How to Be Prepared for a Salary Review
As a manager in a seed-stage startup, I recently went through the yearly salary review process for both myself and my team. Every time I go through this process, it strikes me how employers and employees can be ill-prepared. I’ve compiled my selection of quick and easy-to-use tips to prepare for a yearly salary review process.
Not everyone has negotiation or public speaking skills that come naturally. This is why preparation is key when entering the salary review process. If you’ve prepared your pitch and covered all the necessary topics, you will be able to easily get through the process, answer any follow-up questions, and of course, defend your case.
For Employees
As an employee, here are the 3 top things that I’ve always prepared and brought up to any superiors when discussing salary increase:
- My role and responsibilities (R&Rs) — current tasks, projects and performance.
- My (great) potential for the business — where I am heading, what I’ll do, along with concrete examples of what I will contribute to and how.
- How much I wanted.
Your Current R&Rs
First, it is primordial to highlight your previous contributions in the company: the projects and tasks you’ve worked on and how much these have brought back to the business. Keep it as factual and quantitative as possible. Also, bring up any relevant work you’ve done that had qualitative results. This will set the tone for the rest of the review process.
Your Business potential
Once you’ve set the tone with all the great things you’ve contributed to for the business, it is time to showcase your future potential.It can be about a problem you’ve noticed that needs to be addressed, a project you could work on or even better, something you could optimize because of your unique skill set. If you don’t quite have the skillset, then be honest, and indicate what you need to get there. This is about finding the opportunity that will set you apart.
If possible, add a dollar-amount to your future projects so that you can quantitatively highlight your impact potential. This is a key element, as it allows managers or execs to understand how much value you can bring to their business, and therefore, decide how much they invest in you.
The salary justifications
In order to justify the increase you are asking, one key aspect is to benchmark your position in the industry. It is important that you understand the salary landscape of your current position in your market, as this is something you might be challenged on.
Another key aspect is to consider your current company’s financial health. Seed-stage startups don’t always have the same capital as mature, global companies, for example. However, you also need to think of the company’s potential as well as other perks, which can compensate for a lower salary.
Last but not least, depending on your company, you can also explore the option of asking for other perks instead of money, such as shares, extra holidays, courses, parking and transit passes, daycare support, etc.
The format
Managers and exec teams have lots to do and read about, so keep it short and sweet. A few bullet points should do. Here is a quick template to get you started.
For Managers
As a manager, you may have to also stand up for your team and make sure they obtain what they deserve.
The preparation for managers is similar to the one for employees. You need to assess your employees individually, what they’ve achieved and they could potentially achieve for your team or company, then look at market values and benchmark their salaries.
This being said, you also have to keep in mind the company budget, the business priorities and company performance as well. Alignment with the rest of your exec team is key.
I’ve recently sat down with my CEO and COO to discuss how we’d move forward with the salary review. Here are some best practices I came up with when talking about salary review :
Whether you’re a manager or the CEO, most of your success relies on your team. Having a fair and open-minded culture about salary review will boost employee morale and ultimately translate into better results and overall performance.
Hope this helped :)
