Since its conception, the performance management process has undergone massive changes and modifications.
Generally, the performance management system has to align with the company strategy and reflect the type of management control that exists in your company.
This control can be
- personal centralised (hello, boutique businesses),
- bureaucratic (working 9 to 5 within budget),
- output (target and goal-based),
- cultural (we all follow the fearless leader and identify ourselves with the business goals) and
- HRM control (where the real performance management lives).
Hence managing performance has evolved from manual tracking of your work time and filling in long questionnaires, doing 360-degree appraisals (aka popularity contest) to now assumingly popular Agile Performance Management.
Agile PM is a system when you get feedback a lot, and often, the outcomes (big surprise!) are not directly related to your salary. Middle management is trained to support and mentor their people to nurture them and concentrate on rather their achievements than screwups.
Which is a dream!
However, let’s get back to reality, where your performance appraisals are mostly based on how good you are at making your stakeholders look good to senior stakeholders with the occasional 1:1 with your boss.
So how to get ready for this dreaded conversation.
1. Check what’s happening on the market. You might want to have a look at payscale.com and a few reports from the recruitment agencies, but the best way is to talk to a few in-house and agency recruiters, to get an idea on what companies of a similar scale are paying their people. Of course, you can check Seek and other job boards.
What does this information mean to you? Bear in mind that when you see salaries on Seek, that would be the figure companies are happy to pay to a NEW EMPLOYEE. What makes you different from a newcomer? A LOT:
If to compare you to someone who never worked at your current employer, you have
· Understanding the business processes/workflows within your function
· Understanding of how your role interacts with other functions
· Pain points within your function – what works, what doesn’t
· Ability to optimise processes (ideally)
· Hands-on with internal information systems
· Knowledge of the company service/product
· Relationships with your colleagues. Utterly important – you have already helped them, they know they can rely on you, they trust you
· Relationships with clients/partners/vendors if your role suggests this kind of interaction
· Informal relationships with your colleagues, whether it’s sporting, boozing or just watercooler chats
2. Gather ‘LIKES’
You need to start getting ready for this conversation from your very 1st day.
I would advise creating a folder where you meticulously collect all ‘well done’s and ‘great job’s from colleagues, vendors, partners and clients.
If your manager is not in the habit of thanking your publicly, then forward some of the appreciation notes to them.
Some people might think it’s a bit petty but asking for feedback is an essential part of your job. If it’s positive, great for you. If it’s negative, you would know what areas you need to improve.
If you talk about your achievements to your boss and all they got it’s a flat ‘good work’ it might be a good idea to write a follow up, where you point out what you have done, and don’t shy away from using active verbs: I led, I achieved, I optimised.
So, all in all, collect ‘well done’ so your salary raise convo won’t be ‘medium rare’.
3. Pick a moment.
Don’t do Mondays. Nothing good is happening on Mondays as these are the days for important meetings and catching up on stuff people decided not to do last Friday because of beer o’clock.
Also, if you know that your boss’s secret sauce for relaxation can be legally obtained in BWS shops – there is a chance they don’t look forward to Mondays at all. Best days would be Wed and Thu.
Read the room. If the company is under strain, the last quarter sales were crap, they lost a big client, or your boss’s dog ran away – it might not be a good idea to come up with the money talk.
If you just had a big win, finalised a critical project or got some public appraisal from the cross-functional team or a client – off you go. If the company just came up with a big boastful report on how well they did, and you provided a significant contribution to all that jazz, actually it will be even strange of you not to ask for more.
Is it a good idea to book the meeting without letting your manager know what you want to speak about?
If your manager is not an owner of the business and as every common person, they operate under budget constraints, you need to let them know a few days in advance what you want to talk about. People like to be prepared – ambushing doesn’t work well in such situations.
Ideally, talk about your salary aspirations a few weeks before an annual/biannual performance review or the end of the fiscal year – then there are chances that your new salary will fit into the new budget. Are you planning on discussing your salary during the review? You are already too late, mate.
4. Legs to stand on?
You need to showcase how your excellent work helps company.
Let’s say an in-house recruiter who fills roles in time without using recruitment agencies and (omg, is it even possible) LinkedIn Premium would save their company tonnes of money. Average agency fee is around 15-25% of annual income, LinkedIn charges around AU$12K so if to compare the amount a recruiter saved to AU$15K salary raise – it’s nothing.
Demonstrate how your responsibilities have expanded since you started. You might be surprised, but some bosses have very little idea of how much extra their employees do.
Don’t ask for a salary raise by bringing up some personal circumstances – private schools, dentists, new houses and all other juicy details, leave them aside. You are a professional and a partner. This is negotiations, not a begging exercise. Focus on why you deserve it (not why you need it).
Talk about the future of the company, your vision of how you plan to take more responsibility and bring in more to the table.
5. How much to ask for?
Depending on many factors such as
1) how does your salary look compared to the market trends
2) what’s the financial health of the company
3) were there any significant achievements on your side – you might ask from 5% up to 15% of your current salary.
6. Who says these Magic Three Words First? (I want XXX /you got XXX)
When it comes to the real numbers, let your manager be first to voice them, then name yours (+10%) and meet happily in the middle.
7. What you need to remember
· Prepare an elevator speech – practise, practise and practise.
· Talk numbers and facts.
· Tell them how you plan to make your manager’s life easier, based on what you have done so far.
· Bring in some printouts to help you with the pitch.
· You extra AU$15K annually is only AU$288 weekly, and surely company can afford it?
· Be ready for a NO.