To discuss a pay raise, should I go to HR or my boss?

I’ve been a manager for more than six years after 10 years of service with my company. Three years ago, all managers received a 2% increase across the board, without regard for individual work performance. That was the last we heard on pay from management. I am feeling demotivated by my current salary due to rising prices and mounting family expenses. Should I go to HR or directly to my boss? — Land Mine.

It depends. If you have turned consistently strong performances for at least three years, go to your boss to explore the possibility of increasing your pay. Your boss may be too busy to pay close attention to these things. You have what it takes to ask for a raise and need to gently remind your boss. If you are not in that situation, go to HR for advice on company’s policy. Be diplomatic and pursue your inquiries with finesse.

Don’t be naive about asking for a raise if you’re a dead man walking with a poor performance record, hanging on only because the boss is tolerant. Going to HR to inquire about pay policies runs the risk of tipping off to your boss. Make sure HR is friendly. If not, you’ll be in a jam after HR informs your boss of your undeserved aspirations.

By consistent high performer, I mean your work performance must be rated above-average or consistently beyond the expectations of management. To be specific, you must have logged in at least 15 to 20% over the minimum requirement over two to three years. If I were your boss, I would not hesitate to give you the pay raise you deserve, if not give the equivalent in benefits.

To illustrate, let’s compare the case of salesmen “A” and “B.” Both have sales quotas of $50,000 a month. Over the past three years, “A” has logged average monthly sales of $60,000, which I consider an exceptional performance that should be rewarded with a raise, if not a promotion.

On the other hand, “B,” who is selling the same product, has met the sales target of $50,000 over the same period, the minimum requirement for the job. He should not be given a raise and must settle for the standard commission.

To ask another question: Why should you reward someone who has met expectations? This is the same question that I ask about handing out perfect attendance awards — a common practice in some manufacturing firms. To put in another way, why do you need to give a perfect attendance award to people who are required to report daily and on time?

This example I’m giving you is the same answer I gave to a young junior team leader at a call center. Be very clear about how “average performance” and “above-average performance” are defined.

IMPORTANT FACTORS

But tell me. Why should management be concerned about personal circumstances like rising prices and family expenses? Unless you’re working for a charitable institution, expect your management to ignore any such pleas. It will only be interested in improving your situation if you’ve proven yourself to be an asset to the organization. If you’re an average worker turning in only the minimum requirement, you’ll need a better reason to seek a raise.

You can rule out seniority. It will not count in dynamic organizations that are meritocracies. HR may well inform you that the organization following certain pay and perk standards that are based on the following considerations:

One, executive compensation philosophy.

Generally, organizations decide on the number of management job grades. The fewer the job grades are, the better as this “gives ample opportunity for high-performing employees to receive higher pay based on merit,” according to my former HR boss, lawyer Ranulfo P. Payos, a long-time vicepresident at the Employers Confederation of the Philippines.

Two, salary broad-banding. Related to number one, broad-banding requires collapsing and maintaining several pay grades into fewer broad bands, with each band having minimum and maximum pay levels, but without the traditional midpoint seen in other salary structures. The bands are established to make work skills and competency requirements imperative and relate them to market standards.

Three, internal and external equity.

“Internal equity” ensures that all management executives within the same organization are paid the same compensation and benefits, depending on whether an executive holds a “big” or “small” job compared to others. “External equity” means that executives are paid competitively relative to other organizations of the same size.

Last, industry salary standards. To make “external equity” work, your HR must be fully abreast of market requirements and salary surveys that ensure your current pay structure is competitive, if not above the pay package of other companies, competitors and non-competitors alike. These rates are dictated by industry competition, organization size, experience and the “hot skills” of people that are difficult to source.

HOW THEY SAY ‘NO’

One of the most difficult things to do, whether you’re the boss or HR, is when you’re confronted by an employee seeking a raise. Try to put yourself in their shoes and listen for their response. Make sure to get the right answer. Aside from the factors listed above, you may also hear reasons like budgetary constraints, poor business conditions, and competition.

In their attempt to be courteous and diplomatic with you, they may not even mention their views of your work performance. Therefore, be careful not to push your luck. Your personal financial standing is not as strong a justification for a raise as you think.

I know it’s disappointing, but that’s the way things are.