Negotiate a Raise in a Bad Economy

Richard Birke, a Negotiation Professor and a Law Professor at Willamette University, joined us today with great tips on how to negotiate a raise when the economy is bad and your company is struggling.

Here are his tips:

While unemployment is very high and underemployment is significant, the fact remains that most people who want work are working.  An unemployment rate of 12% is also an employment rate of 88%.

And more people are relying on fewer wage earners than in the past.  Two income families are down to one.

So while it may seem to be poking a stick in the eye of people looking for work to talk about negotiating raises, it’s very important that the wage earners out there make enough to keep up with inflation.

Not everyone can get the outrageous bonuses that Merrill Lynch executives awarded themselves last month, but that doesn’t mean that they deserve nothing – especially when cutbacks often mean that each remaining worker is doing more than they used to do.

So here are some things to think about when getting ready to negotiate a raise in hard times.


It’s not about whether you need a raise, or want a raise, it’s about whether your boss believes YOU deserve a raise.

  • Look at the situation from your employer’s perspective and ask yourself some hard questions.
  • Are you easily replaced?
  • How is the overall financial health of the company?
  • If you get a raise, does that mean others have to get a raise?
  •  Has your boss gotten a raise?  If he needs a cost of living raise, don’t you?
  • Are you underpaid relative to your peers at the company?  Will this raise be putting you ahead or making you even?
  • Are you underpaid relative to your peers in the industry?
  • Are you asking for a “step” raise – cost of living – or a “level” raise – you started as a dishwasher but now you are spending more time doing the work of a “prep cook”?  If it’s a level raise, you may deserve a level increase, but you need to be clear about whether the company is willing to recharacterize your job as being at the next level.  A paralegal that does the work of a lawyer may become a better paralegal, but unless she goes to law school and gets rehired, she can’t expect to get paid like a lawyer.



Don’t be shy about asking for what you want.

  • A Carnegie Mellon study shows that women make less than men, in part, because they are reluctant to ask for more. 
  • Are you afraid to ask because you think you will look greedy?  Do you feel undeserving? 
  • Address the source of your reluctance to ask, and that will make it easier to muster up the courage to ask.


Make your case – in their terms.

  • How is your raise good for the company?
  • Remember, a raise isn’t a reward for good work done last year (that’s a bonus).  A raise is to compensate you for work you haven’t done yet.
  • How is the raise going to make you a better worker?   Is your car unreliable and you miss time at work taking the car to the mechanic?   Do you spend a lot of time as the public face of the company and your wardrobe needs some help?  Are you having trouble paying for child care?  If you can show that the extra money will change your life in ways that are good for your employer, it’s easier for your boss to justify giving you the money.
  •  “If you give me more money, I promise to continue to have a good attitude”  --  is a bad threat.  Does he really want to keep you there if your manners come  with a  fluctuating price tag?


Remember that money is a means to an end, not an end in itself.

  • Sometimes, there’s no money to be given out in salary, but there are other valuable forms of compensation.
  • Are there non-monetary forms of compensation that matter to you?
  • If the raise means “respect,” could this be accomplished with a title change?
  • If the raise would go toward buying a new car, could the company subsidize a lease or get you in line for a company vehicle?
  • Could you get a clothing allowance?
  • Could you get your duties changed to ones that you like better?  To ones that have more high end potential?
  • If you would use the money to buy some perks, maybe your boss can give you the perk without turning it into salary.


Psychology matters!

  • People say “yes” more to people they like.  Be as likeable as you can be (without looking like you are “sucking up).
  • People reciprocate kindnesses – Hare Krishnas used to give out flowers at airports.  Charities send address labels.  Both tactics resulted in increased donations.  Is there something you can do for your boss or the company that will make them feel like they “owe you one”?
  • People like to be consistent with past promises.  If you can’t get a raise now, can you get a promise that if you meet stated goals you can get a raise at an agreed date in the future?  When you ask later, you will remind the boss of the earlier commitment. (My kids do this – “You promised” is a great tactic – if I really did promise.)
  • And the last is kind of a trick, but a good one.  Use transference to your advantage.  In a study conducted in Vancouver BC, an attractive woman asked a simple question to male subjects – some of who had just crossed the Kitsilano footbridge – a very scary rope bridge suspended over a deep canyon) and some of whom were just walking in Stanley Park.  The subjects were later asked to describe their interaction.  The ones that had just crossed the bridge reported that there was a “spark” between the woman and them – when the “spark” was really just elevated levels of excitement about the bridge, they transferred that emotion to the woman – they thought the excitement and elevated pulse was a result of the woman’s feelings about them.
  • In a discussion about a raise, if you can end the meeting with a sincere question asking the boss to give you details or insights into something they did really well, they will often take great pride in telling their story.  They’ll feel good about themselves, and that will often make them think well of you.
  • When I was interviewing for a job at a District Attorney’s office in Massachusetts, I learned that my interviewer had recently won a big arson case.    A judge told me to ask about “cones of ignition.”  When the interviewer asked “do you have any questions?” I told him a judge told me to ask about “cones of ignition” (I was completely transparent).  The interviewer jumped up from his desk and ran to an electrical socket and began started waving his arms around showing me how an electrical fire left tell tale signs and if those signs weren’t there it might be arson…and on and on.  When he was done, I thanked him and he gave me the heartiest handshake and the biggest smile I could imagine coming from a hard boiled prosecutor.  He felt great when I left – and I got the job!



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