How to negotiate a raise in addition to your annual merit increase
It’s been a long year. You changed teams, picked up new projects, started mentoring a couple junior developers, wrote a couple spectacular white papers, or any number of other productive things.
Now it’s Performance Review season, and you’re looking forward to a stellar review accompanied by a nice merit increase to reward all your hard work.
But that’s not how things turn out. Instead, you get a strong review and the same old mediocre 2% merit increase you got last year.
That’s disappointing. Is there anything you can do?
How do you negotiate a raise in addition to your merit increase?
Your instinct might be to march into your boss’ office and demand a bigger raise. To make a statement and get what’s rightfully yours!
That probably won’t end well, so it’s time to slow it down and make a plan.
Step 1: Set your expectations
First things first, let’s level set: It may not be possible to negotiate a raise in addition to your merit increase right now.
By the time your manager told you about that 2% raise, the company’s merit increase budget had been divvied up and things were pretty much written in stone. The company made a budget, then parsed it out among the business units, which divided their piece of the budget up among departments, which divided that budget up among managers.
Your manager did the best they could to be fair to everyone, and out tumbled your 2% merit increase.
If it’s even possible to change that amount, a lot of pieces would need to be moved around. It’s probably not going to happen.
Step 2: Do your homework so your manager doesn’t have to
But that doesn’t mean you shouldn’t ask! Most likely, your manager will let you know there’s no additional budget right now, but maybe they’ll be able to work with you to make something happen now or down the road.
Before you ask for a raise in addition to your merit increase, I recommend establishing the following three things:
- Your target salary—What is the specific raise amount you feel you have earned? You’ll start with your market value—Glassdoor will help with this—and then adjust your market value for your specific situation.
- Your accomplishments—What are the valuable responsibilities you’ve taken on that were unanticipated when your salary was last set? Make sure to identify the accomplishment itself and the business value of the accomplishment whenever possible.
- Your accolades—What awards or recognition have you gotten from colleagues, other managers, or clients? These can help your manager understand the value of your work even if they’ve been focused on other things.
It’s important to do this homework before asking your manager for a raise because managers are very busy people. The more work they need to do to help you out, the less likely they are to find the time to do it.
Step 3: Start the conversation
Armed with those three pieces of information—your target salary, accomplishments, and accolades—you can approach your manager about an additional raise.
Here’s how to begin that conversation:
“I’m grateful for this merit increase—thank you for looking out for me. But I was hoping for a more substantial raise because I’ve taken on a lot of new responsibilities this year. Is there some way to adjust my salary to reflect my current responsibilities? Based on the market research I’ve done, I was hoping for a raise to [your target salary].”
Once you’ve begun the conversation, asking for a raise in addition to your merit increase will typically look like the same process as asking for an off-cycle raise. These email templates will help you follow up and continue working with your manager until you reach your goal.
Step 4: Set a goal and establish a timeline
Hopefully your manager will be prepared to have a productive conversation about what’s possible, and you may get a larger raise right away.
But the most likely result is that your manager will explain that the budget has already been spent for this cycle, and you’ll need to wait until there’s budget available to increase your salary.
If your manager suggests deferring your larger raise until later on, work with them to establish two specific things that you can collaborate on:
- What you need to do to earn the raise you’ve requested—If you’re unable to get a larger raise because your manager feels you have not earned it yet. Ask specifically what you need to do to earn the raise you’ve asked for.
- A timeline—It’s also important to establish a timeline so that you and your manager can check in at regular intervals to monitor your progress and make sure you’re on track to achieve your goal in a reasonable time period.
Step 5: Work with your manager to reach your goal
Once you and your manager establish a goal and a timeline, it’s up to you to keep this on your manager’s radar. Make sure to check in with your manager at regular intervals to discuss your progress, get feedback, and confirm that you’re still on track.
You may also run into structural barriers that prevent you from getting a large raise at all. This is sometimes the case at very large companies, where they’ve established rigid guidelines for raises and promotions. “Do you have to quit your job to get a big raise?” can help you determine whether your company has flexibility to give big raises or if you might need to look elsewhere to level up your pay.
Negotiating a raise in addition to your annual merit increase can be tricky. But there are things you can do to start the conversation with your manager and maybe even get a raise right away.
Follow these five steps to negotiate a raise in addition to your annual merit increase:
- Set your expectations
- Do your homework so your manager doesn’t have to
- Start the conversation
- Set a goal and establish a timeline
- Work with your manager to reach your goal
If you follow these five steps and find that a larger raise isn’t available within a reasonable timeline, you may need to begin looking for better opportunities with more flexibility to pay you what you’re worth.