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Commentary > Everyday Money
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Time to ask for more money?
You've been taking it for the team for a few years now. Maybe it's time to make a little noise.
May 6, 2004: 2:11 PM EDT
By Jeanne Sahadi, CNN/Money senior writer

NEW YORK (CNN/Money) - Okay, is now a good time to ask for a raise? How about now?

That's a question for many of us who managed to hold onto our jobs through the recession and help companies boost productivity despite a shrinking pool of coworkers.

What raises we did get, if any, were minor. Wage growth since 2001 has been far below growth rates in the 1990s, even after factoring in inflation.

So, consider this: it's a little harder now for bosses to plead poverty.

Corporate profits have been improving -- so much so that S&P 500 earnings are projected to hit record levels for 2004, said Howard Silverblatt, equity market analyst at Standard & Poor's.

And we're starting to see a few signs of life in the job market, which (with any luck) will translate into more opportunities to make a move. That may help raise-seekers. As in relationships, you're more desirable when there's a chance somebody else wants you.

But you know what? Even if the last few years had been great economically, it's unlikely we would've worn out the rug in el Jefe's office demanding more cash. Why?

Most of us are wimps.

Lee Miller, who headed human resources for corporations in the publishing and retail industries and wrote "Get More Money on Your Next Job," figures that fewer than 20 percent of us ever really negotiate for a raise.

So I asked him what it takes to become a member of the wimp-free minority.

Time your move. Now may be a reasonable time to consider asking for a raise. But, Miller said, "You have to lay the groundwork ahead of time. If you haven't done that, do it now."

Fortune.com
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Quiz: Do you deserve a raise?

By that he means, don't wait until your review to ask for more money. By then your manager has already committed to a number and told the powers-that-be. A request for a change thereafter will just make your boss look like he made a mistake.

Instead, plant the idea that you'd like a raise at least three months before reviews.

Know how the game is played. Your boss has a range for raises that he can award – say, 0 percent to 7 percent, with 4 percent as the company average. Generally, the top of the range is two to three percentage points above the average, Miller said.

The goal is to make sure that in the aggregate your department's raises don't exceed his budget. So, some people will get top-of-the-range raises, or even more.

A few months before your review, find out what your company average will be. If human resources won't tell you, use a projected national average as a gauge. Then add a few percentage points to estimate the top of the range.

Next, have a meeting with your manager, Miller said. Let him know that while you understand he did the best he could for you last year, you were hoping he could do better this year. Then offer reasons why you think you merit a higher-than-average hike.

If you think the top of the range is 7 percent, ask for one or two percentage points more, Miller suggested. If your boss balks, you might say, "Well, I hope you'll do the best you can."

Become an A-player. The job market is still far from frothing with opportunity. Headhunters say A-players have the best chance of job-hopping now, so get yourself noticed.

"No one looks after your money like you do," says Jeff Claudio of Crestview, Fla. And few have been so successful at looking after their money as Jeff and wife Leonora.
Email Millionaires in the Making: New York transplants to the Gulf Coast, Jeff and Leonora's retirement strategy pays off early.

Often a difference between an A-player and a solid, high-performing B-player is one of perception. Bosses know about A-players' accomplishments because the players' promote themselves or their colleagues and managers do.

So when it comes to raises, especially as the labor market improves, A-players are likely to get first consideration.

"If you're an A-player, (employers are) going to have real concern. If you're a B-player, they're not going to be as concerned," Miller said.

Get your game on. Work on your confidence, Miller said. Bosses will sense it and respond to it. "They'll want to make you happy," he said.

If it helps, keep yourself in the market. Never advertise you're looking for work, but you might occasionally send a resume to a professional contact if only to get a sense of what opportunities are around and what they pay.

 

Should another employer express interest in you, let your boss know – not in a threatening way, just as an FYI – and at the same time indicate you're not necessarily interested in the position.

The point is to show you're desired, not dissatisfied. "We all want what others want," Miller said.

You might also try these internal attitudes on for size:

"I'm very good. I'm the best at what I do."

"I'm going to do a great job anyway. Why not get paid more for it?"

"Either the company gets to keep it. Or I get to keep it."

And remember, Miller said, "People who understand how to negotiate are always going to do better."

Jeanne Sahadi writes about personal finance for CNN/Money. She also appears regularly on CNNfn's "Your Money," which airs weeknights at 5 p.m. ET. You can e-mail her at everydaymoney@cnnmoney.com.  Top of page




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