Thanks to Leah Moschella of Boston GLOW, I know about this amazing podcast, The Intern, produced by Allison Behringer. I am now a fan of Allison. The episode entitled What’s Your Worth shares a real life negotiation for a pay raise. To the best of my knowledge it is the only real life pay raise negotiation that we are allowed to be a fly on the wall. I had the chance to talk on the phone with Allison. She confirms this is not the full story of her negotiation. She crafted the many parts of the process into one succinct, enjoyable, and engaging story. The resulting story is a master class for everyone. Employees should listen to hear a negotiation before they have their own. Managers should listen to learn what is going on in the employee’s head. Men should listen so they can hear how different women’s negotiations sound from their own.

Spoiler alert:  Allison got a raise.  I believe there was the possibility for a bigger raise.  What could have been done differently to get an equitable result for the employer and the employee? Many things. There are eight things in particular that I believe are worthy of highlighting. This blog post will cover the first four. I’ll post part two with the remaining four next week.

F**cking Unheard Of

Here’s what James the Manager said as reason for giving a raise that keeps Allison underpaid.

     James the Manager: What I’m saying is, like, you’re six months in. You have this product that you essentially own. You are driving it. That’s kind of f**king unheard of. That’s really an amazing opportunity.

What I’m saying, James, is that Allison should be paid for the thing that she is doing that is f**king unheard of. You would not let her own the product if she was not good enough to own it. She far exceeds expectations and is doing producer work with an intern title. Let’s pay her as such instead of talk about her work as an opportunity for her career.

My Advice to Allison:  Agree that you own the podcast and that it is unheard of.  That is exactly why you deserve better pay.  Allison is like most women who according to McKinsey, have to perform while men only have to show potential for promotions.  Performing at such a high level should be rewarded now with pay and a possible promotion, not later.

Intern

Allison was hired as an intern. Internships by definition are designed to give experience to people with no experience. Internships have an expiration date. They are not to last forever. When hired, the agreement Allison signed stated that the compensation would be revisited in three months. It is now six months after she was hired. She is producing and hosting a podcast with 70,000+ downloads and sponsors. Both are above the success factors established for the job.

My advice to Allison: The ask should not be for a raise but for producer title and the appropriate pay as a producer. Comments that “To be fair, to be fair, like no intern is getting paid that,“ would not be made as objections to appropriate pay if the ask is different from a raise with the same title.

Not Cool

     James the Manager: We want to, like, look at this and then again at the end of season   one. More because we think it’s, we just think it’s, like, not particularly cool to sort of, kind of, renegotiate right in the middle of something.

Brilliant move, James. He just made Allison feel unprofessional for holding James to the agreement the company made with her to review her pay and that they are actually three month delinquent in doing so. Brilliant.

My advice to Allison: Call him on it. It’s disingenuous. “James, it’s not ‘not cool.’ It’s the agreement we made when I joined the company.”   Allison does not share in the podcast that there are any stipulations other than time passing for the review. If that is the case then she can counter James when he says, “three months in, we didn’t have anything.” Her response should not be to agree with him but to say, “there were no other conditions for a review other than time. I guess I’m the one who could say ‘not cool’ to changing the rules in the middle of something.”

Percentage is Meaningless

James the Manager can get as please as he wants about giving a 10% raise but as the math and the research shows, he’s at best 25% of the way to an appropriate raise. Let’s walk through it.

Employers are budgeting raises for 2016 at 3% on average. The rule of thumb is you should never change jobs unless you get a 10% increase than what you are currently earning. Well, if that is the rule of thumb for candidates then it’s the rule of thumb for employers to offer about 10% more than you are currently earning regardless what the market value of the job is. That is the first problem with using percentage to figure out a raise or starting salary – it does not take into account the current market rate. The other problem is that statistically women and people of color are earning 20%+ less than men who are white or has Asian ancestry.  Statistically, a 10% raise will not get them to the appropriate pay.

Here’s where those math word problems from school come in handy.

Allison is earning $50,000. According to her research, her job should pay $70,000 – $80,000. What percentage increase does Allison need to earn the appropriate amount for her job?

(70,000-50,000)/50,000 = 20,000/50,000 = 40%

(80,000-50,000)/50,000 = 30,000/50,000 = 60%

Answer is 40% – 60%. An average 3% pay raise will not get Allison to pay equity. A 10% pay raise, which is considered the equivalent of a promotion or new job is not enough to get Allison to the market rate for the job.

My Advice to Allison: Ask James why he thinks 10% is such an amazing amount. He states 10% with such flare that he obviously does. After he responds, talk how percentage is meaningless when you start so below market. An intern should start below market of an employee but using that intern pay to determine full-time real employment pay is meaningless. It is for this reason 10% is a meaningless reference point.

To be continued next week in part 2.

At its core, the pay raise conversation is the same as telling your boss about any other broken tool. You don’t sweat for one month about saying the Internet is down, the printer is broken, or your chair is uncomfortable. Instead you expect action to fix it and go about the rest of your day waiting for your manager to solve the problem. Borrow that mentality and the pay raise conversation just got less nerve-racking.

It’s 3:00 PM and you have a big meeting the following morning at 8:30 AM. The company printer breaks as you are printing the many materials needed for the meeting. You try all the tricks you know (turn off and on, check and replace the toner or ink, check for a paper jam) but nothing works. Off you go to your manager informing her that, “the printer is broken and we have the Cuddy meeting in the morning!” You don’t even need to finish the rest of your thought. Your manager has the solutions at the ready and replies, “let me take a look and if I can’t fix it, you’ll need to go to a print center.”

You knew the options as well but your boss needed to approve the cost of using a print center. It is not your job to decide to spend that money. It is hers and you know it. The same can be said when you know your pay is not enough aka broken. You know the solution (more money please) but it is not your responsibility or authority to create. It is your manager’s.

Know the problem, state the problem, and then sit back and wait for a solution to be suggested. Granted you may not like the initial solution and will need to state that your paycheck is still broken. It is not until this moment, that I recommend employees throw out their pay and benefits ask.  You want to give your boss the chance to offer you more than you expected.  It can happen and often does.  Sure you still need to know what your ask is and what your goal is. You just don’t need to put all the solutions on the table when you point out the problem.

I hope you don’t think I am referring to you as a tool. No one wants that. The tool is your paycheck. The right pay keeps you with the employer and employers hate turnover. The right pay keeps you motivated to do the job well. The right pay keeps you focused on work and not on your bills. Truly, it is just as important to your employer to find the right salary for you as it is to you.

Showing financial impact is the best way to get a raise from your current employer and a high first offer and ultimately an even higher final offer from your next employer. If you are like many working women, you probably don’t think you have much financial impact making it hard to get higher pay.   My advice to you – Think Recommendations and Decisions, Not Reports.

I can’t remember the last client who did not have a least one line on her resume about the amazing reports she created. They were sexy. They had pivoting charts. They were 3-dimensional. People wept when they read them. Unless you are an administrative assistant, report specialist, or report designer the inclusion of them on the resume lessens the value of your work. Oh, I know, reports take time. It takes time to pull all the data together. It takes time to organize them in a meaningful manner. It takes time to design them so the important information stands out. What would a business meeting be with a report or PowerPoint presentation to mull over? How dare I say reports are not important!

The thing is that it is not the creation of the report that is meaningful. It is either the recommendation you make to the people who see the report or the decision you make based on the information in your report that is important. For example here’s a line from one client’s resume:

“Created tracking & reporting tools to measure progress, improve budget accuracy and aid forecasting.”

I asked her about the decisions based on these reports.   For one project this report saved 3 months work. Three months of payroll. Three additional months of being able to sell the finished product. Her ability to make decisions that save three months are what people want to hire. The ability to save $X and generate an added $Y is what employers pay good money for. The new bullet point on her resume now looks more like this:

“Created a net increase of $W by eliminating 3 months in project time by consistently reviewing progress, budget, and forecasting metrics in my own proprietary reporting tool.”

A similar example is:

“Conducted cost benefit analysis, modeled long-term costs, presented data for Executive review.”

When we were done discussing it became:

“Proposed $X in savings to the Executive team based on cost benefit analysis and modeled long-term costs.”

Good recommendations and decisions are made based on information. The collection of the information is not the end result. It would be like a great chef listing that she can shop for good ingredients. That she can tell when a tomato is ripe. A good chef boasts about her signature dishes, her Zagat’s ratings, and her Michelin star ratings.   It’s not the collection of ingredients that is important. It is what she does with them – the finished dishes – that are important. In business the finished dishes are your decisions and your recommendations. So stop flaunting that you know how to grocery shop and start getting your future employers hungry to hire you for top dollar by telling what you make – amazingly good and profitable decisions.

I typically spend time role-playing with clients. I know, doesn’t it sound horrific? No one wants to be put on the spot. No one wants to show that she truly did not understand some part of the negotiation training. No one wants to show how nervous she is about negotiating her pay. These are exactly the reasons we role-play.

I find one stumbling point very interesting. I ask the question, “What do you want?” while playing the manager. The reply often is a laundry list of WHY the woman should get more pay, better perks, or that promotion with no reference to the WHAT she wants.   I then ask the question again. “Tell me what would make you happy?” Again no direct answer is given.   I come out of manager character and ask the client to listen and answer just the question being asked. Back into manager character I ask, “If I could give you everything you want, what would it be?” This is after determining goal pay, a counter-offer, and the benefits that matter to the clients. Still no direct answer.

My clients are not alone getting tongue-tied. Many of us struggle to be direct and speak our mind. To successfully negotiate anything you need to KNOW what you want before you can get it. Then you need to be able to STATE what you want. I think the issue lies more in the knowing than the ability to state it based on my non-scientific research of clients, students, and workshop attendees.   So much pressure is put on the answer that you may freeze.

What if you can’t achieve what you want? Then you try again.

What if no one will give you what you want? Then figure out a way to get it yourself.

What if you are not deserving of what you want? Of course you are deserving. You are YOU after all!

What if what you want is crazy? Great, because it’s the crazy stuff that is really worth going after.

What if what you want changes? Of course it will. I still don’t want to kiss Danny Bonaduce of Patridge Family fame.

Sure, in my personal life I want love and companionship and world peace yet what I really want is to eat chocolate every day and not gain a pound nor worry about my cholesterol. In the business world I want a job that I’m good at and enjoy while being paid appropriately. I want to be acknowledged for that work. I want to have a strong enough network that I know I can find a job should I suddenly be without a job. I want to understand the signs at work that I’m never “suddenly without a job.” I want my job to be an interesting part of me but not the definition of me.

Now tell me, what do you want?