What Is a Salary Increment and How to Negotiate for One

By Indeed Editorial Team

Updated 15 November 2022

Published 13 December 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you want a raise in your pay, you may consider speaking with your boss about it. Salary increments are percentages of your entire base pay that your employer can add to your compensation as a result of professional development and progress. Understanding how to negotiate a pay rise may be beneficial if you decide to pursue a raise in your pay. In this article, we answer the question, 'What is a salary increment?', explore the reasons why employers give out pay raises and outline the steps to negotiate for one with your boss.

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What is a salary increment?

The answer to the question 'What is a salary increment? is that it's a component of an employee's annual income that varies from a bonus. Employers can combine a salary increase with your yearly base pay in a single cheque. For instance, if an employee who earns $60,000 a year receives a 2% raise, the company may choose to pay the raise all at once by adding $1,200 to the person's salary in the first pay period of the year.

It may also be helpful to look at wage increases as percentages to better comprehend how they affect your income. A cost-of-living increase or a pay increase to account for inflation is an example of a wage augmentation that employers frequently present as a percentage. Employers may give out these sorts of wage increases in each payment throughout the year. For instance, if you get a 2% cost-of-living raise or $1,200 every year and receive your pay twice a month, you get an extra $50 each month.

Related: Salary Guide for Singapore

Salary vs hourly wages

Organisations might pay their staff either on a yearly basis or on an hourly basis. The computations for a salary and an hourly wage differ for every paycheck. Though some organisations enable you to pick whether you want to receive hourly wages or a salary, management may make that decision for you depending on your work obligations. Hourly employees may work longer hours and earn overtime compensation. Paid time off may be available to salaried employees.

Salaried employees get the same pay every month. Note that their salary may not directly represent the number of hours worked within that time period. For instance, a salaried employee who works 80 hours in one pay period and 50 hours in the next receives the same income for both periods. Hourly employees receive their wages according to the number of hours worked within a pay period. For instance, an hourly employee who works 90 hours in one pay period and 70 hours in another would earn more money in the first scenario because they worked more hours.

Related: Time-Based Salary vs. Output-Based Salary (With Benefits)

Reasons for a salary increment

While there's no set legal standard for an employer to provide pay increments, it remains a common expectation among employees that they would receive periodic increases to keep up with market rates and afford living cost adjustments. Employers give out salary increases for various reasons and clearly comprehending them might assist you in your negotiating process with your employer. Discussed below are some common factors underlying a salary increment:

Possessing a positive attitude and a strong work ethic

A strong work ethic and a pleasant attitude may impress your boss or supervisor. Recognising your devotion to the job, they may consider you for a salary increase. A good attitude may have an impact on the quality of your job and the effect you have on your co-workers. It demonstrates to your boss that you're enthusiastic about your job and a valuable part of the team. Managers may be more willing to provide a salary raise to a hardworking and committed employee who remained professional throughout the employment or the course of a project.

Related: How To Demonstrate a Strong Work Ethic to Your Employer

Inspiring and motivating your colleagues

Employees with strong leadership qualities and the ability for improving team morale may be more likely to obtain a pay raise. These abilities can demonstrate your ability to manage more duties, which may qualify you for a wage boost. These broad personality qualities vary from isolated honours such as awards and professional accomplishments in that they're something you can demonstrate to your management and team daily.

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Continuously taking initiatives

Employers may have varied criteria for determining whether an employee is deserving of a wage increase, so you may want to be proactive and analyse your personal experiences with the firm and professional connections with clients and colleagues. Outlined below are some things to think about:

  • Evaluate the situation: Receiving a wage increase may be contingent on factors outside your control or unrelated to your job, such as the economy or the company's overall success for the year. Consider initiating a conversation or negotiation when you believe it's going to be the most fruitful.

  • Assess other people's perceptions: Consider how other workers, other than your boss, would perceive you and your work. Your direct supervisors and managers may not be the only ones deciding on your wage rise, so having other team members or employees advocate for you may boost your chances of getting one.

  • Be confident and bold: Taking on additional responsibilities or duties proactively can demonstrate your commitment to bringing value to the firm and assisting your employer in increasing profits. This might impress your boss and persuade them that you're deserving of a pay raise or recognition.

Related: 8 Performance Review Questions (Plus Sample Answers)

How to negotiate for a salary increment

You can negotiate for a pay increase using a wide range of communication channels. Irrespective of your specific approach, you may consider the following steps when thinking about how to secure a pay increment:

1. Gather materials to strengthen your request

It may help you to prepare a list of materials that support your request and demonstrate why you deserve a raise before negotiating with your manager or supervisor for a wage increase. Consider compiling a list of important professional milestones or successes to give to your boss and any activities you've undertaken that might boost the company's efficiency or profit. You may also include any honours or certificates that you've received from the organisation or any professional organisations related to your profession.

Related: How to Negotiate a Salary (With Examples)

2. Conduct research on market pay rates

Research average pay rates for professionals in a similar job position as yours or working in a related sector before negotiating a wage increase. Depending on your current salary, you may use numerous salary or incremental pay calculators to estimate a suitable wage rise. The amount of pay rate and yearly compensation increments might also differ depending on an employee's experience, education and other qualifications.

Related: What Is Compensation: Types and Examples of Benefits

3. Set a target for your salary increase

You can derive a target salary increase based on your years of experience, professional accomplishments and research into average pay rates. It may be advantageous to approach the discussion with this aim in mind and provide the percentage to your boss. Consider examining the company's aims and determining how you might continue to meet your employer's business objectives in exchange for a wage raise. You can offer this information to your supervisor together with your desired wage increase to demonstrate why you're an important addition to the firm and team.

Related: Your Guide To What Is A Good Salary in Singapore (Plus Tips)

4. Practise your pitch

Consider practising what you're going to say before presenting this concept to your supervisor, whether in person or in writing. Consider making an outline of everything you intend to cover before your negotiation. To persuade your employer, emphasise the aspects that make you desirable and useful to the firm.

You can practise by speaking out loud to yourself or by creating a draft of the letter. Consider practising with a friend or submitting your work to them for feedback. This can assist you in determining your tone and ensuring that you've included all of your professional experience and accomplishments to show why you're asking for a wage increase.

Related: How to Negotiate Salary in an Email (With Samples)

5. Decide to inform your supervisor

You may call your supervisor to organise a meeting or send them the letter through email once you've prepared your materials, done your research and rehearsed or written what you're going to say. The timing of the negotiation might work in your favour. A good time to negotiate a wage increase is after you've provided value to the firm via your own professional progress. This might be after you've acquired further professional or educational training, increased leadership duties to your work or won a business award.

Read More: How To Ask For an Increase in Salary (Steps and Example)

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