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Leadership Today - Practical Tips For Leaders

Aug 25, 2023


It can be one of the most tricky conversations to have with your manager. This week we look at how to ask for a pay rise.



Hello and welcome to episode 198 of the Leadership Today podcast where each week we share practical tips to improve your leadership. This week we look at how to ask for a pay rise.

In a competitive job market it can be tempting to go for a job in another organisation in order to increase our pay. Often people find out that the grass isn’t greener and regret their decision to leave. It is worth at least asking whether a pay rise is possible before making a more drastic decision.

It is important to recognise that what you are paid is based on a number of factors, including your industry, your organisation, your role, and your contribution within that role. Industries pay wildly different rates for the same roles. Generally speaking, the more profitable the industry, the higher the pay levels.  Organisations also vary in their pay practices. Some will pay higher than their competitors, and others will pay lower.

People care about their pay compared to those in other organisations before they join an organisation. This is called external competitiveness - the extent to which an organisation is competitive against its peers. Once they’ve joined an organisation, people then really care about how their pay compares to others within the same organisation. This is called internal equity - the extent to which my pay is competitive against others doing similar roles within the organisation. You could find the largest pay increases are possible by changing organisation or industry. But work life isn’t just about pay.

So let’s say you want to stay in the same organisation. How do you ask for a pay rise?

  1. Don’t get too caught up with what others are being paid. Rather focus your conversation on what you can control and what you are bringing to the organisation. This could include changes in your role such as greater accountability, more complex problem solving, or increased skills required to complete your work. It could also include changes in your contribution such as improved performance, helping others, or contributing to projects beyond your usual role.
  2. Check any existing pay review processes. If you have a Human Resources department it’s worth seeing how often pay is typically reviewed and the standard process. Having said that, most organisations will have some scope for out of cycle reviews.
  3. Flag the conversation ahead of time. Say something like “I was hoping we could discuss my pay. Can I set up a meeting to do that?”. This will give your manager time to prepare rather than feeling like they have been hijacked by the conversation.
  4. Recognise that your manager may be nervous about this conversation as well. Help put them at ease by being polite and calm.
  5. Prepare for the meeting.  You might structure the conversation by saying that you want to stay with the organisation and are enjoying the role. You can then discuss changes in the role and in your contribution since the last pay review.
  6. Don’t put your manager on the spot. The manager will typically not be able to make a decision right away, so discuss what time they might need to review your pay.
  7. Be prepared for a no. It is entirely possible that your pay rise request may be denied. Prepare for this by considering whether you are prepared to stay with the organisation. You might want to look for other roles within the organisation, or could even start exploring roles outside the organisation.

Asking for a pay rise can be a tricky conversation. However, preparation, being clear about what you want, and being considerate can increase your chances of a good outcome.


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