Most companies do their performance reviews at the anniversary of your hiring, or at the end of the year.
I got my results in January. While it was mostly positive, I felt disappointed at the 5% raise I got. In typical times, a 5% raise is a very good raise. However, I missed my performance review last year because my then-manager didn’t do it. When you work for a small company, there are things that are less structured - annual reviews, promotions, and raises being part of it. So a 5% raise over 2 years is a raise of 2.5% per year. It is supposed to bring my current pay up to the current market value. A 2.5% raise is a fair raise in a typical year, and in line with what I would expect for doing a fairly good job over the course of the year without added responsibilities. However, the U.S Bureau of Statistics reported that the Consumer Price Index rose 7.0% over the last 12 months. https://www.bls.gov/cpi/ Food items rose 6.3% and gas prices are up 49.6% from 2020. That means any raise less than 7.0% is not keeping up with inflation. I went into performance review with a target raise in mind (9%). While we didn’t talk about specific salary numbers, we did talk about reviewing and “adjusting” my compensation. In a follow up email, I was thanked for my efforts and time with the company. And a raise of 5% for 2022.
Negotiation 101 The company VP is a smart man. I would say we have a good relationship and I consider him a mentor. He has asked me several times in the past whether I was happy working for the company, and I was. He always made an effort to tell me to discuss with him before I start looking for opportunities elsewhere. He knows good talent is hard to find, and easy to be poached by other competitors. At that time, I felt I was compensated fairly so I thanked him for his time and the free lunch. One thing he taught me is anchoring in Negotiations. Basically, you try to be the first person to throw about a number because it “anchors” the conversation. Example, a job prospect can come into an interview expecting $75,000. However, as an employer, you should be the first to throw out the offer of $45,000. Then, the job prospect may counter-offer $55,000 in lieu of the $75,000 he was originally expecting. So, given he was the one who taught me about the skills of anchoring, I recognized what he was doing, because the raise I had in my head was higher than what they were offering. Women Tend to Look to Switch Jobs Instead of Negotiating Their Pay 72% of women say that they would rather look for another job if they feel they are underpaid rather than negotiating their salary. This article helped me seal the deal, and muster enough courage to ask for a bigger raise. Timing is everything, and I felt there was no better time to show how valuable I have been to the company. With a new project, the company had brought one two new external hires, and BOTH of them put in their two weeks within one to two months of joining. Regardless of whether it was a company culture “misfit”, better opportunities elsewhere, etc. we were back to our original bare bone staff … I had been making weekly trips, working OT (exempt of course), and starting to excel beyond my project title.
On the surface, it may seem that it is easier to look elsewhere and have a fresh start, but in reality, women who are looking for new jobs with higher pay are going to spend multiple hours adjusting their resume, polishing their cover letter, going on multiple rounds of interviews and undergoing salary negotiations. “That takes a lot of courage and negotiating strategy — whether it’s about pay or not, it’s still negotiating your way into a new role,” Robinson says. “Women are using the same skills externally that they would need internally
A 5 Minute Discussion The next Monday, I went to his office to ask if we could talk about my compensation. I reiterated:
I was happy working for the company ( I truly was), but the adjustment was smaller than I had hoped,
I was looking for something closer to a 9% raise instead of a 5% based on my level of experience and responsibilities (6 years, closer to a Sr. PE or Assistant Project Manager position), rather than as a solid PE.
My desire to grow with the company, helping them succeed, and that I was not looking for opportunities with other companies (the truth).
But I hoped that they could be competitive with what other competitors could offer.
Pay is not everything and a smaller company would not be able to offer the same financial incentives as a national ENR Top 100 General Contractor. However, I sincerely believe that if companies want top talent, they have to be willing to pay for it or at least meet halfway in the middle. I have never been driven completely by pay. Rather, it has always been about autonomy, and being a top (mid-level) performer in a smaller company has given me more autonomy than I found working as a top (but low-level) performer in a large company. The next day, I got an email with good news, informing me of a 11.8% raise over my current salary, equal to an additional $5,000 from the first raise offer. I have never “negotiated” my salary up to this point since I started working - and I still do believe new grads have limited negotiating power. But this was a major personal win! I am completely happy with how successful it went and has definitely given me confidence in the art and skill of negotiation. The End Game Do I want to work for someone forever? No. But I do believe that there are “dues” that everyone must pay in order to find success later in life. And I’m satisfied right now putting in mine. Rich Dad Poor Dad is considered gospel in many financial literacy circles. It encourages readers to collect "assets", not liabilities. Assets are things that can generate you income without actively working at it. A typical 8-5 job is not an asset, because it will not generate you any income if you don't show up to work. Compare that to a business owner who can be on vacation in Cancun and still make money through a business that remains open (staffed by employees). While I do believe it frames the right mindset, Gen Z workers are now looking for lots of ways to make BIG money without making BIG sacrifices. They are determined to start businesses without any skills just because they don’t want to work for someone. I believe that with time, success will come. In the meantime, sometimes you just have to work for someone, put in your “dues”, while learning to spot and take advantage of opportunity. Have you ever had any “baby steps” success that brought you confidence in a new skill? What is your take on negotiation? Would you rather avoid it and find a new job?