St. Martin's Press

Robert Herjavec: The Shark Tank Way to Ask for a Raise

May 17, 2016
Ideas
Robert Herjavec is a businessman, investor on ABC's Shark Tank and the author of You Don't Have to Be a Shark.

Of all the dealings people have with their boss or manager, probably none makes them more edgy than asking for a raise. That’s understandable. Everyone prefers to be sufficiently rewarded for his or her work, and everyone would like to believe that their worth is so obvious that they shouldn’t have to negotiate a fair return. It sounds too much like begging. When they feel that they are insufficiently paid, they need to take action on their own. Like everything else associated with life, they can do it very well or they can do it very poorly.

Most people do it poorly.

Failed requests for a raise are similar to failed pitches made on Shark Tank. No surprise there – both involve asking for money. The big difference is that employees already have a relationship with the person from whom they want money, but we know little or nothing about the people who appear on Shark Tank. If we turn them down, we don’t expect to see them again. But if I turn down a salary increase from an employee whom I generally admire and want to retain, I’m in a difficult spot. In many ways, I want them to make a good case for a raise, because it will confirm or maybe reveal their value to my company and make it easy for me to justify raising their salary.

But this doesn’t always happen. As on Shark Tank, some efforts make me roll my eyes wondering not only why the employee believes he or she deserves a raise, but also how they managed to find the nerve to even ask for one. In both cases – budding entrepreneurs on Shark Tank and hopeful employees in my office – the same weaknesses keep appearing. Here are a few:

Poor preparation. Getting a raise is never “Ask and ye shall receive.” It’s about making a sale. Which means, once again, that having good selling knowledge and instincts pay off in yet another way you didn’t expect.

As an employee, you’re not begging for alms or counting on a hand-out – or you shouldn't be. You are engaged in a business negotiation, and you should think of it in those terms. A personal relationship may exist with your boss or manager, but it is also a business negotiation like any other: She has control of money (or access to it through her supervisor), and you want a larger share of it. How do you get it? By selling your value to the company, which involves justifying the quality of your work and your performance on the job. You need to do it in the right setting, with the right tone, in the right place and at the right time. And you need to be prepared to back up your claims.

The biggest difference between the selling skills I have been discussing and the ability to ask for a raise is the matter of relationship building. As an employee you have, I can assume, a relationship with your boss already so there is no need to build one. Nor is this the time to enhance or repair it. The value of the relationship is the ability for each of you to speak both casually and honestly to each other.

Time and again on Shark Tank, we encounter people who ask for hundreds of thousands of dollars strictly on the basis of their invention or plan. They, of course, believe they have come up with a wonderful new idea that cannot possibly fail. And we don’t. Not right away. We need evidence. So we ask to see sales and profit figures or enquire about the exclusive nature of their product or wonder how they plan to spend the money we are expected to hand over. If they can’t provide a reasonable answer, our response usually consists of two words: I’m out.

Don’t fall into that trap when asking for a raise. Be prepared to sell your value to your boss, with solid facts and a respectful manner.

Unreasonable expectations. Do you honestly believe you are worth twice as much money as you’re earning now? Good for you if you have high expectations; bad for your chances if you’re not able to justify them.

Most companies budget about a 5 per cent annual increase for salary costs. About the only way to reasonably expect an increase of more than 5 per cent or a raise in salary more than once a year is by being granted a major promotion. Asking for too much money without a serious effort to justify it suggests you are either out of touch with reality or greedy. Maybe both. Neither is impressive to your boss.

Lack of confidence. You’re nervous about asking for a raise? No surprise there. So are the people asking for investments from us on Shark Tank. We prefer not to see nervousness, either as bosses or as Sharks. We feel more relaxed and attentive when someone making a pitch for money does it with confidence and assurance. It strengthens your case when trying to convince your boss that you deserve a raise. If you can find a way to hide your nervousness and find the balance between confidence and arrogance, you’ll improve your chances of success.

Executives of successful companies agree that good employees represent their most valuable asset. These executives don’t resent dealing with reasonable requests for raises as long as the employees making the requests are prepared to justify their value. Keep that idea in mind.

I can’t promise that the following 10 steps will ensure getting a raise every time you use them. But I can promise they will add to your confidence and even help impress your boss.

1. Timing is important.

Don’t ask for a raise during your annual performance review meeting. Unless you need to follow your employer’s established schedule for raises, make your request three or four months before your review, when a raise can be budgeted according to your performance. Another hint: try asking for your raise late in the week, preferably on a Thursday or Friday. Managers tend to be more responsive just before weekends. Make it clear when you ask for a meeting that you want to discuss your remuneration level (note it’s “discuss”, not “ask for a raise”). No one appreciates being blindsided with an unexpected challenge or demand.

2. Do not beg or plead.

I’m sorry if your day-care costs have gone up or your spouse lost his job or some other event has proven a disaster to your finances. That is your problem, not mine. As a manager I will listen to your tale of woe, buy you lunch, consider a loan or advance, maybe help you find credit counseling. But there should be no connection between your life challenges and the operation of the company you work for. Any assistance offered by your boss or the company you work for must be viewed as charity, not as remuneration for your work.

So don’t launch your case with tales of your adversities. Start by convincing your boss that you deserve the raise. If an opportunity to mention your personal difficulties arises in the conversation, feel free to discuss them if you feel comfortable about it. But you’re asking for a justified raise, not corporate sympathy.

3. Add to your worth with a commitment.

Earning a raise isn’t about the past; it’s about the future. You are proposing that the increased salary or sales commissions you earn over the next 12 months will be more than balanced by an increase in your value to the company. Make this point effectively, and you improve your chance for more money.

Take time to consider how to improve your performance level. With new training? Assuming extra responsibility? It doesn’t have to be a major overhaul of your duties. Just confirmation that you represent a valuable asset to the company.

4. Look for ways to gain leverage.

Try to find some aspect of your work that is valuable and unique, and be prepared to mention it. If you are the only employee qualified to perform some key aspect of the business, or are responsible for generating substantial sales or profits and your income is out of line with your contribution, don’t assume that your boss is aware of it. Ensure it’s known.

5. Keep the Three Ps in mind.

Practice your pitch until you know what you are going to say in response to the questions you are likely to be asked. Understand the company’s Perspective when it comes to awarding you a larger salary or commission. And be Pro-Active by asking what it will take for you to earn the raise.

6. Be confident, not cocky or arrogant.

Unless you are both serious and prepared, never threaten to look elsewhere for a job if your demands are not met. Empty threats do not help your case. In fact, any threat of this kind could end your career with your employer. Whenever I hear an employee say in effect, “Match my offer or I’m going elsewhere,” I know their mind is already made up to leave. And how do I respond to raises backed by a threat? I don’t. Neither, I suspect, will your boss.

7. Bring proof of your performance.

Look for ways to prove that your work has improved over the past year. Suggest that your improved performance will extend into the months and years ahead, in line with the company’s goals. Put the facts on paper, or use a PowerPoint presentation if necessary. A written summary of your expectations and rationale will be more than convincing to your boss; it will be helpful if he or she has to go up a management level or two to get approval for your raise.

8. Never make it personal.

You’re talking business, not the unfairness of life or your perceived unfairness of your boss. Stay cool and calm while discussing your request. Remember that your manager may have to follow a corporate policy, consult with a manager on a higher staff level, or do both. If you have an issue about your boss being unfair or unappreciative of your work, deal with it separately, not when you’re pursuing a raise.

9. Overcome the gender difference.

I expect managers in my company to be gender neutral when it comes to setting salaries. One challenge still to be overcome is that while women represent some of our best salespeople and account managers, they tend to be less assertive than men. Learn to be assertive without being aggressive or unreasonable. If you have the ability, the attitude, the training and the performance to perform your job at the level your employer anticipates, you have a case to seek an appropriate salary level.

10. If all else fails, change may be good.

My warning about never threatening to leave your current job if your salary expectations are rejected still holds. If you are convinced that refusal to deal with your salary request is unfair, it may be better for you to move on. But be sure to prepare for the move, and avoid making a snap decision.

Start by answering some hard questions that extend beyond your employer’s refusal to grant you a raise. Was there a promise of a future promotion? If so, how sincere do you believe it was, and how much is it worth to you? Consider the value your relationship with work colleagues – if they represent an important part of your social life, will it be easy to give it up? And how much are you perhaps missing in future work opportunities by staying where you don’t feel valued or appreciated?

If you are thoroughly disappointed in the response to your request for a raise, give yourself the freedom to look around for other opportunities. You may discover something far more rewarding in salary and job satisfaction.

Or you just might find that your current situation isn’t as bad as you thought.

Adapted from You Don't Have to Be a Shark copyright © 2016 by Robert Herjavek. First hardcover edition published May 17, 2016, bySt. Martin's Press. All rights reserved.


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