Be realistic in your expectations
If it is been a year or more since your salary was last reviewed and if you have been doing excellent work during that time, it is reasonable to consider asking your manager to review your salary.
This potentiality should be weighted up with other factors.
Take into account the Peter Principle
The Peter Principle is an observation where employees could be promoted within the organisation until they reach their level of respective incompetence.
Do consider whether you are capable and competent to take on more work and responsibility to justify a pay increase.
It may be worthwhile to ask for some training and development or non-financial benefits first before asking for a pay increase when you have a better case to put forward.
There is always a cost to everything
There will be a higher expectation placed on you in return for a higher salary.
In giving you your requested salary increase, your manager will naturally ‘demand’ higher productivity and quality of work from you to justify an increase.
Pressures of work will increase.
Is this something you are ready for?
Don’t forget about tax
Take into account your personal and family tax situation. Depending on where you live, there are tax implications for receiving more pay.
By taking into account your tax rate, you may be paying more tax and only receiving a small incremental in net pay for doing more work!
Government benefits that you receive may be impacted as they scale back when you receive more money.
Do weigh up the impact of tax on your overall cash flow.
Be prepared to add to your workload
This could mean longer working hours or managing more people.
Sacrifices need to be made – sleepless nights, less time with the family, etc.
If your manager gives you a pay increase, be prepared to work hard and working longer hours.
Remember that there is no such thing as a free lunch!
Don’t underestimate the value of happiness over money
If you are happy in your current job and the only thing you can’t get is more money, maybe it is not the time to leave or ask for a pay increase. The grass may not be greener on the other side.
There’s no way to put a price tag on having a job you enjoy. Job satisfaction is the top reasons why people stay on in the organisation.
Workers don’t leave jobs solely for money. Money reasons rank fourth or fifth.
Job hopping may be the quickest way to earn more
If you have done your research, had a chat with your manager, and you didn’t get a pay increase, then it could be worth considering moving jobs.
Don’t make the switch without having something concrete lined up first though – e.g., another job offer on hand.
Income security is imperative.
Sometimes, it is quicker to get pay increases by moving jobs and laterally rather than sticking with the same employer.
Loyalty seemingly doesn’t pay in this case. You are paying a ‘loyalty tax’.
You are not indispensable
No matter how talented or capable you are, it is very rare for an employee will be indispensable. More so if there is high unemployment.
In fact, your employer may be looking for someone younger to do your job at a lower salary!
Changing your mind can be detrimental
If you resign and then change your mind, your employer is under no obligation to take you back.
Do consider your strategy and options well before you ask your manager for a pay increase.
Different job size equals a different salary
Not all jobs are created equal, even if they have the same job title.
There are many factors to consider when determining your salary or pay – organisation size and financials, industry, location, skills required and job size (level of responsibility and accountability).
Generally, for any given job, there will be a relationship between the three factors. The output or results expected from the work (accountability), will demand a certain level of input (know-how), and the processing of this know-how (problem-solving) to enable the delivery of the required output.
By performing a job evaluation, it is a systematic way of determining the value or worth of a job in relation to other jobs in the same organisation. It tries to make a systematic comparison between jobs to assess their relative worth for establishing a rational pay structure within the organisation.
Organisations can buy benchmarking data to ensure that their pay scales are aligned with the industry or ‘market’ that they are operating in. This ensures that the appropriate ‘market rates’ are being paid to their employees.