How To Get Paid Your Worth

This is the time of year when companies start doing annual performance reviews. Your entire year’s work comes down to one conversation.

Some professionals leave their performance review until the last minute while others blow it off completely and do it, by the seat of their pants.

That’s a bad idea.

It’s the most important document you’ll write all year. At the end of the day, it’s the supporting material that is going to get you paid. Therefore, you’ll want to take it seriously, no matter what your level.

Hand in glove with the performance review, there should be a conversation around your comp.  Yet, most people never do this.

Most people leave it to the sole discretion of their boss. That is also a bad idea and a recipe for disappointment. 

To prevent this, I adopted a practice back when I was an associate on Wall Street (so roughly 20 years ago). I would have an annual conversation with my boss right at the beginning of the performance review process.

The reason is that you want to have that discussion at the time that the pool of money starts to get allocated to each department. Ensuring this conversation coincides with that timing will give you the best chance of getting paid what you deserve.

This is especially important if there is a unique one-off situation.

To give an example from my own career, I was once stuck working for a boss that I didn’t value, or respect. She knew it and she punished me for it with no raise and almost zero bonus for two years. As a top performer, that hurt. 

It also set me back to a position where I was grossly underpaid.

I decided to take matters into my own hands and leave the department. I sought out the help of a senior mentor.

Right before I switched roles, my mentor took over my department and became my boss’s boss. She knew my desire to leave, but now she wouldn’t let me go because she knew I was critical to her success.

This gave me leverage. I told her I would only stay if I was brought up to where I belonged in compensation. She agreed and said we would revisit it during comp time.

I began a dialogue with her in September. That year happened to be a year when the firm had huge losses due to the bankruptcy of the company that we had done a bond deal for. The firm announced that there would be no raises for VPs and above. Bonuses were also capped.

The conversation took 6 rounds of negotiations. It started with an increase of 50% . My response to that was “good start but not enough.” She had to go back to the well several times, to which I responded, “do whatever you have to do.”

I drew a hard line and wasn’t willing to budge an inch. 

That year, my compensation was one of five that year that had to get explicit sign off from the board. In the end, my base salary was brought up to market, which was a 115% increase.

Having those conversations early and before the money was finalized was the key lesson.

That situation was an outlier. However, I always encourage my clients to have an annual conversation setting expectations.

You always want to close the gap between what you think you should be paid and what your boss thinks you should be paid.

That conversation doesn’t have to be contentious. It just needs to happen.

No one likes doing it but detach from the emotion of the conversation so you can negotiate from a position of strength.

If you need help in preparing for these conversations, please reach out to me.

Good luck and here’s to your prosperity!