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Human Resources/Pay Raise after 2 years at the same job

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Question
Mark

I currently work for a small software company and everyone of us (there are only 8 employees) works from home. When they hired me at 15/hr it was fine for me given my current financial state however like everyone else my living expenses have increased.

Ive done an exemplary job at this company (working nights, weekends etc when it wasn't expected of me and I've never calling in sick even ONCE) and they have acknowledged this fact many times.  I want to ask for a 20 percent raise or 3.00 dollars per hour more. Is it excessive to demand such a raise of that amount or given that its been 2 years would it make more sense given that i could have received around 10 percent each year anyways and now im asking for 20 in one shot?

I appreciate your advice here.

Thank you

Answer
Hello Dave,

Thanks for your question.
 
There are a few factors that go into establishing an annual compensation system for a business.  The bigger the business, usually, again, usually, the more sophisticated the system. It sounds like you work for a small company or a least a small software group so we’ll assume there is no involved compensation structure.  But you can use the same market data large companies use to assess where you are in terms of competitive pay.  The operative word here is competitive!  That is, what do other companies pay for the same position?  Pay means pay range (minimum to maximum for the specific position) and average pay for the position in the range, given experience, education, and level of position, e.g., programmer 1, programmer 2, programmer 3 and so on.  I just used programmer as an example.

Here’s my advice so you can use competitive data to make your case for a pay increase.  You should be able to do this all on the web.  (1) Find a position description that fairly represents your current position content.  (2)  Use that title as a basis to research what other companies are paying that same level of position.  Be careful that you compare your position with positions in similar industries … in your case possibly the Software Industry. However, if your position or a similar position exists across multiple industries, electronics, pharma, transportation, etc., you can use data that crosses multiple industries. When you gather your competitive data on your position, be mindful of regions.  The same position will not necessarily pay the same in large cities, small cities, etc. And that applies to types of industries as well.  For example, Pharma usually pays more for similar jobs, usually.

This may take some time but the best argument you have for making a case for a pay increase is specific, relative, industry and regional, average pay data for the same or similar positions.

When you have assembled that I suggest you rehearse, out loud, your “presentation” for your face to face discussion regarding your pay increase.  Some people find it helpful to do that in front of a mirror to make sure body language is taken into consideration.

That is my advice Dave.  Good luck with your compensation “project”.

Mark

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Mark Eichinger

Expertise

Any type of question related to domestic and international Human Resources work. My H.R. passions include Compensation design and systems in competitive markets, Health and Safety in Industrial Environments, Performance Management, Talent Management (Hiring, Selection, Employee Development, Compensation, Creating Space, etc.), Communications, Coaching, Counseling, Leadership, and Management. Questions I cannot answer: I am sure there are questions within these categories that I may not be able to answer but my experience below would suggest those would be few.

Experience

I own International Human Resources Coaching and Consulting, LLC. www.IHRCConline.com. Previously, I successfully held corporate executive and management leadership positions from 1979 to 2007 in two $9B+ multi-national corporations. Positions included: Vice President, Human Resources for the Asia Pacific Region, Eaton Corporation; I was based in Shanghai, China. Prior to that assignment, Vice President, Human Resources International and Operations, Eaton World Headquarters, Cleveland, Ohio with global responsibility for Eaton’s Human Resources practices, international assignee management, and Regional Human Resources Directors in Asia Pacific, Europe, and Central and South America. Specifically, my experience spans work at domestic and international locations at the operating plant, division, business unit, and corporate levels and most business scenarios to include startups, closedowns, restructurings, integrations, and ongoing operations. I am an Eaton Business Excellence Assessment Examiner (Malcolm Baldrige based system). I introduced processes and process mapping into the Human Resources environment. I have extensive experience with and working in domestic and international organization matrix structures. In the Asia Pacific region, my responsibilities included, leading the regions H.R. team and processes, managing the H.R. relationship with the corporation, creating and leading the professional and general manager development programs, China’s university relations program and managing the Asia Pacific key leader’s process. I have coached managers and leaders. I am a professional listener, my style open, direct, and focused on leader accountability and employee engagement. In Summary, my career responsibility included more than 60,000 employees, 60 union and union free operations, and 45 countries. I also lived in Korea for two years while in service with the USA’s armed forces.

Organizations
SCORE – Counselors to Americas Small Business; at various locations I have also belonged to Rotary, Lions, Kiwanis and the Chamber of Commerce. I have served on Boards of medical, community and institutional organizations.

Education/Credentials
Bachelor of Science in Business Administration, Youngstown State University. MBA work Youngstown State University, and University of Bridgeport. University of Tennessee, Lean Manufacturing Certified. Thunderbird School of Global Management, Management Certified.

Awards and Honors
Corporate level awards for compensation systems, communications campaigns.

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