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I started working at my current company as a Software Engineer about 2 years ago. When I received my offer, it was $5k less than what was agreed to during my interview and non-negotiable. However I was desperate to get out from my previous job and accepted it. My base salary was 50k when I started and I had about 3 years of prior experience. Meanwhile, a friend who left the company had no experience whatsoever when he started and they started him at 55k. PayScale.com says that I am in the bottom 6% percentile where the average salary for someone in my position, location, and with 5 years experience is about $76k. Salary.com stated just about the same thing.

Each year since my hiring I have received a 10% raise, since I do a lot and handle my job well. There have also been 5 people that left my project and the company since I started the job and I inherited some of their work/responsibilities in each case.

Based on what I do and the work I've inherited (which entails software, systems, & network engineering, along with some management tasks currently) I feel that I am still underpaid.
I've been thinking of asking for a mid-year raise either now or when I obtain my CCNA as I intend to do in a few months.

Is my plan of action advisable?
How should I properly approach this subject with my boss?

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    This article from CBS is pretty good and provides a lot of insight: cbsnews.com/8301-505125_162-44940298/… – chrisjlee Jun 2 '12 at 3:37
  • related: How can I determine a reasonable salary to ask for? – gnat Jan 26 '16 at 19:03
  • sadly, there's a lot of companies out there that have the work but not the money to pay for it. They may never be able to pay for it, but if they find someone who doesn't realize their worth, they'll keep them at that level forever. You have five years experience and you're not desperate. Brush up your resume and call some recruiters. – LeLetter Jan 9 '18 at 21:57
  • Just ask for it. Directly. If your job is worth more than your salary, then either your current employer or a new one will pay for it. Don't be afraid to leave if you see that your company makes no effort to keep you – David Mar 25 at 7:58
120

A 10% raise is nothing to sneeze at, particularly in the current economic climate.
It sounds like your employer already recognizes that you do a lot, and they feel they are compensating you for that work by increasing your salary at a rate substantially above simple cost of living raise (typically 3-5% in the US).


Having said that, if you want to negotiate for a raise you can certainly do so. I would definitely wait until after you complete your certification (CCNA would be substantial value-add), and ideally until your next performance review.

When asking for a raise you want to highlight your benefit to the company.
Some things to consider are:

  • What major projects have you lead/contributed to?
  • What major business goals have you helped the company achieve?
  • What roles are you currently playing in the company?
    (you mention a few, but when talking to your boss you want to be able to concretely say you're dong the work of X people/roles)
  • Have you helped the company make (or save) a substantial amount of money recently?
  • What specific job responsibilities have been added to your workload
    (Again you mention that as people have left you've inherited their work. Quantify this and update your job description to show the new work you're doing).
  • Has any work been taken away from you?
    (you mention you fill a management role - can you now delegate some of your original job responsibility?)

Weigh all of the above, and then think about what you would be worth to the company if you were in charge, balancing all the various expenses. Try your best to come up with a realistic salary expectation.


As for how to approach your boss, my advice is to set aside time and let your boss know what the meeting is about ("I'd like to talk with you about my salary" is a bit blunt, but "I'd like to discuss my future career path here" is a good way to bring up the subject.
Go over the outline you built using the above ideas, explain what more you want to do to grow in your job, and politely state that you are happy you've been growing in your responsibilities and feel you can do more work but would also like increased compensation to reflect your broader job description.

Be prepared for any answer (Yes, I need to talk to someone above me, Not now but maybe in X time, or even a flat-out "No") -- think about how you'll handle any of these responsess politely and gracefully.

Whether or not you name your target number is really up to you -- I've been fortunate to work for very good bosses, and typically I tell them I trust them to set a fair compensation number, though if that number is less than I am willing to accept I won't hesitate to say something about it.

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    What major business goals have you helped the company achieve? and how much revenue was tied to them, or better profit. +1 – Joshua Drake Apr 27 '12 at 14:32
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    Not every function can say how much of company profit or revenue is driven by my work. I am in charge of the complete product - the only one based on which the company sells its services, but that doesn't mean i drive 100% of profit. – Dipan Mehta Apr 27 '12 at 17:04
  • @DipanMehta As an employee you may not always know how much profit (or even revenue) your work generates, however you would know that you made substantial contributions to Project X, and hopefully you have some idea of how important that project is (number of clients using it, volume of traffic it generates, etc.) which are things you can bring up. Ultimately someone above you in management will assign a value to the work you do. – voretaq7 Apr 27 '12 at 17:22
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    Also, sometimes i may be just lucky that product is a hit in the market - but other folks who put in great effort but some other (markettting or environment concern) make it bad this doesn't mean people who are responsible in the respective product will have relatively that much rise. Almost always, support functions dont even has profits linked to thme, only cost. – Dipan Mehta Apr 27 '12 at 17:31
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    It's probably worth noting that arguing that you work on projects that are worth a lot of money isn't completely necessary. As a "grunt" it isn't really my job to figure out what is and is not a high priority project or how much it effects the bottom line. My boss sets those priorities. I think the better approach is to simply show your boss that you are adding value to their priorities (which they naturally value), by being really good at the tasks they assign you. Just my two cents... – Jay Carr Mar 30 '16 at 1:45
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You claim that you are doing a lot of critical work and your boss is giving you 10% raises which are extraordinarily high raises for most companies.

Companies that reward hard work typically do it in three ways:

  1. Bonus - lump sum short term reward for effort or performance

  2. Raise - Long term reward for effort, performance, promotion, or increase in responsibilities meant to encourage retention. Typically anything over 2% beats inflation.

  3. Perks (Special parking, gifts, additional vacation days, etc...) - Short term reward when budgetary concerns don't allow for raises.

When a company gives a 10% raise they are making a significant statement that they trust you, they value you, they recognize just how much you are accomplishing and they really want you to stick around. This isn't anything that should be too suprising because it seems like they may have a problem with employee retention and they really want to stop the bleeding.

You exude feelings of being treated unfairly and that might be related to them promising you one figure at the interview and then taking back their word when they presented the offer. Fair enough, but consider that a major concern for most employers (especially ones that employ software engineers) is that it is very hard to identify the perfect employee from the incompetent one. Many deal with this by paying people less and working on a trial period until they have learned to trust you and your abilities. Again the fact that you get 10% raises more than shows their confidence in you.

My conclusion is that you are just overworked and burned out, and you mistake the failed notion that more money will make it more tolerable.

It won't.

I get the impression that the extra work the stress and the responsibility of your position are taking toll on you and this is the real reason for your unsatisfaction. Of course as a company it is a lot easier to throw more money at a problem than take proactive steps to remedy the situation by making a concerted effort of bringing on more talent and fostering an environment that encourages natural employee retention.

Studies have shown that when it comes to workplace motivation and happiness, salary is not an influence, it is a pre-requisite.

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    +1 for the possibility that you're burning out. Take a hard, objective look at yourself and your workload: If you are REALLY burning out take steps to stop it now. All the money in the world means nothing if you don't have the time and energy to enjoy it. – voretaq7 Apr 27 '12 at 17:25
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    I'd like to add in reference to maple_shift's answer that everyone within a certain salary range received the same raise regardless of their performance. There were people that barely did any work and received a 10% raise as well. When I was still working for this company they would do a performance review each year, but it made no difference if you scored high or low. Upper management was given a raise pool and they evenly distributed it to everyone solely based on their current income as I found out at the time. – THE DOCTOR Feb 3 '15 at 18:09
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    10% is pretty good, but 10 % of a not so good starting salary is easier to give than 10 % from a market salary. – dyesdyes Jul 6 '15 at 16:21
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    @msouth I went to my boss at the time and spoke with him about the situation. Prior to this, I spent several days researching what my position ought to pay based on several salary data websites. I started off by talking about how I had taken over the work of people that left and how I am benefiting the company, then I mentioned salary data. He agreed with my points and spoke to HR. A few weeks later I was informed that I would be receiving an $18k raise. The moral here is that if you know you truly deserve more, you should respectfully ask your boss for an increase rather than staying quiet. – THE DOCTOR Nov 21 '15 at 2:21
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    @THEDOCTOR Wow! Thank you for answering, and congratulations on an excellent negotiation. I can't remember what the SE rules are, but if it's considered kosher to add a section to your question "How I Proceeded", I think this would be of great interest to people with the same question. – msouth Nov 23 '15 at 14:37
31

here's the process I'd go through:

Know your Worth

  • What are your peers in the industry making? - not just "software" but in the specific technologies and in the business sector in which you are working.

  • Can you get a more competitive offer? Not always worth the time it takes to interview and get an offer in hand, but before you demand over the top money, you may want this.

  • The 5 people who left - what are they making now?

A low offer and then 10% raises per year says to me that they do value you - at least in my region and technology domain 10% is quite generous - it's on the "top performer" end of things.

The goal is to get a bit impartial and to see yourself as a commodity - not a person. You, as both an individual and as an employee, have a market rate.

In finer grained detail, that rate may also include considerations of personal detail. For example, when I made a recent job change, I had to account not only for salary, but commute cost & time (varies remarkably in my area), educational opportunities, and other work/life benefits. I got job offers that were both $10K lower than my current total position, and $20K higher - when you consider their net value and not just the salary (salary alone would have ben -$3K to +$10K).

Know what they can Pay

Sometimes you don't have to be psychic, this can be talked over with a boss or other trusted senior person in the company. Before you walk in, you probably want a sense of what they can afford to pay. If your company is struggling to make ends meet, or needs to pump out a product before the venture capital dries up, the "I want more money" conversation may go very badly. However, reworded to "I want a better trade off" may go well - there's more to life than money, and changing the quality of your commute, having better tools for your job, or opportunities to better your life in other ways (more vacation time?) may be even better than money in the bank.

Know what it will mean if you leave

You may be so skilled and so awesome that you can increase your salary by 50% if you leave. But the company may say "OK, go" - because in their model, they can get another, cheaper version of you for your current salary. Some business models work this way. Some companies build in a model for turnover. They are not necessarily evil, they are pragmatic. This is something to look at in the big picture - what is turnover like in your company? What's the culture? Is there weeping, wailing and shock or a bland shrug of acceptance? Is the "employee intake machine" always humming?

Also know what it will mean for you - are you in a place where a change would be good? Is your skillset up to date or threatening to become obsolete? Moving every 2 years isn't usually the best solution... but it may be the right time.

You don't have to plan to leave just because you want more money - but know yourself before you have the meeting.

Negotiate

The secret to a good negotiation is that both sides should "win". In a perfect world, each year, you get more money and the company gets a better employee.

All this background research is there to position you to have a conversation with your boss that has the tone and the effect of generating this win-win condition. You don't want to come in defensive or offensive - you want to present a problem and work towards a solution.

Problem - you're concerned that your salary is not compartive to the salary you could make elsewhere, so you are missing out on an opportunity to make more money. You like the company enough to want a raise and continue to work there, you don't really want to leave. You're aking the boss, cause he knows how to get stuff done, and you want his take on what's a reasonable way to come up at this solution.

Be open to whether the expectations are higher than you thought, and that there's other expectations you haven't met - and look for direct feedback on what those are, and how to get there.

By being open to the conditions for success, you open up a lot more options to getting a good reward.

Set the Scene

This isn't a trival discussion. Money and compensation are generally deeply personal and connected to value judgements and other uncomfortable territory. Give your boss the opportunity to give you his undivided attention and full focus and prep him a bit. Things I'd do:

  • set up a meeting, don't just wander in, give it at least a half hour, and hour isn't too bad.
  • find a space with a door that closes (your boss hopefully has an office, but these days, that's not a certainty)
  • start with the closest, most direct reporting boss (in companies with lots of management, this is the guy most responsible for your tasking and day to day tasking)
  • keep it private - if you have a trusted friend at work, chatting amongst the two of you is fine, but don't make it a group-wide conversation.

Mileage variation

Some of this is definitely US-centric in nature - employee/boss communication, norms about salary, and negotiating tactics are all very culturally dependant.

  • Thanks for your response. You bring up many good points which I am going to take into consideration. – THE DOCTOR Apr 28 '12 at 3:15
  • Note that a company doesn't need to have the ability to fire you built into their business model even if you're the only [employee who does x]. To most companies, you are never indispensable, even if you feel that way; firing someone (or letting them quit rather than giving them more money) is a decision made by human beings, not by computers, so you always need to consider that it can be and often is just as nebulous a decision as the 'feeling' of being underpaid. – kungphu Aug 24 '16 at 0:38
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    I would never go down the road "what the company can afford". Know your worth and then see that you are paid exactly that. Every businessman understands the concept of opportunity costs. And you would not expect to get you laptop for 50% of only because you are currently unemployed etc., would you? Selling your time for money is just the same. – Daniel Aug 10 '17 at 15:29
  • @Daniel on the other hand: special priced laptops for students are a thing, so there is some leeway, because it is not a perfect market. There are not infinite many positions and employees - so if there are 20 posititions for your skillset in your hometown and 10 of them pay less, because the company cannot afford the market rate, 10 people will most likely still fill the position instead of changing town... – Falco Sep 11 '17 at 12:45
  • @Falco: Discounts for Students are Marketing costs, not "leeway". Any Company will pay as much or as little as they have to, as long as they still expect to money on the deal. If the 10 company´s in your example find someone working for that kind of money, they do in fact pay the market-rate and not less. Once you get to the "The company had a bad financial year" vs "I have to feed 3 kids" kind of debate you have lost... – Daniel Sep 11 '17 at 13:46
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There is a saying (I found in my VP HR cabin) :

If you do what you always did, you get what you always get.

May be this might sound a bit unpopular advise - but it seems to me that your real concern is not appraisal. Say for example instead of 10% they might agree with 15% but over a quarter that is not substantially going to change your lifestyle (unless you are in a very serious bottom of the salary). Also, organization can't really go over the board and think just about you.

But that doesn't change what you are feeling.

You have got a very good command over the current job, and looks like you have been there for sometime; you have done good job and you have been appreciated duly by the management in words and at least reasonably well in terms of money. But, it still doesn't seems like you are not on the top of the world - now what?

This is a symptom that no incremental progress will keep you happy. What you are essentially looking for is growth - more so a leap growth. What you should look for is not to get max out of the salary band, that would still be only marginally high. You should essentially look for hunting next level.

If indeed this is the problem, here is what you should do:

  1. Ask a senior what will be the next level for me.
    What kind of position, capabilities are involved, and what all choices exists in the practical scenario?

  2. Find out what is the essential skills you need to acquire to get qualified there?
    Ask this in terms of something specific, something you can focus and demonstrate in the current work, specific training etc.

  3. Find out what is the horizon.
    When is the general time frame expected in the company that you will attend there? Some well managed companies might have a clear cut idea, but chances are till you ask them, no one would be sparked with the idea!

In essence, you should ask management for next level.

Every management feels happy when they see kids have aspirations; and every management gets terribly frustrated when they see kids want so much money quickly.

This is a nothing but a paradox in reality, but I have seen this way too often. Instead of focusing on money, you should focus on growth and everything will look nicer. Most often then not - growth will translate into good bucks automatically.

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    I am not looking to max out within the salary range that is appropriate for me. What I am looking for is to be properly compensated based upon my experience and current roles. This is in relation to my research of market data regarding salaries. Knowing that I am underpaid based on these statistics is a bit discouraging. I have had discussions with my boss regarding career growth, but that's a whole other issue. My company has a very poorly defined hierarchy and a title change is practically unheard of as they put next to no priority in such things. – THE DOCTOR Apr 27 '12 at 20:26
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    If you are having consistent growth but still below market average, the company itself could be below average in market. Next level doesn't have to be different designation, it can just be larger project or responsibility. If neither works for you, your best bet could be to switch rather than keep negotiating. Negotiation generally works once or twice not more. – Dipan Mehta Apr 27 '12 at 20:40
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I prefer the uncomplicated version. Get offers from other companies that you'd be happy working for. See if your current company is willing to compete with those offers. That takes the personal/value judgment factor right out of it and makes everything strictly business and you have a plan B if they don't want to pay more.

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    I prefer the super uncomplicated version of this. Get another offer and leave. Do NOT give your current company the option of keeping you. They're underpaying you. You know it, and they know it. And they're taking advantage of the fact that asking for more money is uncomfortable for most people. You can certainly pull 70K somewhere else. Go do it. – Kevin May 10 '12 at 23:30
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    Well, sometimes you can like everything but the twit who controls purse strings. – Erik Reppen May 11 '12 at 5:57
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My approach would be to focus first one the work and slip salary in "after" that, so I would schedule regular review meetings, say quarterly and at each one, make sure to ascertain:

  • What you've done well
  • What you've not done well.
  • What could be improved
  • Other questions that you think will hep in your quest (but not salary).

After 2 or 3 of these, from which you've got a clear, documented track record, and if the feedback is good, start to say "well, given that I'm doing a good job, I wanted to discuss salary. I think we can both agree that I'm underpaid, right?"

1

Don't. You're getting 10% raises, which is pretty much unheard of for the vast majority of workers. The chances are that someone in management argued against those raises (and lost), and those folks have long memories. If there's ever a problem that you need that person's help with, you'll start out with two strikes against you.

The only way to get a raise of any consequence in this day and age is to get a new job. Do your research, work your network, update your online presence. And under no circumstances allow your current employer to know you're looking; there is no reason to tell them, and you always want to leave a job on your own terms if at all possible. If they find out you're looking, they may do nothing - or you may find yourself on the curb with all your stuff in a box. The conventional wisdom is also to not accept any counter-offer, as there's a good chance that you'll only be there as long as it takes to replace you (employers don't like being extorted, and you'll also be perceived as disloyal if your company is particularly bad).

(This all assumes this is an American company. After workplace safety rules and wage laws, the only right you really have is to walk.)

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My suggestion is to join a union.

By yourself, you only have your own power against the might of a corporation. However, by unionising you will have the collective power of a union behind you and will be able to collectively bargain for better wages and entitlements. You should not have to do this by yourself, as bosses will often try to pressure workers into accepting lower salaries than they are entitled.

The union will also be able to advise you of your rights in terms of pay, health entitlements, leave entitlements, overtime entitlements, superannuation, etc. which Salary.com most likely can not accurately compare.

Good luck!

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    Unionizing helps if the whole company feels underpaid and/or working under bad conditions. But a union won't organize a strike just because one single member feels underpaid. – Philipp Oct 23 '17 at 9:12

protected by Chris E Dec 12 '16 at 16:40

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