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I was planning to ask my employer for a salary increase in the next few weeks. I was in the process of putting together some salary market research for comparable roles in my industry. (I believe I'm in the lower 25th percentile and would like to be in the top 50th percentile on average). This would amount to a $16K - $20K per year increase.

This morning my manager (along with his manager) called me into his office and expressed how happy they were with my work and that they really appreciate me. They offered me a $3,500 per year increase and had all of the paperwork ready to go.

I was caught off-guard and wasn't prepared for this conversation so I expressed how grateful I was but that, "I would like to take a couple of days to think about it". Obviously they both had perplexed looks on their faces and my manager said, "Well... Okay that would be fine I suppose.", and it felt like the meeting ended in an awkward way.

So my question is, would it be appropriate for me to now give them my market research and tell them I would actually like five times what they offered? (Obviously with better wording).

Some background if that's helpful... I've been with my employer for almost five years and we receive annual reviews & cost of living increases each January.

I was promoted to a supervisor position last fall but didn't receive an increase at that time. (In fact, in January I received a 2% increase along with most everyone else).

I get great feedback from the leadership team as well as my former coworkers who I now lead as a supervisor.

I've been working in the I.T. industry (software) for about 14 years and our company is doing very well.

Last year I declined several job interviews (and I suspect they would have paid more) because I enjoy this work environment and the quality of my coworkers.

Update

I decided to follow Garrison's advice and the meeting was amicable. They understood my desire to take time to think and they were very gracious as I presented my research. I did not bring up past interviews I declined, and kept the topic focused on how I can "get to that mid to upper middle part of the salary bell curve". Unfortunately they disagreed with the accuracy of the research and told me they believe I'm actually paid quite competitively.

My next steps will be to accept the increase (which cannot be negotiated any further) and test the assumption that I'm already competitively paid myself in the marketplace. While I don't want to leave, I want to be paid fairly.

If it's helpful, I currently make $51,500 and with their increase I will be making $55,000. I do full stack web development (php, JavaScript, CSS, sass, jquery, etc). I believe the average in Austin, TX (where I'm located) is hitting in the mid $70k right now for someone with my experience.

  • Did you do your market research at work? Could that have been picked up on by HR/IT/Management and prompted the salary increase? – mkennedy May 19 '14 at 23:21
  • @JoeStrazzere My manager didn't say this raise was for my new role, but I assume that has contributed to their prompting. I believe I was underpaid in my previous role, so even more so in my current role. Another way to phrase my question might be "would it come across as rude or unprofessional to reject a raise that I didn't even ask for? Would I come across as ungrateful?" – user19615 May 20 '14 at 0:09
  • @mkennedy I actually just started my research at home (only) last week. – user19615 May 20 '14 at 0:10
  • @user19615 - What sort of pay difference ( in percent ) are we talking about. How much is the $3500. If you have 14 years in the industry why are you in such a low percentile position? Are you prepared for the more demanding tasking that $16K+ brings to the table because its very unlikely you will remain in the same position at the company and get that sort of increase. Your looking at about 5x the raise they offered thats pretty extreme but you seem to understand that. – Ramhound May 20 '14 at 13:46
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    @user19615 If you're in Austin, the market is hot, and they probably realize that. If they're not willing to get you to market level in 6 months, I'd highly suggest looking--you need to take advantage of that hot market while it exists. – Garrison Neely May 20 '14 at 19:34
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This is a tough one. They unknowingly pre-empted your attempt to get a market-based raise. And now you look like an ungrateful employee for declining what was an unrequested raise (and something your managers were probably really excited about giving to you, since you're well-liked and under-compensated).

I wouldn't let this fester any more. Finish your research and put it together in a document that you can go over with your manager(s). First thing tomorrow, request a meeting with them, and follow this pattern:

  • Open the meeting with a "thank you". Mention that you are super-appreciative of their offer to give you a raise without solicitation.

  • Tell them that you have been thinking about your compensation for a while, and you really enjoy the work environment and your coworkers (including your bosses!).

  • You've done some market research, and you were planning to have a conversation with them once you had completed it. But they beat you to the punch!

  • Tell them that their offer is a great starting point, but you think the market rate for your position and experience is X. Tell them that you're willing to ramp up to X, but that you'd like to put a plan in place to achieve it, and get their buy-in and signatures on it.

  • Offer that you'd like to accept their initial offer of Y, but that you'd prefer to eventually be at X, and you'd like to be given a concrete timetable of when you can reach X, understanding certain goals must be met.

At this point, their response could vary. I think that since they were going to offer you an unsolicited market increase raise, it will still be positive. It's going to be a bigger number than they're prepared to pay at once (obviously, since it's 5X their offer), but showing your willingness to work towards your number incrementally and not all at once shows your commitment to the company and them.

If they respond negatively, perhaps it's time to move on. I was in a similar situation where I was promoted to manager and was underpaid dramatically compared to my peers (and 5 of my 6 reports made more than me as well). The longer you stay at a depressed salary, the longer you are giving up earnings, retirement, future potential.

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    I tell interviewers that I rely on their firm to keep my comp up to date. My employers have their salary review and I have mine. If I make a determination after my own salary review that I am underpaid, I don't argue, I don't give myself a headache, I start looking. And once I find it, I am outta here - New job, new prospects, new stuff to learn, better money. What's wrong with that? My dissatisfaction with money is not an end in itself but a catalyst to try something new. What if my employer offers me a raise out of the blue? I'll take it and use it to get a better deal with my next employer. – Vietnhi Phuvan May 19 '14 at 23:56
  • Garrison, I really like this approach and I didn't consider negotiating to a path to that salary. Honestly, I don't know how they'll react. And I can't imagine what they may say I need to ramp up to, but I'll be open to hearing them out. Do you think if they don't budge or don't react we'll it would be unethical to smile and accept the raise (knowing I'm on my way out)? Not sure if accepting the raise implies to them that I consider the matter closed and I'm still happy. I'd be sad to leave, but I agree I might need to leave in order to make market. – user19615 May 20 '14 at 0:28
  • @user19615 Taking the raise does not imply that you are stamping your approval on the way you are paid. If they misinterpret that way, it's their business. If you take off, make sure to mention anything about the new opportunity that they don't offer. Anything but the money. Not unless you want to experience what it's like what it's like to leave in hail of rotten tomatoes. – Vietnhi Phuvan May 20 '14 at 1:10
  • @VietnhiPhuvan :) Definitely plan to leave graciously as I still respect everyone there and the opportunity they've given me in the past 5 years. That's great advice, thank you. – user19615 May 20 '14 at 1:43
  • @user19615 It's perfectly alright to accept an unsolicited raise, even when you are looking for a new job. You didn't ask for the raise, after all. If you don't attempt to negotiate, though, they will think the case is closed. If you leave for a better-paying job in the coming months, they may feel blindsided/betrayed ("why didn't you come to us first?") since you accepted without any attempt at negotiation. Give them a chance to say "no" to more money before you actively look. – Garrison Neely May 20 '14 at 14:07
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Before you even think of negotiating, you have to decide the minimum raise that you can live with, and you have to guess the maximum raise they are willing to give you when all is said and done. If the minimum raise you can live with is $8K and you the maximum raise you can expect to get out of these skinflints is $500 above $3500, then an attempt as negotiation is probably going to be fruitless and do nothing for you, except telegraphing to the management that you're bailing out some day.

If you are still willing to take the risk and go forward with negotiating , you could smile, thank them for their raise and then whip out your research. If they ask you what figure you have in mind, say that you don't know want them to make the suggestion first. If you can live with their suggestion, fine. Ask for a little more and stay. Otherwise, take what's on the table , smile and say thank you, and plot your job change.

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