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5 Tips to Negotiate the Best Pay Increase at Your Next Performance Review

By David Bakke, Money Crashers Personal Finance

If the current job market isn't depressing enough, the projected data regarding pay raises in the coming year is even more dismal. According to the consultant group Mercer, the average projected pay raise for 2013 comes in at just 3 percent, barely outpacing inflation. With that in mind, you're really going to have to get to work, so to speak, if you expect any sort of significant salary bump in the coming months.

Here are five tips that can put you in a better position:

1. Set Your Own Goals and Achieve Them
Most companies set certain goals for their staff members. However, if you really want to impact the raise you may get at your next performance review, set your own benchmarks higher and work hard to achieve them. By setting the bar higher than your organization, you can display to your supervisor that you're on the fast track to a successful career, deserving of a healthy raise.

2. Ask for an Informal Review Now
If your next performance review is not due for a while, request an informal assessment of your performance to date. Inquire about ways to improve, as well as specific expectations your employer may have. If you don't know where the bar is set, your chances of reaching it are unlikely.

3. Do Your Research
If you're not empowered with information, you may very well sell yourself short. Check PayScale.com to research the going salary in your industry and for your expertise level. Don't be afraid to utilize this research during the negotiation process.

4. Let Your Employer Make the First Offer
As your performance review progresses, be sure to outline your achievements and the benefits they've provided your organization. But when it comes down to money, keep quiet – at least at first. It is important to hear the figure you are offered before you respond with a counteroffer, as the dollar figure offered might be much more (or less) than what you expected. In salary negotiations, he who speaks first usually loses.

5. Get It in Writing
Once the negotiation process is done and you've received a dollar amount, get it in writing. In some instances, a supervisor could offer a raise, only to say after the fact that "HR won't approve it." Regardless of your trust level in the company you work for, get any salary increase offers in writing.

Final Thoughts
Once you've negotiated a satisfactory pay increase, it's time to figure out what you're going to do with the extra money. There's nothing wrong with rewarding yourself with a purchase or two, but also consider long-term investments. You can plan to devote a portion of the increase to your retirement savings, or even use it to pay off your credit card debt. If you have kids, consider establishing a college fund for them, or boosting contributions if you already have one set up. It's great to negotiate the best raise you can, but it's even more beneficial to use that money to reach your long-term goals.

David Bakke is a contributor for the online resource, Money Crashers Personal Finance, where he shares tips for careers, education, and retirement savings.

 

How do you plan on negotiating the best increase at your next review? Let us know by leaving a comment below.


More from Money Crashers
How to Get a Raise or Job Promotion at Work

5 Employee Job Performance Review Questions to Ask

11 Effective Negotiation Strategies & Tactics to Score a Great Deal

Salary-negotiation_Jan21-2013
(Photo Credit: Victor1558/Flickr)

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