Pay raise, demystified

Recently, at work, I heard a lot of people wondering why managers in their company do not realize they should be given a pay raise.

Consider stock prices; if a prediction from analysts reveals that a stock price will raise from 90 to 100 euro end of next week, what is the stock price value today?

Of course, it’s 100 euro. If you check, it’s immediately adjusted.

When the announced expected change occurs, it won’t change the stock price. If the price would change, it will be because of another prediction for the week after.

It’s the announcement, or the idea, or the precious information about the close term future that affects the current stock market value.

Now think about your salary. Has it ever occurred to you that your boss called you at the end of the year, maybe during the Christmas party, giving you a strong handshake and a letter with a bonus or a pay raise announcement right from the forthcoming pay check ?

To me it happened. More than once, in my working life.

Did you thought it was a matter of kindness, a Christmas gift because the year was good?

You thought wrong, I think (you fool).

That raise was because of your company evaluation of your potential market value for the new upcoming year, and not for your already given effort.

Maybe because of your already given effort, your market value had changed, and as they realized that in terms of effective amount of business and money you could bring them in the forthcoming brand new year.

It’s never a matter of rewarding you, it’s a matter of keeping you in.

In order to prevent someone else from calling you and taking you for just the few amount of extra money your company has not given you yet, your employer raises your salary according to the new business plan.

The same applies when your employer is not giving you any raise (when others get it), or even commences to somehow manage to lower it. This is a good indication that they probably already know that your position is in trouble in the upcoming future, that you are out of company business games or simply that they prefer you to leave.

Thus, lowering your bonuses or blocking you salary would ease your choice of choosing an “at least equal” offer.

You current salary is not an evaluation of you now, nor a rewarding for your hard work; it’s already an expression of an evaluation of you in the near future.

As a result, it’s normally useless to ask your boss for a pay raise unless you don’t have real evidence that they are missing some point (e.g. you had another better offer from a competitor). There is a chance they had not “adjusted” you yet because of “bad timing”, but they anyway will have a “retention try” if you are worth of.

So, think about what your company is telling with tuning your salary or bonuses or incentives, then make your choice.

It’s extremely important you have at least as much as information as your employer about your business potential. Just carefully read indicators (“Oh, I was about to ask for more money and they cut my company car benefit!” someone told me once).

Would you consider a good move seeking for a job interview and working off your frustration by telling the new potential employer that “you want to leave your company as they failed recognizing you potential as they never gave you a pay raise since the day of your hiring?”.

Be as much as possible aware not only of your market value, of the business you can generate, but also of messages you receive and give away.

Are you are covering a key positions that could open opportunities to your employer or are you one of a team already sold for a cheap fixed three years turn key contract?

In the first case, just figure out how much your position could be worth of and ask for a huge raise. In the second case you have to options: be silent, grab the few money and wait for better times (which is no option for me), or try to give your employer new information about your effective market value.

Do you look happy or do you never miss a chance of telling others that your employer is crazy, as he do not realize how good you are?

Try convincing others that they had not really considered exactly your potential and market opportunities you could bring them, that they had missed some fundamental part of the equation. You must be very practical and really bring some real unexpected tangible opportunity.

Then, you can maybe ask for an adjustment.

Don’t look ridiculous to job market. Always measure your expectations with your effective market value. And never ever think it’s personal, that your company forgot about you or whatever other idiot reasoning.

Would you forget about your right wheel if you were a Formula 1 driver? I don’t think so.

Well, your employer would not forget even about the hidden microscopic invisible sticker behind the rear view mirror, if it’s worth some money.

But of course she’s not willing to pay it as a durable heavy rain wheel, as the race can be run and won even without it.

Are you a sticker? Find out how to convince your boss that is much better having stickers paid for ads and that sucking wheels do not really matter.

Are you saying it is difficult? Well, not more that turning a sticker into a wheel, imho.

Good luck.



Some others tell me about the fact that a pay raise is due as a result of workload increase. Normally there are two ways of selling workload increase to employees: changing the employee label (e.g. ‘from today you are no more a technician, you are a “key” technician, that mean that in our company you belong to a new mail distribution list and you name is bold in presentation slides’) or giving small bonuses. Bonuses shall be agreed at the very beginning, but be careful.

When workload increase is not a responsibility increase, company does not owe you any money, they are simply using you (as a resource) more effectively, so forget asking for a pay raise.



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