Six Types of Pay Raises You Can Receive
To be successful in getting a raise or promotion, you must know when the time is right, and you must ask and negotiate properly. Employers give pay raises for a number of common reasons:
- Completion—Employers often have a probation period during which you are expected to receive training, learn your job and demonstrate that you can do it. If all goes well and the employer plans to keep you, a raise may be given at the end of this period. Find out whether your employer has such a probation period, how long it is and if there is a standard raise is upon completion.
- Incentive—Organizations usually base raises on your quality of work during a certain period of time—for example, six months or a year. Typically, you will find out how well you are performing through a performance review with your supervisor. The raise is then based on how well your review goes.
- Cost-of-living increase—Organizations sometimes give raises to help offset inflation. Inflation is a process in our economy that raises prices on items like rent, food and gasoline, so a dollar buys less. Thus, employers often raise wages and salaries to compensate and employees can maintain their buying power. This is usually called a cost-of-living adjustment.
- Incentive to keep good employees—If an employer is afraid that a good employee might leave to accept a better offer, they will often give a raise. If you do receive a job offer for which you will be paid more, explain the situation to your employer. He or she may match your new salary offer, or even offer more money to keep you.
- Reward for special efforts—Some employers give raises if the employee has done a special task above and beyond the regular job description, such as a special project, filling in for other workers, training a new worker or coming up with good ideas on how to perform the job better. Some employers will reward you with a raise for learning new skills or for completing a course of training.
- New responsibilities or promotions—Raises are normally given if the employee receives a promotion (higher responsibility and a new job title), and sometimes even if the employee takes on more responsibility within the current job description.
Keep these types of raises in mind when you’re considering asking for an increase. Be prepared to discuss your reasons for requesting a raise, as well as examples of your performance to date. You’ll need to be able to articulate the type of raise you’re asking for and why you think you’ve earned it.