Compensation is no one’s favorite subject to discuss with their manager, but it’s sometimes a necessary conversation to have to ensure that you’re being paid fairly in accordance with the market both inside and outside of your company. Every company has its own philosophy and process around compensation, so it’s impossible to offer a strategy that’s guaranteed to win. The following do’s and don’ts are sets of crowdsourced wisdom that I’ve collected and utilized in my career, some from people I know and others from online resources like my all-time favorite post on the subject from Patrick McKenzie.
While they’ve achieved varying degrees of success as measured by adjustments to my pay, these tactics have always left me with a better sense of my value to the company without burning bridges with those I work with. This advice is intended for those looking to have a conversation around compensation at their current job but may be applicable to negotiating an offer at a new job as well.
Do’s:
- Know your value: Compensation conversations with your manager are always held under an imbalance of information (think: salary bands, company budget, market data, promotion timelines, etc.) The best way to level the playing field (and bolster your confidence) is to develop an informed sense of your value before having the conversation. If your company has a culture of pay transparency among ICs, take advantage of it to better understand where you fall within your pay band. If you know folks in similar roles at other companies, see if they’re willing to exchange numbers, or look at sites like Glassdoor and levels.fyi. If you’re willing to put in the effort (and are well-versed in negotiation basics), engage in interviews with other companies to determine the value of your exact skill set and experience. Since your company will likely justify its comp offering by citing market data, bringing in your own market data can help you keep the conversation going within their framing and gives legitimacy to your request.
- Help them help you: I’ve been surprised to learn just how little power managers sometimes have to make comp changes, often needing to translate any request to help you up their management chain and to HR. One strategy you can try is to provide them with an argument that they can use on your behalf. For example, I’ve heard from managers that one of the cases they can act on most immediately is that of large pay disparities across gender or race – presenting them with a differential between yourself and a peer of similar level, tenure, and track record from a more privileged class can be something they can bring to HR and address right away. For less clear cut cases, you can try to present an argument that would appeal to the business more broadly. Maybe there is a unique aspect of your background such as an advanced degree or relevant experience from a different industry, and you can make the case that the market data your company uses to make comp decisions doesn’t reflect niche profiles like yours (which you can back up with external offers or data points from other companies.) Or maybe your role requires a specialized skill set that isn’t reflected in your pay band, and reclassifying your role to reflect that would better align the company with the rest of the industry and make future hiring efforts easier. Regardless of the approach, sending your manager a followup email summarizing the argument can be useful.
- Know what you want (besides money): I saw a great insight from Lara Hogan recently that “Many comp convos are actually core need convos.” In my experience, the desire for more money can be a manifestation of other types of dissatisfaction, as in, “If I’m going to be this unhappy here, I’m going to need a bunch more money to stay.” Unhappiness could come from any number of factors, including but not limited to brutal on-call shifts, unclear and contradictory top-down directives, abusive teammates, or ignored feedback. While sometimes comp requests really are just about the money, I’d encourage anyone going into one of these conversations to first take a step back and assess whether there are also non-financial areas of support they can ask of their manager that would improve their happiness. For example, maybe you’re feeling overworked and underpaid relative to the value of your output, and you can ask that the team hire more engineers to spread the load. Or maybe you feel that you’re no longer learning new things, and you can ask whether there’s opportunity for a team or role change or for professional development resources like courses and conferences. Managers often have little to no flexibility to make immediate comp changes and may ask if there’s any other support they can offer you, and it’s best to be prepared with an answer.
- Understand how comp decisions are made: Gather as much information as possible around how compensation decisions are made within your company. This can be helpful, for instance, for timing your conversation appropriately within your company’s compensation review cycle. Julia Evans recently came out with a great blog post on questions you can ask over time to learn about the process at your company.
Don’ts:
- Make threats: It can be tempting (and sometimes even effective) to threaten to leave the company unless they give you more money. Generally I don’t think this is a good idea, perhaps unless you’re really, truly happy with walking away. If you do stay, it’s likely that you’ll fray your relationship with the company and diminish your future chance of success, as folks generally aren’t super enthusiastic about helping those that threaten them. And if they deny your request, you’re left with little recourse having already played your most nuclear option. Instead, I try to be forward-looking in my requests, calling out the aspects of my job that I love and the upcoming opportunities where I could provide immense value to the business, all of which would be easier if my compensation more closely matched my market value.
- Take it personally: Easier said than done, of course. But your compensation is not a reflection of your value as a human being. Period.
- Avoid the conversation: The biggest disservice you can do yourself is to not have the conversation at all and assume that good work will be rewarded as a matter of course. While I don’t think that most companies are trying to undervalue employees, they are for-profit businesses at the end of the day and aren’t incentivized to pay you more than it takes to keep you happy. You are your best advocate when it comes to knowing your value as an employee and making it clear that you need to be paid accordingly.