If You Are Underpaid, Read This!

If it were payday and your paycheck hadn't made it to your bank account yet, you would call your Payroll department and ask them why not. You'd say "Was there a delay getting the paychecks out? I don't see my paycheck in my bank account, and I need it to pay some bills this weekend."

With luck, your colleagues in the Payroll department would take your concern seriously. 

Everybody has to get paid! 

You wouldn't hesitate to sound an alarm if your paycheck went missing one Friday.

Yet many, if not most, working people are hesitant and fearful to tell their bosses "I'm underpaid!"

Lots of people are underpaid at work. The lousy economy gave employers a great excuse for underpaying their employees.

Sadly, many people took jobs at substandard pay levels, and haven't made it back to their market pay yet. Many of them have never asked for a raise.

They are waiting for their employers to bestow pay increases on them. That is a losing strategy!

No one is looking out for your career except for you. Where your pay is concerned, the same thing is true.  How would your manager know you're underpaid if you don't say something about it? 

If you are underpaid but not egregiously so, you can talk to your boss about it like this:

BOSS: So Alan, you had a question for me? I got your voicemail.

YOU: Oh yes, thanks, Rosemary. Listen, I  know that our annual reviews aren't until June, so I wanted to put a bug in your ear way in advance. I'm hoping to see a bump in my pay level this year, since I took on the database project and now I'm doing Joslyn's job as well as my own. 

BOSS: I hear you, but Joslyn was just a part-timer...

YOU: That's true, but in terms of impact, if someone isn't running the backup schedule and the maintenance on our systems we'd be toast. I just wanted to get you thinking about it -- if the company is giving out three percent increases like last year I'm going to slip further behind the market and I don't want to do that. I like this job. I like working with you. I want to stay here. 

BOSS: Okay, I understand. What sort of raise are you looking for?

YOU: Well, a three percent raise would be about twenty-four hundred dollars, so if that could be six to seven thousand dollars instead, I'd be happy. We're only talking about a difference of forty-five to fifty-hundred dollars per year - not a huge sum.

BOSS: Could we split the difference?

YOU: Here's the question. Do you think I deserve to be paid the market rate for the work I do? 

BOSS: It's hard to get approval for more than the standard increase. Let me think about it.

Unless you are working at a minimum-wage job, getting a raise above the standard level is not usually something that you can accomplish in one conversation. You have to do your research, make your case, and keep at it.

You have to let your manager know that getting you to the appropriate pay level for your responsibilities is not a trivial matter, but a fundamental leadership activity.

If you are grossly underpaid, you can take a different approach. In that case, you'll back up the truck and have a broader conversation with your manager, because now you're not asking your manager to grant you a pay increase all by himself or herself.

Instead, you're asking him or her to campaign on your behalf with the higher-ups who will have to approve your salary upgrade. (If your boss is the CEO, that's a different story!)

Since your boss will be selling other people on your pay bump, you'll need to equip him or her to sell the idea of your pay raise to other people. This is called "Selling the seller."

First, you'll get your boss on board with the idea of keeping you happy -- and keeping you glued to your seat, especially now that the economy is getting better and jobs are more plentiful.

Once your boss is bought into the notion of improving your pay, then you and s/he can strategize about how to sell the idea of your pay increase to other leaders.

Here's the seven-step process for Selling the Seller when your boss will not be the only person who has to approve your pay increase.

1. Conduct your own research on market salaries using Payscale and Salary. 
2. Calculate (the best you can, using your knowledge of your organization and making assumptions the rest of the time) the  cost of the Business Pain you relieve for your employer. Often the cost of the pain you relieve dwarfs your actual salary, even when benefits are baked into it (adding about 40% to your employer's cost for having you around).
3. Create a one-year Roadmap for your position. What will you accomplish over the next 12 months at work? What big, expensive and annoying problems will you solve? How will you make a difference for your employer dollars-and-cents-wise, customer-satisfaction-wise and in other ways? Include your assumptions and calculations in your Roadmap (or as an addendum).
4. Propose a new salary level to accompany your Roadmap. You're asking your boss to sign up for both your 12-month  Roadmap and your new, beefed-up salary level. Here's what you get, Boss : these results! Here's what I get: my market compensation level. If there are other things you need (equipment or training, for instance), include those things in your Roadmap, too.
5. Invite your boss to a Roadmap Meeting to talk about your plan and your proposal. Walk through your proposed annual program with your boss, and share your salary expectation, too. Get your boss's reaction and feedback to your Roadmap. Until your boss agrees that you're due a salary increase, you'll be in selling mode. Once your boss is on board, then you and s/he are in selling mode together!
6. If your boss says "I'd like to give you a raise, but I can't do it," ask "How can we look forward to create a Roadmap that will get me to my salary goal over time?" Don't let your boss off the hook if his or her initial reaction is "No dice." If your boss can see you reaching your compensation goal by hitting various milestones, then what are those milestones and what timeframe are we talking about?
7. If your boss is completely against the idea of raising your pay, withdraw. That's fine. You've learned a lot of things at this job that you can carry with you to the next one. Thank your boss for his or her time. After work, go home and launch a stealth job search. With or without your hoped-for pay increase at your current job, your muscles are growing!

Questions and Answers

What if I can't find a closely comparable job to my job in Salary and Payscale?

Check these databases using other job titles that correspond or overlap with your job responsibilities. Keep in mind that not everything you do on the job is included in your written job description, if you have one!

You should get paid for what you deliver and for your positive effects on your employer, whether your contributions are described in your job description (or suggested by your job title) or not.

Are there good reasons for an employer to pay under-market pay rates -- for instance, if they have a great working atmosphere or good benefits?

Remember that the market pay level is the average of the rates other employers are paying their employees for similar jobs to yours. Real data sets the market. An employer whose message is "Look at the nice atmosphere here!

"We have a great culture. That's why we pay less than other employers do for similar positions" is not a Human Workplace. Benefits and working atmosphere are great things, but people deserve to be paid the market rate for their services, and there is no business or human justification for paying less than that rate -- not unless you've got an ownership stake in the company.