3 Steps to More Cash: If You Want a Raise, Plan Now and Ask Later

The bad news is, last year economically sucked. The good news is, this year seems to be sucking less. There are signs of life out there in the economy. People are starting to crawl out from under their rocks and spend a dollar or two. Portfolios have recovered somewhat. This might be the year to get that raise.

The problem is, if you're not planning for that raise right now, you're almost guaranteed not to get it later.

Raises are uncomfortable topics. Why? Because your boss is immediately in a position where they have to delicately say "no" which inherently tells you you're not worth what you're asking for. This dynamic occurs even if you're doing a great job and the reason she can't give you a raise is because budgets are locked down.

It's also uncomfortable because you're going into that conversation expecting that nauseating sense of rejection just like the junior prom.

So what are you to do? How can you increase your chances of getting a little more cash this year especially in light of how brutal last year was? You have to plan for the raise now and ask for it later. There are three simple steps in this process.

Step 1: Planning Now

To get a raise, you have to demonstrate you're creating significantly more value than they're paying you for. A good rule of thumb is 10x. You should strive to drop 10x your compensation to the bottom line of the company. If you're a sales guy making $75k, you'd best be dropping $750k to the bottom line if you want to be seen as a solid contributor.

If you're itching for a raise, you need to layer that 10x lens on the raise too. If you're looking to get a bump of $10,000 per year, you should be looking for ways to improve profits by $100,000 per year.

Before you go whining to me that you don't have a P&L position, I'll tell you you do. In theory, every action within the corporation is designed to improve shareholder value. If you're in HR, figure out ways to reduce turnover, improve retention, or improve the quality of your hires. If you're in IT, look for ways to reduce costs, improve reliability, or increase feature functionality. Wherever you reside in the company, understand the linkage between your role and the bottom line.

This is part of the planning. You have to understand how the actions you plan on taking generate incremental value. Now that you understand that linkage, you have to lay out a plan of the new actions you'll take to improve profits more than you did last year. Spell out those initiatives, define success metrics, and get a plan in place.

Once you have that, go to your boss with that plan and be sure you position it as "here are all the INCREMENTAL things I plan on getting done this year to deliver MORE value to the organization." You're setting an expectation that you're overdelivering on your objectives. This is a critical step because on the back end when you're asking for more cash, you're going to bank on these "extras."

Step 2: Execute

Do I really need to explain this one? Be sure to hit your plan on these incremental initiatives. 'nuff said.

Step 3: Ask

After you've delivered on some of these programs, it's time to swallow hard and go to your boss to make your case for more cash. First, prepare your pitch. Lay out all the extra stuff you've done and the value you've contributed to the organization. Second, do your homework. Understand where the company is financially and if it can afford to give you a raise. Asking for cash if your company is struggling can be the pinnacle of stupidity.

If the company can afford it AND you've delivered the goods, go to your boss with your case.

"Hey boss, I'd like to discuss the POSITIVE impact I've had on the organization so far this year. As you recall, we discussed all the EXTRA things I was going to do as part of this year's plan (see step #1). So far I've done a great job delivering on all of those and they've already contributed $100,000 in value to the company."

"Yep. It has been awesome. I remember you signed up for those things and you've done a great job delivering on them."

"I'm glad to hear you agree. Given my contributions and the fact that last year was pretty lean from a bonus standpoint as well as the fact that the company is doing better now, I'd like you to consider giving me a raise that is reflective of the added contributions I've been making. I believe I've generated substantial value and will continue doing so going forward. I didn't get a raise last year because the economy was tight but it seems like we can afford to give me one now. What do you think?"

See how that works? Deliver value THEN ask for money. It's hard to argue with facts and results (especially results that were agreed upon early in the year). It's still early in the year. You have time to get some ideas on paper and commit to them. You have the balance of the year to deliver on them. If you do, you're dramatically increasing your chances of having a nice holiday season later this year.

Get crackin'!

- Mike Figliuolo at thoughtLEADERS, LLC