NEW YORK (CNN/Money) -
Businesses are budgeting pay increases of only 3.3 percent, the same as last year, according to a recent survey by Mercer Human Resource Consulting.
The outlook for 2005 isn't much better as employers have budgeted average pay increases of 3.5 percent, the fourth straight year raises have averaged less than 4 percent.
"Employers are seeing some signs of an improved economy this year, but they're not ready to commit to higher pay increases yet," Steven E. Gross, leader of Mercer's U.S. compensation consulting practice, said in a press release accompanying the report.
The report also notes that the gap between pay increases and inflation has narrowed to one percentage point over the past few years thanks to higher unemployment levels and greater reliance on incentive-based pay structures.
None of this means you should settle for less than you deserve. Asking for a raise can be a tricky subject, but there's definitely a right way to do it.
1. Timing is everything.
If either you or your boss is frustrated, it's not the time to ask. Here's a scenario: You've been working long hours and pushing hard to launch a new product. The project required more work than you expected and you don't feel you had the necessary support. And to top it all off, no one seems to notice how hard you've worked.
It's time you let them know you deserve better, right? Wrong!
CNNfn's Gerri Willis shares five tips on helping you get the raise you deserve.|
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John Gray, author of "Men Are From Mars, Women Are From Venus" and "How to Get What You Want at Work," says the victim mentality never inspires a raise. If you're frustrated with what you've had on your plate, why would your boss want to give you more responsibility?
In fact, they might recommend you take on less because you're not a very happy camper. No one wants to give you a raise if you're not happy with what you've got. You want management to know you appreciate the job and that you want more.
Also, if your boss is extremely busy or under a lot of stress, they're more apt to say, "this is isn't a very good time." Pick a time when you and your manager are most likely to have a positive, constructive dialog about your performance.
2. Know your worth.
Know the "going rate" for your services. Knowing the industry average for your job description can help you gauge whether you're asking for an appropriate amount of money.
There are plenty of Web sites that can give you and idea of what people in your particular position and geographical region are taking home. Try www.salary.com, www.bls.gov, and www.jobstar.org to get an idea of what you're worth on the open market.
3. "I need" is a BIG no-no.
Never, ever utter the words, "I need more money." Raises are given based on performance, not as charity or as a favor.
You have to convince your manager that you deserve more money. If your hard work has increased your department's performance, point it out. Or if you've generated more revenue for the company, inform your boss.
"Some employees don't get raises because they assume someone will notice their good work. They don't realize they have to motivate their boss to give them a raise," Gray said.
Then state your terms. If you feel your performance warrants a 5 percent raise, but your boss offers you only 3 percent, say "5 percent would work for me."
Gray warns that you should be prepared for a "pregnant pause."
"Even though the situation may feel awkward, resist the urge to leave the room and tell them to think about it. You want negotiations to continue and you want them to stay positive," he said.
If your boss says no to 5 percent... ask your boss what would work for him.
4. Rehearse your lines.
Pay negotiations shouldn't be undertaken "on the fly"; preparation is essential. Rob Stearns, author of "Winning Smart after Losing Big," advises practicing your speech with a partner.
Even if you are met with some not so constructive criticism, keep your composure. You may have an unfair boss--be it a bully or a crazy one--so it's important for you be prepared for whatever comes your way and to remain professional.
5. What if your boss says no?
If your boss says no to your 5 percent raise, don't let the discussion die. Gray recommends asking what it would take for you to get that raise. He says you should walk out the door leaving your boss with the impression that you're happy because you now have a direction and a plan to achieve your goal.
Stearns says you should also think creatively about what would make you happy. That means not thinking only in terms of money.
"Could they give you a company car, a club membership or even pay for some classes?," he said.
Your boss may appreciate your flexibility.
Gerri Willis is a personal finance editor for CNN Business News. Willis also is co-host of CNNfn's Open House, weekdays from 12 p.m. to 12:30 p.m. (ET). E-mail comments to firstname.lastname@example.org.