viable for the employer.
  • Put your upper and lower limits in a bandwidth, to allow the employer some room to maneuver with counteroffers.
  • Give the upper figure of the bandwidth as your initial proposal, and state that you’re thinking of an increase of “no more than” your upper limit.
  • Organize your annual review figures to show a positive value relative to the raise, not your previous salary. This shows that your work is paying for the raise, and the employer isn’t losing money on the proposal. These figures should also show that your upper figure is covered by performance. 

In Negotiations

These methods are critically important to successful negotiations:

  • Check the counter offers thoroughly, find a real dollar value for packages.
  • Be flexible. Allow room for the employer to add to the counter offers. It’s possible the employer can provide a deal which will cost the business less, and be worth more to you.