The Promotion That Comes Without the Pay Raise

The Promotion That Comes Without the Pay Raise

The FINANCIAL -- More workers are facing the same dilemma: How do you respond when your boss offers you a nice new title, without a nice new raise to match?

Some 39% of employers often hand out promotions without a pay raise, up from 22% in 2011, according to a recent survey of 300 employers by the staffing firm OfficeTeam. Many employees are left wondering whether to swallow their resentment and accept the news, or push back for more money.

A smart response requires taking stock of pay practices at your company, figuring out what’s in it for you and making a well-informed decision.

Some pay decisions call for pushback, including those driven by racial, gender, ethnic or religious bias.

But sometimes, no-raise promotions make sense. Alexander Lowry was startled when he received a congratulatory letter on a previous job at a Wall Street firm saying he was being promoted to deputy COO from vice president. Period.

There are other reasons employers give promotions without raises. Some only raise pay once a year. Others restrict groups of job titles to specific pay ranges, barring additional increases for people who are already at the top of the range.

Other employers are doling out small changes in job titles, or micro-promotions, to satisfy millennial workers’ craving for feedback, says Carolyn Betts Fleming, founder and CEO of Betts Recruiting in San Francisco. A recruiting associate might be named a recruiter, for example. While Ms. Betts Fleming says she doesn’t believe in promoting people without a raise, “getting a title increase is something to be proud of” for some young workers, she says.

A new title may confer other perks, such as a larger bonus, more vacation, tuition reimbursement or stock options, says Roy Cohen, a New York-based career coach.

If you’re startled or dismayed by an offer of a no-raise promotion, don’t react defensively. “Express genuine interest in the boss’s thinking,” says Amy C. Edmondson, a professor of leadership and management at Harvard Business School. That means asking neutral, curious questions about his or her reasoning. If your boss comes across as intimidating and closed-minded, “screw up your courage and ask anyway,” says Dr. Edmondson, author of “The Fearless Organization,” a forthcoming book on psychological safety in the workplace.

Request a little time to think about the offer. Discreetly ask current or past co-workers about what others at that level are paid.

If you decide to accept but want to keep your hopes of a raise alive, ask when you might be eligible and what you’ll have to accomplish to qualify, says Ms. Kiner, CEO of uniquelyHR, a Seattle consulting firm.

Ask to revisit the topic in a few months, and consider getting the boss’s commitment in writing, says Helene Lollis, CEO of Pathbuilders, an Atlanta human-resources consulting firm. One female executive she advised received a big promotion to head a major project, without a raise to match. The executive led the project so well that she was soon hiring staffers making more money than she was, Ms. Lollis says.

Frustrated, she devised an upbeat way to reopen the topic by saying, “Isn’t it fantastic that this project has gone so well that we need this high level of talent? Now we just need to get my pay in line with the talent needed to do it,” Ms. Lollis says. She got the raise.

Some pay decisions are simply unfair.

When Shawn Rhodes, a Tampa, Fla., speaker and owner of Shoshin Consulting, a change-management firm, was asked to step into a former boss’s job while he was away for several months, he made the mistake of saying yes. “I wore myself out doing two jobs with no pay raise, no extra privileges, not even a nice letter in my permanent record,” he says.

When pressured later to do it again, he says, he told his supervisor, “not without a pay raise,” and resigned.

Saying no can damage your reputation internally. But some jobs are a setup for failure, says Mr. Cohen, author of “The Wall Street Professional’s Survival Guide.