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Financial Services Industry

Rosy outlook for raises and bonuses

Kiplinger's Personal Finance Magazine, Nov, 1998 by Marc L. Schulhof

Knowing what you're worth is a key to making sure you get your fair share.

Despite the shenanigans in the stock market and worries about the world economy, record low unemployment here at home is painting an optimistic picture for this year's raise-and-bonus season.

Raises for professionals are expected to average 4.2%, the highest in seven years, according to the annual Report on Salary Surveys published by the Institute of Management and Administration. The word on bonuses is even more exciting: The average this year is estimated at 11.1%, compared with only (only!) 10.2% a year ago.

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Will you get your fair share of the booty? That depends on lots of things, including exactly how well your company is doing, how well you are doing--and how well your boss thinks you are doing. But compensation experts say that the most convincing argument for a raise or bonus rests on solid research into the going rate for your position. In other words, what are you worth?

But how do you know that--unless you're in the enviable position of being hounded by headhunters or decide to launch a time-consuming search for a better-paying job someplace else?

TELL THE BOSS A THING OR TWO. The easiest place to start your research is the Internet. The Salary Zone (www.ioma.com/zone) charges for information, but the personalized research you'll receive from the site's compensation consultants might be worth the outlay. For $40, you'll get a report showing the average salary and bonus figures for someone in your area of the country with your kind of job and years of experience, as well as commentary on which professional designations, specialized training or job-specific responsibilities might affect the pay scale.

The Salary Zone service has recently expanded to individuals; its original clients were drawn from the opposing side of the table--managers who used the data to figure out what they should pay new hires. Now, though, the service will play both sides of the negotiations:

If you'd rather not pay to play, there are free Web sites with salary information. Recruitment Extra (recruitmentextra.com/salarysurveys .html) and the National Business Employment Weekly (careers.wsj .com/?content=cwc-salaries.htm) both offer mostly up-to-date salary surveys for different occupations. The federal government's Bureau of Labor Statistics is developing a National Compensation Survey; until it's completed, search the Occupational Outlook Handbook, a reliable bellwether for national average salaries (stats.bls.gov/ocohome.htm).

When you use these sites and others like them, make sure to pick out pertinent information. Avoid the gravitational pull toward surveys that show high salaries but don't distinguish among important factors such as where you live, the size of your company and your experience. Conversely, if surveys show you're being paid more than average, don't throw in the towel. Where you live and your value to the company could justify even higher pay.

Your professional association, preferably the local chapter, may have a recent salary survey as well. Again, match yourself to the salary level that most closely mirrors your own situation. Your peers, both within and outside your own company, could be a good guide, too. But should you ask co-workers what they make? Tough call. Sharing your bottom line could be like opening Pandora's cubicle, and could create a truly awful office atmosphere. There may be an easier way, too. "A lot of companies post job openings," says Michael O'Malley, a compensation consultant and author of Are You Paid What You're Worth? "They often print the salary range and midpoint. If you watch the company bulletin board, you can pretty much piece together the salary structure."

Finally, consider calling some recruiters. If you've developed a relationship with a few already, great. If not, try to get referrals from colleagues. Ask the headhunters for an estimate of what you could command on the open market, and factor that into your evidence.

With compensation data and a clear understanding of your contributions to the company in hand, you're ready for a sit-down with the boss. When you're negotiating for "something special at the end of the year," O'Malley notes, "it's a good idea to say to your boss, `Here are all the things I've done,' "and then tactfully bring up the idea that your salary might not be in line with your true worth in the job market.

If your raise or bonus falls short of what you deserve, don't keep your feelings a secret. If you're told the budget has already been set for the next year, ask when it can be reconsidered. "Some companies won't change your bonus at this point," says O'Malley, "but if you make a good case, they might take a serious look at the formula and change the way they calculate it for you next time."

Financial Services Industry

Rosy outlook for raises and bonuses

Kiplinger's Personal Finance Magazine, Nov, 1998 by Marc L. Schulhof

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