Skip to main content

How to Ask for a Pay Raise After 1 Year at a Company

Katy mentors and educates young professionals and helps those beginning their careers and financial journeys to make informed decisions.

How much of a pay increase should you expect after 1 year?

How much of a pay increase should you expect after 1 year?

You've only worked for a company for one year, so what raise will you get? Should you ask for the raise or just see what happens?

A proactive employee will ask for a raise after this first year and not leave it up to chance. But they go into the first pay discussion armed with a thorough justification for that raise.

Use this first-year milestone to evaluate your career by doing the following.

  • Gather data about your performance.
  • Learn how to have good discussions with your manager before the pay discussion about their expectations.
  • Go through the process of updating your resume with your accomplishments, even if you don't intend to leave anytime soon.

This article will help you take steps to put yourself in the best position to secure a raise. You'll also learn what raises and promotions are typical after the first year at a company.

When to Ask for a Raise During Your First Year

In large and medium-sized businesses, there is usually a year-end performance review. This period won't line up perfectly with your start date. You will probably go into your first performance review with less than a year of experience and be wondering if you will get a raise this time. By your second performance review you have with that company, you will have more than a year under your belt.

So, is the annual performance review the best time to ask for a raise? It's where you'll be awarded a pay increase, but it should not be the first time you're discussing performance with your manager. You really can't expect a raise if the first time you're discussing pay and expectations is at the annual review.

Have a discussion well in advance of the review (six months at least, if not immediately when you start) with your manager about what it takes to get a raise at the upcoming review.

Frame this discussion around what your manager expects out of you and how you can help the company, but make sure you come out of it understanding how that performance relates to an increase in pay. Write down the actionable items your boss has for you and come up with a plan with him or her to break the big items out into manageable chunks. This plan is some of the documentation you will take with you when you ask for your first raise.

How Much of a Pay Increase Should I Ask For?

How much you're going to ask for a raise is going to vary widely across positions and industries. The figure will ultimately come down to how much you contributed to the bottom line since you’ve been working there.

When employers are determining your salary and raises, they usually review salaries of employees by comparing them with similar positions at other companies. There are various compensation databases that companies may subscribe to. Some may even decide to consult a salary consultant. Presenting the market value rate to your employer for the role you’re in is an effective way to ask for a raise.

Assessing the Market Value for a Raise

Calculating your worth as an employee is not always a straightforward process. This is especially true if your company does not have standard processes for raising wages. Take control of negotiations by investigating the salary trend or fair market value of your job to give yourself a foundation for assessing the value of your work.

Take advantage of employer-reported salary data on outlets like Salary, Indeed, or Glassdoor to retrieve this information. Then, research your fair market value in three simple steps:

  1. Match yourself to a benchmark job. Don’t make the mistake of assuming that your current title matches the responsibilities of a job with the same title at another company. Only reference data that aligns with your current job description's skills and responsibilities.
  2. Identify company variables. Knowledge of the size of your company, the industry you work in, and the geographical trends in your region can also be obtained by employer-reported data. These findings will only increase your credibility during the negotiation process since salaries tend to vary across these factors.
  3. Evaluate YOUR performance. Appraise your personal attributes and performance as they relate to your overall value. Be realistic in detailing all of your previous accomplishments, education, and relevant experiences. Don’t forget to mention the intangibles (punctuality, teamwork, and leadership).
Give your manager notice that you plan on discussing your compensation in the meeting.

Give your manager notice that you plan on discussing your compensation in the meeting.

How to Ask for a Raise

Asking for a raise after just one year can certainly be intimidating. Make it a little easier by discussing pay and performance frequently throughout the year so this is not the first time you're talking about salary with this manager.

Whether you are asking for a raise at a yearly pay discussion or in an ad-hoc meeting with your boss, you want to keep two big items in mind.

  1. Give your boss advance warning of what the discussion will be about so he or she can prepare. You want to give your manager a heads-up about what you will be discussing. Ideally, you will have set expectations soon after you started working on what accomplishments would merit an increase in salary.
  2. Come as prepared as possible. The preparation on your side will be a lot more in-depth. You want to capture the significant results of your action plan from the last year. Show beyond a doubt that you deserve that raise by showing in black and white how you contributed to business results.

Starting the Conversation

It would be ideal to have the meeting about your raise with your manager in person. Use video chats to avoid asking in an email if at all possible. If your company conducts performance reviews, then it may not be necessary to schedule an additional meeting with your manager. In either case, inform your manager that you plan to discuss compensation in the meeting.

For example, you could say:

“Can we dedicate some time during my performance review to discuss my salary?”

“I’d like to set up a brief meeting with you to discuss my compensation. Please let me know if [time and day] works for you.”

Approach the conversation with the same seriousness you had in the job interview. Consider dressing more formal than casual for this meeting even if your job has a relaxed dress code. It is not necessary to present an elaborate presentation for why you deserve a pay increase, and it probably isn’t the best idea to state your desired pay increase right off the bat. However, by now you should be prepared with a specific dollar amount in mind.

Making the Pitch

Thank your manager for meeting with you. Be positive, and cite specific research sources for the information that you presented.

“I have not only met the performance targets we set for my position when I was hired, but have also gone beyond that threshold. I am asking for my salary to be increased to reflect my current output. I believe a raise of [x] is commensurate with my responsibilities and the field's standard.”

"Based on the research I’ve done, which includes looking at averages for my job title in this metro area and considers my tenure here, my years of experience and skill set, a salary increase of X% is appropriate."

If Your Boss Says "No"

Respond with something like this if you are denied a raise:

“Since an increase in salary isn't an option, would you consider other ways of compensating my performance? I would love to work from home one day a week, have an equipment upgrade, or have my number of sick time or vacation days increased.”

If you hear ‘no’ again, respond with something like this:

“Can we set some benchmarks for me to aim for in the next few months and revisit the question in the future?”

What Not to Do When Asking for a Raise

Asking for a raise is a stressful process that can excite our nerves and inhibit our ability to make decisions that are in our best interests. Keep these tips in mind when you decide to make the leap.

  • Avoid asking for a raise at a stressful time for your company or supervisor.
  • Prepare to leave a quick summary of your accomplishments, responsibilities, and/or competitive salaries for your job in the form of a bulleted list to help with the process if you know that your pay request needs to be approved by your manager's supervisor or someone in Human Resources.
  • Don't threaten to leave the company if you don't get a raise unless you are prepared to follow through.
  • Don't present false statistics or take undue credit for projects.
  • Do not sell yourself short. Speak with certainty by avoiding passive phrases like "I feel like" and "I believe."

How to Deal With Not Getting A Raise

So you powered through the intimidation and anxiety associated with asking for a raise only to be denied. This can be a very demoralizing event, but there are some productive steps you can take to be proactive in your efforts to secure the pay increase you want in the future.

1. Remain Calm

It’s natural to experience feelings of hurt and incompetence after pleading your case and listing your accomplishments. But all is not lost. Don’t read into your denial as you not being good enough. Maintain a calm and professional composure to avoid creating a hostile work environment.

2. Ask Why

Be open to the fact that there may very well be a good reason that you were denied. It seems as though there is never enough money, so depending on the size of your company and the field that you are in, being refused a raise because of budgetary reasons might be valid. Arm yourself with knowledge

3. Focus on the Future

Seize this opportunity to discover what it would take for you to receive a raise in the future. Take your time in assessing whether or not you will be able to commit to the plan that your manager laid out. If you can, then great—set goals and crush them. Stay motivated by starting off with small feats first. If there seems to be no plan in place for your advancement, then it might be a good idea to think about employment elsewhere if you want a pay increase.

What to Expect After the First Year Salary Discussion

After just one year you might not get anything beyond a standard cost of living increase. Don't be too disappointed if that is the case. There will be some years your company can't give you a very big increase even when you deserve it. If you were hired starting at a fair compensation, you're probably still not below market rate.

Regardless of the results, you did initiate a conversation with your managers about how you contribute and how to get properly compensated for that contribution. You let them know you are aware of your place in the company and how you can make a difference to operations. This is a great start!

On the other hand, if this process has opened your eyes to the stringent raise policies at your company you may need to look elsewhere for that big salary increase. Leaving a job before 1 year can be a good career move if done tactfully and for the right reasons.

Try to keep your cool if you're denied a raise. Keep a good face while planning your next move.

Try to keep your cool if you're denied a raise. Keep a good face while planning your next move.

Raises Based on Merit

Merit pay or incentive pay is a goal-based evaluation approach to compensation that focuses on performance towards an objective rather than an increase based on your tenure with the company or cost of living adjustments. Ideally, companies that implement the merit system when there are already detailed measures in place to track the performance of employees. Advantages of the merit system include:

  • Rewards high performers. Merit pay rewards those who are performing at their best; the system becomes an incentive for efficient productivity.
  • Communicates company's expectations. The nature of performance-based evaluations require that the company's objectives and expectations be clearly articulated so that employees know exactly how to map out their goals.
  • Creates healthy competition. Merit pay encourages employees to be creative in achieving results that they can be proud of.

When the means of tracking employee contributions is unclear, then the merit system becomes less effective. This can lead to disadvantages such as:

  • Favoritism. Without clear measurable outcomes, determining the value of an employee becomes a subjective endeavor.
  • Uses up time and resources. Companies spend a great deal of effort devising up the metrics necessary for the merit system that could always be spent elsewhere..
  • Communication breakdowns. The nature of metrics can sometimes limit the ability for supervisors to communicate each employees contribution and value to them.

Set Yourself Up for Future Raises

Whether you secured a raise or not you can review the process and set yourself up to secure a raise the following year. This was your first experience with the performance review process with your company and now you should have a clear idea of how to ace it next time.

If there are any evaluations you still have questions about, bring those up with your manager. They will want you to clearly understand how to be successful in that company.

  • Simple Salary Negotiation for Engineers in a New Job
    Every job you take without negotiating leaves money on the table. Learn how to have the salary negotiation conversation with a recruiter in the job application process with 2 to 10 years of experience as an engineer.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2018 Katy Medium