The Raise Negotiation: 9 Possible Responses for Managers

Empty Conference RoomIn the last few weeks, I’ve heard two great stories regarding employees asking for a raise that boggle my mind.

The first story is from a manager who told me that an employee who was on a corrective action plan came into his office and stated, “Since I’m handling two additional assignments, I feel I deserve a raise.” This manager correctly handled the request by responding, “We do not consider requests for raises from employees who are currently on corrective action plans.”

The second story comes from a CEO who told us that one of her employees came to her and announced, “I’m not happy working here and I’m thinking about leaving. The only way I would consider staying is if you were to give me a 30 percent raise.” In this case, the CEO felt that she couldn’t live without the employee and gave in, giving up 30 percent more salary to ensure the employee stayed with the company.

Asking your manager for a raise is a high risk maneuver. Although people tell employees that, “It never hurts to ask,” the reality can be harsh. If the answer is no, the manager could harbor resentment about being asked for a raise by an ungrateful employee and the employee could be disheartened because the manager doesn’t see the value in their contributions. When this happens, the negotiation has a high potential to end up in lose-lose.

At some point in their career, every manager has had an employee come to them and ask for a raise. It’s usually requested at a time when the manager hasn’t had time to think through an appropriate response to the request. So what should they do?

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Should You Turn that Job Offer into a Raise?

Man and woman sitting at desk and passing an envelope between themThis sounds like every employee’s dream. You have accepted an offer of employment with a new company. You like the company, you like their benefits, and best of all, you like your new salary. It’s all good—until you go in and tell your boss you have accepted another job and you are leaving in two weeks.

Your boss asks you, “How much more are they paying you?” On average, people leave their current company for approximately a five percent increase. But, as long as your boss is asking, you decide to tell him it is significantly more pay. Your boss says, “What is significant? 10 percent? 15 percent?” You respond by saying that it’s in that range. Your boss then responds, “Don’t tell anyone you’re resigning just yet, I think I can get the gods in power to match that offer.” Later that afternoon, your boss comes to you and says, “I have great news. We can match their offer by increasing your salary by 15 percent. So you’ll stay, right?”

So, now what do you do?

Although every situation is different, generally, we recommend that employees don’t accept or counter an offer for continued employment for the following reasons:

It’s not really about the money: Statistically, most people do not leave organizations just for more money. In our surveys, we find that people leave organizations far more often because they have a bad boss, they are bored with their job, they have little autonomy or empowerment, their department lacks teamwork, they don’t feel valued, they have no work-life balance, and/or the company’s values are not in alignment with the individual’s personal values. Even with more money, the reason you were leaving will still be there if you accept the counter offer. How much money would make it worthwhile to work for an ass?

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