Amid economic uncertainty, this year many Indian companies won't match the average 9 percent to 10 percent pay raises provided the last two years. But for high-performers, it is still possible to receive a higher raise than average, since companies don't want to lose good employees.
If you deserve a better pay raise, should you simply hope for the company to recognize and reward you, or should you ask for it?
Employees in India generally are shy when it comes to discussing pay raises, say HR experts. They typically make do or leave the company. But that may not be necessary. "Most professionally run companies don't mind their employees coming to them and speaking openly," said Udbhav Ganjoo, Hyderabad-based head of HR at pharmaceutical firm Mylan Laboratories.
According to a study of 160,000 workers in the U.S. by compensation data firm PayScale, 7 out of 10 employees who asked for a raise got it. In India, employees also can make such a demand, so long as there is sufficient rationale for it. But they should think hard before making that request; they don't want the manager to see their request as a signal that they are looking to leave.
"Only if you believe that [receiving a higher pay raise] is possible and justifiable should you be going to have this conversation," said Purvi Sheth, chief executive of Shilputsi, a management consulting firm in Mumbai.
HR experts share the following tips on how to get the best results when negotiating a higher pay raise in India.
Time It Right
First, figure out an ideal time to discuss your pay raise with the manager. Don't wait until after the increments have been announced, as by then budgets have been decided, and there is little room to make changes.
One opportune time could be during your annual performance review meeting and before company budgets are finalized. At the end of your review, you could inform the manager of the kind of raise you're expecting and why.
Other good times to discuss compensation could be right after you have finished a project successfully, scored a big win in your field or been given additional roles. Set up an appointment, letting the manager know what you want to talk about.
When deciding on timing, also pay attention to details. For instance, if the manager is struggling with a big project, wait until it is over to have the meeting so that he or she can give you proper attention.
Know What's Expected from You
If you believe you deserve a higher raise because of your higher-than-average performance, be clear on how your performance is measured. Ideally, your goals and performance metrics should be laid out at the beginning of the year. So if you deliver a certain set of goals, your performance would be considered satisfactory, but if you do more, you would be considered a superior performer.
If these metrics haven't been spelled out, schedule a meeting with your manager during the year to define them. Discuss what you've achieved so far and get feedback on your performance. "This is important, so that both you and the manager are up-to-date on what was expected from you," said Praful Bhat, former HR head and current head of manufacturing and supply chain excellence at Mumbai-based Godrej Agrovet, an agribusiness.
Prepare the Proof
Before any pay raise conversation, prepare your justification.
"Have well-documented evidence of your work," said Ajay Oberoi, chief people officer at IDBI Federal Life Insurance in Mumbai.
List your accomplishments, contributions and everything else that supports your case, and back it with as much data as possible.
If you brought in results greater than what was expected from you, highlight those projects or duties when you went beyond the call of duty. Perhaps you contributed to the company in other ways. Include any cross-functional work you've done. If your responsibilities have been expanded but your salary hasn't kept up, list those new responsibilities.
Perhaps you are being paid less than the industry average for your position. Get salary data from websites like PayScale or Glassdoor, or from other industry sources, to know what you are worth. This data can be presented to your manager to contrast with your current salary.
Be Mindful of the Context
If the company is having a bad year, the pool of funds from which raises are given out would have shrunk, which in turn could result in a lower pay raise.
"If they don't have money in the kitty, you also need to understand," Bhat said.
Any case for a higher raise in this scenario must show why you should be an exception. Also, remember that salary raises can be tied to factors other than performance. If an employee is a high-performer but isn't a team player, it could hamper a large pay raise.
"You achieve your targets, but it's also important how you achieve them," Ganjoo said. "Are you following the values of the organization?"
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How to Deal with 'No'
If the boss says no to a raise, that may not be the end of the story. Ask why your demand is being rejected. If it's because something is lacking in your performance or skills, request specific details. What do you need to do to fill the gap? Set up a time period—say, six months—after which you can revisit the conversation with the manager.
If the demand is being rejected because the company doesn't have the funds, you can negotiate other perks. These could include more vacation time, a foreign posting or the chance to join a career development program.
However, if the manager declines a justifiable pay raise without giving a good reason, that may be a signal that the company isn't professionally run, and it may be time to look elsewhere.
Shefali Anand is a New Delhi-based journalist and former correspondent for The Wall Street Journal. You can follow her on Twitter