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Careers

The Art of the Raise

Nothing helps your bargaining position like a job offer or expression of interest from another firm.

Negotiating for a raise is scary. It's especially scary when employers are substituting technology for people, moving business offshore, downsizing their workforce and converting permanent jobs into project-length positions. You can't help wondering, If I ask for a raise, will I be fired?

Not if you know how -- and when -- to ask. When my clients ask how to overcome their fear of confronting the boss, I tell them to start by assessing their negotiating position. Does your boss like you? How essential is your job to the organization? Would it be difficult for your employer to find someone at your current salary who could replace you? The more checks you can tally in the "yes" column, the more confident you should be in negotiating, the safer you are in requesting more money, and the firmer you can be in responding to a "no."

It's best if you can quantify how much your efforts add to the company's bottom line. If that's not possible, at least get comparable salaries for workers in your position. Check a Web site such as Salary.com, or consult a professional association, colleagues at your company or others, or outside recruiters. Then write a one-page memo to the boss estimating your fair market value. That will give your boss something tangible to show higher-ups to justify giving you a raise.

Don't push your agenda if your boss is distracted or the company's finances are precarious. The best time to ask for a raise is immediately after you've achieved something significant -- for example, coming in under budget on a project -- or after a supervisor has complimented you.

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And nothing helps your bargaining position like a job offer or expression of interest from another firm. Even if you intend to stay, put out feelers. If you get any nibbles, you can legitimately tell your boss, "I'm quite happy here, but another company has expressed interest in me."

Money isn't everything. If your boss says more money isn't available, switch gears. For example, suggest an upgrade in your position. It's easier for your employer to rationalize a higher salary if your job description is changed to include higher-level work. Or ask if you can reopen negotiations in three months. If the boss agrees, put it in writing.

Can't get anywhere on salary? Try for a noncash, tax-free goodie: the right to telecommute, a more prestigious title, flexible hours, a week at a professional conference in Hawaii.

If the boss turns you down flat, coolly say, "I understand your position," and leave the room. An ambiguous response is often more effective than an aggressive one because it leaves your boss wondering what you'll do next. If the boss is worried that you might look elsewhere, you're more likely to get an offer.

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Remember, nothing ventured, nothing gained. Linda Babcock, an economics professor at Carnegie Mellon University, conducted a study of CMU graduates with master's degrees and found that 57% of men had negotiated their first salary, compared with just 7% of women. The men who bargained increased their salary, on average, by 7.4%, or $4,053. So if you believe you deserve a raise and don't ask for one, it's probably unfair to complain that you're underpaid.

Don't be greedy. What if you're about to join a new company? Your moment of maximum negotiating leverage comes when you're offered the position but haven't accepted it yet. If you feel confident, make a counteroffer.

But don't wrangle over every last dime. After taxes, the extra money you get is rarely worth any ill feelings you may generate. Even if your tough negotiating prevails, your employer will expect top-dollar performance. Mess up once and you may end up in the doghouse.

My rule of thumb -- and the advice I'd give my child -- is this: Reject the first offer, accept the second.