How should I properly approach my boss if I'm feeling underpaid?

Question

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?

Answer 1

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).

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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.

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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.

Answer 2

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.

Answer 3

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.

Answer 4

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.

Answer 5

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.

Answer 6

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.)

Answer 7

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?"

Answer 8

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!