For the majority of people, monthly cash flow is usually generated through income from working, not investments from equities, bonds or real estate. Money earned from a job is probably the single most important source of income. That’s why it’s important to know your own self worth to the company that you work at.
Many people just don’t realize how important they are to the businesses that they work at. It’s not to say that we should all be conceited and egotistic at work. That certainly won’t win you any office friends, but it’s important that you are compensated fairly for your efforts.
Inflation Is Not A Raise
Let’s face it, we all know businesses are out there to make profits. Profits are important to a company. It’s just like your own personal cash flow. Without profits, a company can’t grow. Even with that fact, it’s important that employees share in the success of the company when profits are rising.
When your employer offers you an annual raise of a few thousands dollars that amounts to 1 or 2 percent of your current salary, you really aren’t getting a raise. Even in our current low inflation environment in Canada, the inflation rate still reaches 1.8 percent. This means that any raise lower than 2% would actually be considered a pay decrease. It is important to realize that your purchasing power is decreasing on a yearly basis if your salary doesn’t increase at least at the rate of inflation.
If you ever want to increase your standard of living, then the only way to do so would be to ask for a raise that is greater than the inflation rate. If you are happy accepting raises that are less than inflation then you are essentially accepting the fact that you are taking a pay cut.
You Never Know Until You Try
A lot of people just take what’s given to them without any complaints and like to grumble about it later with their colleagues or friends after work. This shouldn’t be the approach that should be taken when you are unhappy about your salary. Any year end review or a review for compensation should be taken as an opportunity to negotiate.
If you personally feel that you deserve higher compensation then it’s really up to you to speak up and ask about it. It could be as easy as just asking the question “What would it take to get my salary to increase to $X amount of dollars?”. It’s not a demand but a question. This will usually help start up the conversation with your superior that you want to see greater compensation without being antagonistic about it.
If you feel strongly about your own personal value to the company, just be prepared to defend or justify why you think you deserve a higher raise. You will be surprised at how receptive employers will be if they also feel that your contributions have led to the success of the company.
Managers and supervisors know the people that have performed well for the company. They are not stupid and blind to the value that is provided by exceptional employees. In fact, some employers may also feel justified in giving raises to employees that exude that type of confidence. It’s just like anything else in life, if you show confidence in yourself and respect yourself in the workplace, then your employer will actually respect and want you more.
It’s not hard to find out your own personal self worth on the open job market without resorting to obtaining multiple job offers to blackmail your employer for a raise. With the Internet available to do research, there are many websites that are out there that will publish average salaries for a position that you might hold.
If you feel that your performance has been above average and you can justify it, then a strong argument can be made that you should be compensated at a minimum of the market rate. Trying to negotiate a raise with your current employer by getting a competing offer can sometimes be a bad plan and backfire. If your company feels that you are going to leave, they may be reluctant to offer you more money since they might feel betrayed.
As human beings we are always challenged by personal problems and some of them could be financial matters. Most individuals are private about their own financial matters, but when it comes to the most important source of income, it might be beneficial to open up to your employer if a significant life event requires you to need more income.
I’m not saying that just because the latest iPhone came out that you should go running over to your manager and request a raise, but there are other events in life that may necessitate more income. The need to care for the elderly, a new child on the way or even unplanned family emergencies may have an additional impact on your financial responsibilities.
Some employers can be sympathetic to your needs and may be compelled to help you if you are a valuable, contributing member to the company.
Make An Effort
Employers know that it is very difficult to replace an employee. The amount of resources that it takes to train and get an employee up to speed requires a considerable amount of time and money. Even though money shouldn’t be the only reason to work at a company, it’s still a big part of the equation.
Understand how your contributions affect the place that you work at. The more you understand, the more relevant and powerful your argument will be when you try to negotiate for a bigger raise. Most importantly don’t be afraid to ask. We’re all valuable members to the companies that we contribute and it only makes sense to have a constructive talk about your compensation.