LMSM 7 | Asking For A Raise

 

Do you feel as if you are underpaid? Frank Cava and Ian Mathews talk about the best approaches to use with your company. Having been approached countless times for more money, we believe that timing, delivery, and judgment play a major role in how successful you will be. In this episode, learn how to tell if the market has moved and your pay has not, how to tell if you are underpaid, how large discrepancies in pay happen in companies, and whether you’re producing enough to justify more money. Frank and Ian also discuss why timing is everything when it comes to pay, what is important to your boss when considering this request, when you have the most leverage to request more pay, whether your results are easily replaceable. They also dive into the things to focus on instead of salary and how you can move from incremental to exponential increases. It is okay to be honest with your manager if you are thinking of leaving. Stop talking in terms of your pay, start talking in terms of your value. Discover how to respond to any pay raise and learn the tactics to avoid if you want to maintain a relationship with your manager.

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How To Ask Your Manager For A Pay Raise

How are you?

I am doing fantastic.

We are going to talk about money. The topic now is, “How should I ask my manager for an increase in pay?” It’s a complex topic and we’re going to need to qualify it on a couple of different things, on the size of your company, on what exactly does more pay mean to you and how much more pay are you looking to make. Before we dive into trying to answer that question because it’s not as simple as giving someone a script. I think we can start with some questions that someone would need to ask themselves before they even bothered with that discussion. You and I went through and put together a list of questions that we would ask ourselves if we were working for a company before we even bothered.

The first question is as important as any. I’ve been consistently shocked with how ignorant people could be on this topic over the years. The question that we talked about is, “Is my company thriving? How healthy is my company?” There are a lot of ways to know this but one is paying attention and listening to what your managers are talking about. If you’re publicly-traded, you can read a quarterly report but most people don’t work for a big company like that. It’s simple to know how well your company is doing. Are you adding people? Are you subtracting people? Is it a flat baseline? How are sales? Do the managers seem to be stressed out and putting a lot of pressure on people to get more sales? Are there more happy hours? Are there more times where they’re trying to give more encouragement because they’re trying to keep people? Those are all signs or signals that you can read if you’re paying attention.

I have a small company, 25 people. You work for monster companies. What’s the most you go without having some check-in with the uppers, quarterly? Even in the time of COVID, we do some stuff regularly. If you don’t know how your company is doing, it’s probably that you are the problem or you are working at a terrible company. Even small companies with communicative leaders, they’re going to tell you like, “This is where we’re at.” You can easily parse out, “Is this a good or bad time for us?”

The stock market negatively reacts to uncertainty and positively reacts to certainty. Businesses are no different. Click To Tweet

As a manager, when someone’s asking me that and they’re asking me for a raise at a time where we’re cutting staff, we’re stressed out about a big drop in sales. We went through a COVID pandemic. You can imagine going to your manager and asking for a raise if you worked in the hospitality industry or the airline industry in March or April of 2020. You would demonstrate to me that you have almost zero emotional intelligence. You are business clueless, and that’s not someone I want to pay more. That’s not someone I’m looking to retain if, during a time where the company is trying to survive, you are thinking selfishly. That kind of person is not the kind of person I’m looking to retain.

In March 2020, I had this situation come up. Coronavirus is a black swan event. Nobody thinks it’s coming, everyone freaks out. Right after 9/11. If you’re still reading this and you’re alive from Pearl Harbor, congratulations to you. Right after Pearl Harbor, any of those moments is the wrong time to go in and ask. One of the things you’ve got to think about is current events like, “What’s going on in the world?” The stock market negatively reacts to uncertainty and positive reacts to certainty. Businesses are no different. People’s psyche is no different. If you aren’t sure if my company is doing well or not well, you are not qualified to ask for a raise.

In addition to that, if something major is going on in the world and something happens in your life that you must have a comp conversation, you better have had done all the work with your manager earlier. I’ll give an example. We’re having a crazy life now. Right after Coronavirus hits, I fired 25% of my staff. Six days later, a kid comes up to me and goes, “I want a raise,” not to his managers but directly to me. I’m like, “Were you not conscious when we had a conversation? We eradicated 25% of our staff. Were you not there for this?”

It’s not like you did it. You and I went through your talking points before you did that, you were thoughtful in how you explained it to your team, how you communicated it, you were emotional. You put a lot into communicating that. It wasn’t like one day they showed up, people were gone. You went through, “There’s a lot of uncertainty. I’m nervous. I want to survive. I want to come out of this stronger.” You’ve made it clear that, “I’m not sure if this is the last time I’m going to have to do this.” No one knows how bad this could get.

The other thing I did is right then and there I cut my salary to zero. I don’t pay myself a ton. I own a business. I don’t pay myself a minimum wage. I took my salary from a relatively sizable salary to zero. The HR company maybe take it to $3,000 a month so I could still get health insurance. I took myself low. I was the lowest paid person in the entire company and I said, “I want to preserve the business. I don’t want to preserve myself. I have a cushion. I’m worried about the other twenty-plus people.” Someone’s tone-deaf and is like, “I want a raise,” within a week of that. That is the wrong time to do it. That person within a month was gone by conversations. I convinced him that this wasn’t the right job.

LMSM 7 | Asking For A Raise

Asking For A Raise: We’re going through a COVID pandemic. If you work in the hospitality industry or the airline industry and asking for a raise, you have almost zero emotional intelligence.

 

It wasn’t that conversation. Someone who’s that tone-deaf was probably on your wrong side before they even came in to have that conversation. It wasn’t like by asking that you thought, “He’s got to go,” but it was another straw that he was laying on your back that you helped solidify that this guy doesn’t understand.

There were already enough arrows pointing in the direction of this guy who might be an idiot. That was the one where it was like, “I’m done fighting for you. It made no sense. It’s clear you’re tone-deaf.”

You’re a good communicator. Big companies are good at communicating how things are going for the company, but if your company’s not, let’s say you work for someone who’s old school, doesn’t share much, that doesn’t mean you can’t ask. You can ask some questions, “How are sales? How are we doing this quarter?” There are all kinds of signs you can find out but most managers are going to share that with you, “Are we up over last year at this time? Are we up over last month? Are we up over the last quarter?” Ask those questions, see how the company is doing. Usually, those staff are going to tell you a lot, “Are you adding or subtracting staff? Is the company tightening things up? Did the company take away the Christmas party? Did the company put restrictions on all travels?” Those are little hints that should tell you, “We’re trying to save money. Times are not as good as they were a year ago.” You can’t ask for more money during a tough period. It’s a question you need to know. It’s an obstacle you’re going to have to overcome.

You have a boss, we’ll leave his name out. He intimidated the shit out of me for years. I didn’t have a lot of exposure to him but when he would show up, I was always scared. He was a masterful communicator but he made it seem like he had a thick outer wall. In the 21st century, we would call it, he had an ‘F you wall.’ He had an ‘F you wall’ way before that was a popular term, but you still got raises with him and your career flourished. How did you handle it?

During the major housing recession of 2008 and 2009, he took care of me every year. You’re talking about Billy. I never asked him because he wasn’t the kind of guy that you did that with. What I did was I made sure that I performed better than everyone at my level. I wasn’t a headache for him. When he asked me to do things, I did them. I pushed back respectfully. I knew the things that irritated him that would hinder my compensation. I knew not to argue with him in a group ever in front of people. I knew if I wanted to get some change done, I would go talk to him outside of it. I knew the tripwires that set him off that set off his ‘F you’ wall. I didn’t mess around with him.

If you aren't sure if your company is doing well or not, you are not qualified to ask for a raise. Click To Tweet

We’re going to talk about something on the setup a little bit later. There are a few things I’ve done there with him that I think I set it up a little bit to give a little bit of anxiety that I wasn’t going to be loyal to the core and stay forever if I wasn’t paid enough. There are ways to do that. There are ways to bring that stuff up. With that individual, I never asked because I never needed to. I took care of my business and he was the kind of guy that rewarded someone. That’s how he rewarded you. He didn’t put his arm around you and say, “I’m proud of you. You’re doing great.” Money was never a problem with him if you were a performer.

What we should do is let’s move to number two.

The first question is, “Is my company thriving?” Number two, “Do I have a strong relationship with my manager?” That could easily be moved to number one the same. Why do we have that as our number two question?

Nobody gets where they’re going on their own. You always have to have support. It’s important to build those relationships. I’m dying to say this, you’ve got to be great at what you do, be the best, be reliable and be someone who doesn’t look selfishly at myself. I can’t remember asking for a raise. Many years in, something drastic happened and I got a ton of rewards. I’ve been promoted a bunch of times. This is something we’re going to talk about at length later. What’s your goal? Do you want to have this dialogue and put someone in a tough spot? If you have quickly earned the right to have a great relationship with a manager, they’ll go fight for you but you can’t do it every three months. You have to pick your spots. What I would think is way more valuable than having the raise conversation upfront. This is how relationships are built. You eat a little bit of shit, you do some of the stuff you don’t want to do. You make it so your manager thinks you are incredibly valuable, and this is where money starts to come in. You become irreplaceable. When you become irreplaceable, that boss knows that you are the number one person. You’re the number one draft pick. That’s how a relationship is formed and forged. If you can do that stuff, that builds all of the important things with, “Do I have a strong relationship with my manager?” because they know they can rely on you.

Understand what you’re doing here. There are only two types of people that you are going to be asking for a raise from. You’re going to be asking for a raise from the owner, Frank Cava who owns a company that has 25 employees. You’re asking Frank directly. What are you asking, Frank? You’re asking Frank if he will make less money for you, that’s what you’re asking for. You are saying, “I’m worth it and I would like you to make less money.” At the end of the day, that’s the same thing. You’re going to perform about the same, which is great if you’re asking but you’re asking Frank to make less money. He’s going to pay you more that comes right out of the profit center. Or you’re asking a manager who is worried about their own political capital in a company and understands that if they go pay you more, they probably have to ask a whole bunch of people and it’s going to take a few chips off the table. They’re going to get asked a lot of questions, “Why this person? Why are you supporting them? How good are they?” They have to do the mental calculus of, “If I pay this person more, now I’m the one that when did this unusual thing and everyone’s going to be watching to see if this person performs well.” That’s a fact.

LMSM 7 | Asking For A Raise

Asking For A Raise: A smart manager knows that someone who’s been with the company for a while that’s good at their job will be twice as productive as a new employee for their first year.

 

If they don’t, I’m going to get questioned about why I would have given more money to the person. The reason why “Do I have a strong relationship with my manager?” is important is because you’re asking that manager to put their own personal reputation on the line. They better trust you, they better like you and they better know without a shadow of a doubt that you are worth it because if they don’t, they’re not going to put their political capital up or they’re not going to make less money for you if you’ve not proven it. That question is incredibly important.

I thought of something while you were talking. You wrote a post on LinkedIn about negotiating when you start a job. Before you start a job, you’re nameless, nobody’s putting their capital on the line. It’s like do they want you or do they not? I would think you are better suited to negotiate your face off before you’re in the company. Don’t spend that capital on pithily raises. You want to spend that capital on promotions, on more responsibility and on, “Boss, rely on me. I won’t let you down.” When I left NVR, I was making almost seven figures, which is not an insignificant amount of money. My opening salary was $34,000. That took eleven years. Negotiating getting from $34,000 to $36,000 means very little when you can take that by twenty times up. To that end, be strategic. Before you’re there, negotiate a salary that if you got no raises and going to go work your rear end off, you can live on it and you can be quite pleased because you’ve got the right number then it gives you no burden to go and perform.

Especially in a big company, the amount of inertia that someone has to overcome to get you more than 3% in a big company is obnoxious. If you’re going to work for a big company, you have no idea how much grief your manager is getting to get you more than 3% to 3.5% on any given year. An incredible raise is 4% or 5% unless they’re promoting you or doing something else. To Frank’s point, it is much easier for a manager to give you $10,000 more in a starting offer than it is to give you $2,000 in the middle of the year. That sounds stupid but those are big companies right there. They’re not the smartest when it comes to it. A lot of times, they give too much power to someone in HR or someone who’s got the keys or they put too much weight on ranges or some of it is hubris. “We’re big. We got marketing. We have sales. We’re safe. We pay what we pay. We’ll find someone else.”

The bigger the company gets, the less anyone person hurts when they leave. That’s the way it is. The bigger your company gets, the less leverage that you have. Number three could go a little bit with number one, “Is my company hiring more people for my position?” That part is important because you could work for a company with thousands of people and you’re the only training manager in the company. If they’re not hiring more for that position, they’re not showing a need but in that same company, they might have hundreds of warehouse positions that they’re adding and they need good people that are doing that, that would give you more leverage.

You’re looking for, “How hard is it for my company to go find other people that do what I do?” If it’s hard, they don’t want to lose one. They don’t want to lose someone who’s good. A smart manager knows that someone who’s been with the company for a while that’s good at that job is going to be twice as productive as a new employee for their first year. That’s the way it is. Losing you is like losing two. They would have to go hire two to replace you and they can’t even find that person to go get it done now. When you’re talking about, “How much am I paid?” Everything is about leverage. You have more leverage with your company when they are hiring people than when they are flat or taking them away. Do you have anything to add to that one?

Nobody gets where they're going on their own. It’s important to build those relationships. Click To Tweet

I don’t think so. You touched on this in the last point, which I think is important. New people come in at a higher range than when you were hired. You also said something that solidified one of my points when you’re invaluable. Even if you’re the only trainer in a huge company, if the sales blow up, you became valuable. You’re doing a great job. Those two things negotiating on the frontend and being valuable in your job are themes that are going to be pervasive through this.

Which rolls us right into question four, which is, “Am I performing demonstrably better than my peers? Objectively, measurably better?” If there are 100 sales peers of mine and I am a sales rep and I want to get into a different tier of commission, a better one, can I go take that list and say, “I’m 7, I was 8 last year and a top 10 rep in this company.” If you can say that, your odds of getting more money go way up than if you say, “I’m 57,” because if you’re 57, I don’t give a shit if you leave. I can replace you. If you’re 77, I hope you leave. You did me a favor. Don’t ask me for more money. I’m looking to pay you less because you’re costing me money.

If you’re not performing, why the hell would your manager want to keep you first off? Two, why would they think it’s that difficult to go replace you? They don’t. It comes back to Frank’s point of, “Are you irreplaceable?” It is not hard to replace someone who’s 57 out of 100. You go interview for a while, you can go find an average person. You can’t go find an exceptional person with all the culture, with all the does everything right, that has a great rep and that delivers results. If you’re not irreplaceable, you can’t show that you’re performing demonstrably better, you’ve got no business asking for more money.

I think you said plenty here. I’m going to reiterate this. Don’t be obtuse. If you’re obtuse, you’re going to get pushed out of a company. Know what’s going on, which is what we’ve talked about to this point. In addition, you have to know, “Do I deserve to ask?” To Ian’s point of you must be demonstrably better, “Have I mastered my job?” That’s it. Rainer Altmann who was six rungs ahead of me when I started, pulled me aside after 12 to 18 months of being on the job. He goes, “Can I give you some advice?” I said, “Sure.” He goes, “Do you want to get promoted?” I said, “Yeah.” He goes, “Let me tell you how to get promoted. Forget about being promoted. Be irreplaceable in your job, then everyone will notice that you’re good at this better than anybody else, promotions, raises and all of that will follow. Go do the job.” He looked at me, nodded and walked away. I may have had 15 or 20 interactions with that guy in my whole life. That was many years ago. That’s good advice.

Rainer Altmann did fine in his career. He did well with living that life.

LMSM 7 | Asking For A Raise

Asking For A Raise: If you’re going to make two or three times what you’re making now, the pressure will be two or three times.

 

For people who don’t know who this person is, he was top five in NVR. He was high up. It is a good advice for a 23-year-old kid.

The thing is if you’re focused on getting promoted, what are you not focused on?

Doing the job.

If you are politicking, daydreaming about the next job you should be doing and people that do that tend to get bitter of, “Why am I not in it yet? Why have I not been promoted?” If all of those thoughts are running around in your head, you’re not focused on your job now. You’re not performing well. When someone brings your name up, they say, “Why would we promote that person? They’re not good at what they’re doing.” The argument is, “I would be much better at the next job.” If you can’t do the job of the person you’re going to lead, don’t tell me you’d be a better leader of people than a better doer. I don’t care if that’s your opinion, you better perform well because the other thing is, you’re not going to get those people’s respect if you’ve got to go lead them at some point anyway. We beat that one up quite a bit but if you’re not good at your job, you shouldn’t ask for more money. If you need to make more money, you should go somewhere else and convince them you’re better than you are because you can’t fool the company you’re in. They can see your numbers.

The fifth and the last question, and this one’s important to have your numbers, “Am I paid less than the market rate for my contributions?” Regardless of what your job is, if you’re a project manager, programmer or graphic design artist, it doesn’t matter, there’s a market rate. Someone is willing to pay for what you contribute, you should know that. Often what happens is people that want a raise, a company takes a chance on you and they hire you without much of a background, entry-level. You’re paid on the low-end of the scale. That’s a risky decision. If you’re bringing someone in who’s never sold before and you’re bringing them in as a salesperson, they’re not going to pay you much because they don’t know if you can sell yet. You’re an unknown.

After six months, you prove to be one of the best salespeople in the company. Now you’re significantly underpaid and you have experience. A lot of times this happens in a company. You go from inexperienced and worthless to valuable in a year because you’re surrounded by good people that taught you, that showed you the ropes. You have a good manager, they coached you up. This can happen on a regular basis where there’s a big disparity in what you’re being paid and what a competitor would pay for you.

Become irreplaceable in your job so your manager thinks you are incredibly valuable; this is where money starts to come in. Click To Tweet

When you started on day one, the competitor would pay the same that your company would because you had no experience. Now that you can put a year on your resume with that company doing good things, that changes things, that changes everything about what a competitor would pay. You have to pay attention. This happens especially when you’re young or you’re new to an industry, “Have I exceeded the market through the experience that I’ve had in this company?” If you have, have that data ready to go. If you’re paid more than the market, you better be giving more value than the average person that’s out there if you’re still planning to go in and ask for an increase.

I’m going to talk about a scenario. This happens a lot especially at corporate. You get an old salty dog that’s in a job for twenty years and they’re getting 3% a year, but the market doesn’t appreciate 3% a year. It could go $5,000, $10,000 or sometimes $10,000 on a base salary. It could change quickly. Most of the readers are not old salty dogs in a job, but we’ve talked in another show about how important it is to be a good manager and to build loyalty with your staff. If there’s a disparity that you see with one of those leaders in your staff and you know you’re hiring someone right out of college who makes way less. I saw this at NVR a lot. We would pay a new hire $50,000 to $55,000, and we’re paying someone else a base salary of $45,000 who had been in the job for twenty years. That is, as a manager, when you want to go fight because that person is invaluable and they’re underpaid.

Most of the people are loyal. They’re not going to come up and talk about that. That’s the endpoint. If you’re in a job for a long time, the water is boiling and you aren’t getting those raises. That’s when strategy comes into place. That’s where you are long-term in a role, it then makes sense every 5 or 10 years to have the comp conversation about, “I’m underpaid for my performance. I’m valuable to the team.” If you’ve got a great manager, they’re going to do that for you. You might have a great manager for a period of time. If they’re a great manager, they’re most likely to get promoted to something else and you’re still going to be in that role, but that’s the time where these conversations are relevant. You do need to educate yourself a little bit.

Selfish and self-assured are closely related. In the comp conversation, one of the most important things is not to be delusional but to have self-esteem. Let’s talk about the difference between a salesperson and a non-salesperson. I own a small business. I love it when a salesperson looks at the percentages as I’m hiring them and says, “Can we talk about the upper tier? What if instead of 6%, I could get 8%?” That’s self-confidence. Those numbers that if you negotiate that stuff, I’m more willing to say, “If you get over this threshold which is a big threshold for us, I’d be willing to pay you a little bit more.” That’s the kind of stuff that you can do. Like Ian said, “I know I’m going to go into the job. I’m going to dominate. I’m going to take care of my business.” Having the self-confidence of, “Once I do hit this threshold, I want to get even more of the upside,” it’s like sports contracts. Don’t do it like the Ricky Williams where you make it ridiculously impossible to hit the terms, but set it where the terms make sense, that you can get them and it’s exciting for you. That’s the stuff where you can reward yourself and you can do a lot of that quietly and you can do it in a way that is proactive.

After you’ve asked these questions, you need to ask yourself what your end goal is. You gave a great example. There are a ton of people like that in organizations. They’ve been there eight years and they’re making $60,000. We hired a kid out of college for $54,000. Who’s training them is this person who can run circles around them in the job and could do three times the volume and they make about $4,000 more. You could see that and get bitter and get upset, or you can be rational and say, “It’s time I go talk to my manager and ask for something.” If you’ve got a decent manager all day long, if they weren’t paying attention, which they should have, they’re going to go make that right. That’s one scenario.

LMSM 7 | Asking For A Raise

Asking For A Raise: People who get rewarded with the most money are those who are cognizant of what’s going on, good at what they do, know their market value, and willing to accept a little bit less for longevity.

 

For me, I can’t recall a time in twenty years where I asked for more salary ever. I don’t ever remember doing that. For me, it was multiples. I wanted to know how quickly can I start making multiples of what I’m making. I’ll tell a story. It’s my second full year at GE and I was at the annual sales meeting. I got this big award. It was the Five E’s Award. GE had their five E’s. It was like the top sales guy. The guy that had all the culture, exhibits everything, gets results. I wasn’t the number 1 salesman out of 100 salesmen, but I got this award that was like a little Heisman Trophy Award they gave me at this meeting.

I went up, accepted, took a picture with the VPs, came back. McCauley and a few of the other sales guys were all sitting at the table and we’d been drinking beers. It’s an annual meeting. They’re like, “That’s incredible.” These guys are all older than me. They’re like, “They must be paying you a couple of hundred grand a year to be that good.” I’m like, “I’m not making that.” They’re like, “What do you make?” At that time, it was $60,000 to $65,000. I was two years out of college. My first job was $50,000 then I got a 10% raise to $55,000 and then I got a sales rep job, so it was like $60,000. These guys were all making $150,000 to $175,000, plus commissions. I was making 1/3. They were crying laughing. They’re howling at me.

It got me mad at that time. I thought about it and I went to my boss and I was like, “I think I’m underpaid.” He’s like, “Don’t listen to any of those guys. They’ve been sales reps their whole lives. They’re going to be sales reps the rest of their lives. Let me show you what I make. What you care about is options, equity and the next job. How long do you want to be a commission sales rep at GE?” I was like, “I hadn’t thought about it.” He’s like, “That’s why you’re different. You’re doing a good job. I want you to be a manager in a year and here’s why that matters.”

From that moment on, I never talked to anyone at GE or NVR about anything except equity. I asked multiple times for more options. I negotiated more options at NVR before I got there. I negotiated more all the time. I always made it clear I want to be a part of the next option pool because I knew that would give me multiples of income. I always wanted to make sure I was doing what I needed to do to be looked at as someone that should have more responsibility. When you have more responsibility and organization, it will pay you more. That’s a fact.

You and I didn’t know each other during this stretch of our careers. We never gave one shit about incremental. We cared about exponential. What we did is we sat tight, we built our reputations and skillset, worked hard, we were often promoted into shit jobs and I said, “I got you, boss. I’ll do it. I’ll fix this community. I’ll drive an extra hour. I’ll do this stuff because I want to prove to myself that I can do it. I know if you’re asking me to do it, you need me to do it.” You do that kind of stuff. You do it with a smile and you do it well and you do it ahead of schedule, then raises don’t come in percentages. They come in exponentials. That’s how it happens. That’s how you go from $65,000 base to $150,000 base or $300,000 base. Those are big jumps and those are things that can change the arc of your life.

Regardless of what your job is, someone is willing to pay for what you contribute. Click To Tweet

You’ve got to know what your end goal is. With all of that, going from multiples and exponentials, I left Chicago, moved to DC where I knew nobody. I left the safe job to make multiples of what I was making. If you’re going to do that, you’re going to sacrifice a lot and the pressure is going to be way ratcheted up. You have to want the pressure. If you’re going to go make 2 or 3 times of what you’re making now, the pressure is going to be 2 or 3 times. That’s the way it is. I don’t expect much of a $40,000 employee. I don’t pay you enough to expect the world of you to fix a company. If I’m paying you $400,000, I expect a hell of a lot out of you both from the time you put into the job, to the results that you get to production.

If you want those things, you’ve got to know it. There are a lot of readers and they’re like, “I don’t want any of that. I want to be good at what I’m doing and I am. I’m sure I’m paid less than everyone else.” If your goal is to make 15%, 20% or 25%, that’s fine. That’s a good goal. Everyone doesn’t have the same ambitions. If that’s the case, then you should address it and you should address it tactfully. If your goal is to keep doing the same job, you should make as much money as humanly possible doing that job. That’s the way I look at it. If you’re a tenant manager for Cava Companies and that’s a job that other real estate companies have, they all have these. If that’s what you want to do for the next 25 years of your life and nothing else, you don’t want more than that. You love that job, that’s what you want to do. Your goal should be the highest-paid tenant manager in the industry. If you love sales, you love programming or you love being a project manager, that’s great, then you should try to be the highest-paid at that. Those are two different goals to what Frank was doing, which was grinding, building his brand, looking for more responsibility or, “I figured this out. This is what I love to do. I’m passionate about it. I’m great at it. I want to keep getting better and I want to make as much as I possibly can.” Those are two different goals.

Sometimes you’ve got to be careful. Making as much as you possibly can, can be a disservice to yourself. If you’re in the 92nd percentile for the job but you’ve got stability, that might mean something too. People who get rewarded with the most money are people who are cognizant of what’s going on. People who are good at what they do and people who know what their market value is and are potentially willing to accept a little bit less for longevity. People who constantly jump, it doesn’t work well long-term. If you’re a free agent and you’re 1099, that works. If you work at a company, you’ve got to be cognizant of that because jumping around a lot is not necessarily the best solution either.

If you like your company’s culture, try to make as much money as you can in that company. Don’t threaten to leave, don’t run and leave right away. Have these conversations with your manager, figure out how you can go get that money and stay in the culture that you enjoy with that manager whose relationship you value. All of those things are worth a ton. Frank and I were not job jumpers. I worked for two places in twenty years. Frank worked for one in thirteen years. I wasn’t a jumper. I did everything I could to make sure I made as much as I could within a culture that I like and enjoy.

It’s a good time to wrap this. Why don’t you give an overview?

LMSM 7 | Asking For A Raise

Asking For A Raise: If you like your company’s culture, try to make as much money as you can in that company. Don’t run or threaten to leave right away.

 

We’ve got to help with the approach and the setup a little bit. How do you even have this conversation? If you’re going to do it, there are two things. One, it’s a myth to think that you’re going to walk into your manager and ask for money and walk out ten minutes later. It doesn’t work that way. You want to have a bit of a setup, and a setup is if you’ve answered yes to all the questions we’ve already talked about, the setup of the manager is to leave a seed of doubt that you are there for the long haul. This doesn’t have to be in a negative way. This has to be in a way that lets them know that you want more, that maybe this isn’t something you’re going to have forever if you’re not paid as much.

There are ways that you can drop it without putting it right into the conversation. I did this three years before I left NVR. I went to my boss and I said, “Here are three things that I’ve invested outside of NVR. I’m turning 40.” I had a heartfelt conversation with them and I wasn’t bullshitting. I honestly was thinking of leaving and I was turning 40 and it was messing with my head like, “Why am I still here? Why am I still going to start meetings? Why am I still talking about mis-settlements? There a lot of stuff I don’t care about. Here are three things that I’ve invested in that I could go spent more time on right now.” I walked them through all of it and walked them through code guard. I talked about things that I could do with my father-in-law.

Two weeks later, I had a massive promotion, massive raise, more equity, more money. I didn’t ask for it. I was having an honest conversation with my manager that I was thinking of other things that I could be doing in my life. I had that relationship where I could bring that to them. I was performing, I was doing the job of four people. I knew by bringing that up, something good was going to happen to me. I couldn’t have played that, I couldn’t do that every six months. If I’d have done that again six months later, at some point you’re going to wear out all that goodwill that I had stacked that big chip pile.

You have to set it up a little bit with your manager that, “I don’t know what’s going on with me in my career here. I’m getting a little antsy. I want to tell you because I trust you and I like you a lot that I’ve been thinking of other things to do in my career.” That is not going to ever get someone mad, “I need your advice. You’re someone I respect. I look up to you. You’ve been doing this for a long time. I’m not sleeping at night because I’m seeing you during the day and you’re such a good boss. I know that I’m thinking of doing other things than working here. I feel guilty not sharing that with you.” There were few bosses that would take that wrong that I know of.

Ian and I were fishing the Detroit River together. You’ve got to know when to set the hook. Ian is talking as an executive-level person who did everything we’ve talked about. He earned the right to have that level of conversation. If you’re lower down the rung in your career like we both have been, the approach works, “What’s my future look like? What do you see?” Those should be regular conversations. Annually, maybe every 6 to 24 months is the right time depending on where you are in your career. If you prove yourself to be a doer and a reliable person and you have even a decent manager, they’re going to have these conversations with you on a regular basis.

In the comp conversation, one of the most important things is not to be delusional but to have self-esteem. Click To Tweet

You have to be honest but then you have to pick the right spots. Do not do that in front of 40 people. Do that behind closed doors. I’ve had people on a team call ask about comp, wrong time. Ask about that behind closed doors. You’ve got to pick the right time, pick the right moment and do the stuff that we talked about, but that’s it. If you’ve done the right stuff, you have the right relationship with the manager, this is what happens, it’s conversational. If you’ve done the wrong stuff, it can be acrimonious.

You’ve set it up. Now if someone comes to you and says, “Frank, I love this company. I love working for you. I feel like I need to talk to you about money. I feel like my personal goals, I would like to make X. I would like to have a conversation with you of what kind of value I would have to add to this company. What more I could do for this company to put myself in a position to make that? You give me everything I want in a career, except right now I’m not reaching my financial goals.” Would that offend you if they brought it up that way?

No, especially with what you said, which is smart. Being myopic never leads you to arrays, being altruistic, “What can I do for the company to add more value? If I add more value, will that then compensate me? I need to make more money.” Go get a part-time job, “I want to do what I can to make this place a better place and a more profitable place.” I’m into that conversation all the time, anytime and open arms.

On a regular basis, you give people more responsibility. You give them more to do, you give them a little bit more to rope in, see how they do. You’re quick to go pay someone more if they’re delivering results. You know they’ll make Cava Companies more money. You’ll get a return on it. That negotiation is happening, “If you want more money, tell me how the return gets better. Tell me my return on that investment and let’s have that discussion, and then you better live up to it. You better live up to what you’re telling me is going to be better.”

That negotiation is going on every single day at work. You’re either winning the negotiation or you aren’t in the way as an employee. Your winning or losing is based upon your performance. If you’re performing, you’re giving yourself all the chips that you could possibly need for the raise or the promotion discussion. If you are not performing, you’re not. It’s that simple.

LMSM 7 | Asking For A Raise

Asking For A Raise: Your winning or losing is based upon your performance. If you’re performing, you’re giving yourself all the chips you need for the raise discussion. If you are not performing, you’re not.

 

As a manager, would you rather someone come have that discussion with you than tell you someone made me an offer? If someone is going to come in and talk to you about money, wouldn’t you rather they give you a heads up that’s on their mind? You’re not a mind reader. What the hell do you know what they’re thinking?

Having a dialogue and having a relationship with your employer is imperative.

I think we’ve said a few things not to do but I think one that I want to leave with before we wrap all this up, you’ll read this if you google, “How to go get a raise?” The last thing you need to go do is before you’ve had any discussion with your manager, go interview with another company, get an offer and then go shove that offer in your manager’s face. If you have leverage, they might match it but you burned all the goodwill you had. You are now not trusted. They paid you to keep you for a while as a freelancer to get some work done. You’re not going to be thought of for anything bigger down the road. You’re not going to be trusted. That’s the last thing you need to do if you want to do this the right way.

If you went and you had all these discussions with your manager, you feel like, “This place is never going to pay me more,” if you need to make more money, then maybe it’s time to leave. The way to get a raise is not to go shove another offer in the face. That would be like telling your wife, “We need to spice up the relationship and here’s how I did it. I went out to bars a couple of months ago and hooked up with a few girls and now it’s spiced up.” No, you go and say, “Let’s spice it up.” You don’t go rub something in someone’s face. You’ve got to give them a chance to earn it.

You might be able to get away with 1 or 2 of these things once, but you can’t have a pattern of it. It’s that simple. Everyone is human. Everybody wants to be respected, you included with what you’re being paid. It’s critical to pick the right steps, but you can’t constantly flaunt that stuff in someone’s face or threatened because it’s going to fall apart.

Ask those five questions before you even start. Understand that there’s a big difference between working in a small company and a big company, and the owner is going to make more decisions differently than a manager who has all of the restrictions, who has all of the political stuff to worry about. Who’s more worried about what others think about them than worried about keeping people or saving people. You have to think about those things and in different sized companies. You have to know your goals. Do you want to make 10% more? Do you want to make three times more than what you’re making? The way you behave is two different things. You have to forego the 5% and 10% sometimes to make three times what you’re making.

You have to not be seen as someone who is all about every nickel. You have to be seen as someone who’s all about the company being better if you want to make multiples. In the conversation, set it up, be honest and make it about the company, make it about, “How do I deliver more for this company so that I can reach my financial goals?” Don’t be afraid to tell your manager if you have that relationship, “I’m not meeting my financial goals.” It’s okay to not be terribly happy. I never once gushed ever. Every year at NVR, I would get a better raise than most, 4% or 5%. My manager would always say, “That was the best raise that we gave anyone.” I would be like, “Thanks.” I never gushed. I wanted you to think like, “Is he upset with that? Is he frustrated? Was that not enough?” That’s including what not to do, remember that your manager has an ego and you better play to it if you want this to work, it’s not all about you. They’re not going to make these decisions 100% rationally. You have to understand that they’re humans, just like in any negotiation, they will make this personally and their ego will be involved, so you have to play to it. There’s no way around it.

The summary was great. I don’t think we need to delve into it further. You’ve got to know that you earned it, play your cards, you’re in a lifelong poker match and you’ve got to play these cards the right way.

It’s good to see you.

It’s always a pleasure, Ian.

Good luck going and making some more money yourself now.

We’ll talk soon.