This post may contain affiliate links, which means I’ll receive a commission if you purchase through my links, at no extra cost to you. Please read full disclosure for more information.
Good performance review but no raise is a puzzling yet common situation for young professionals. After all, you’ve been busting your butt and doing everything right — going above and beyond, putting in extra hours, and taking on new challenges.
I wholeheartedly agree with you that hard work deserves fair compensation. However, salary raises are really up to the company’s discretion which means you can do all the right things and not get it.
The good news is that there are plenty of strategies to generate a positive outcome from a good performance but no raise situation. In this blog, I’ll look at five of them. But first, let’s demystify a common myth.
Do You Always Get a Raise During a Performance Review?
No! Performance reviews are a fact of life but don’t guarantee a raise each time.
Many factors are at play.
For example, your chances of getting a raise often depend on how well you perform. If your performance has not been up to par or wasn’t what the company expected, chances are you shouldn’t expect that bump.
In addition, raises depend on the company’s financial health. If the company’s budget is low, or if it hasn’t been doing well lately, you may not be able to get a raise, even with a glowing performance review.
Regardless, it helps to know how your job performance fits into the big picture of your firm’s financials.
Read on to learn the potential reasons and how to reverse the situation in your favor when you receive a good performance review but no raise.
Possible Reasons Why You Didn’t Receive a Raise During Your Performance Review
We can attribute a good performance review but no raise situation to:
- You didn’t ask
- You went off track with the role’s priorities
- You underestimate collaboration
- Your performance is only OK
- The company can’t afford a raise
- Your manager has little to no say over pay raises
You didn’t ask
A performance review is a two-way conversation that allows both sides to speak openly about their expectations and concerns. If you didn’t ask for a raise during the appraisal, it could be months before another opportunity emerges.
You went off track with the job’s key priorities
Your job isn’t just about hitting deadlines and doing excellent work. It’s more importantly about delivering stellar results in areas that matter most to your employer.
When you invest too much energy in aspects outside the core priorities, that’s enough reason for your employer to deny you a raise. That can be especially true when you take on additional responsibilities or projects outside your job description.
You aren’t a team player
It’s not enough to think about yourself; you must also care about the company itself and its employees.
Bosses like workers who demonstrate leadership skills and take the initiative to help out and mentor others when needed. It’s not surprising when employees who don’t collaborate with other team members get passed over for raises and promotions.
Your performance is only OK
The bar for receiving a raise is quite high in most firms, and few employees reach or exceed it. You can only expect a raise if you deliver well above average results. That could mean taking on additional responsibilities or projects or finding ways to increase productivity at work.
By outperforming, you’re setting yourself up for a merit raise.
Your company can’t afford it
Another reason for a good performance review but no raise is that the organization can’t afford it.
If your company is in an unstable financial situation or amid layoffs or restructuring, the management has to make tough choices about what it can do with the available resources. That could mean withholding salary raises.
Your manager isn’t authorized to give raises
Acknowledge that many managers don’t have the authority to grant raises. In fact, 44% of organizations have a professional or team dedicated to compensation, according to Payscale’s 2022 Compensation Best Practices Report.
The chances are good that your manager will have to approach the head of human resources, make a case for you, and possibly obtain approval from other seniors.
5 Things to Do When You Have a Good Performance Review But Don’t Get a Raise
It’s natural to feel vulnerable, nervous, and confused about approaching your boss about a raise after a performance review. And when it’s tempting to abandon the conversation altogether, does it surprise you that only 37% of employees request a raise? Perhaps no.
But remember, it’s hard to receive without asking. You must be proactive but smart about your approach.
Here’s how to go about a good performance review but no raise situation:
- Reflect on possible reasons why
- Plan to ask your boss why
- Build a case for why you deserve more money
- Practice your pitch before meeting your boss
- Explore other employment opportunities if you aren’t valued
1. Reflect on possible reasons why
Normally, you should have a good idea of what your company expects of an employee in your role at the company — and which benchmarks they use to determine raises — so it shouldn’t come as a complete shock when your pay doesn’t go up.
If you got an enthusiastic “Good job!” but no money, it’s time to ask yourself: What’s happening here? Why am I not getting paid more?
It could be something simple, like an upcoming budget cut, or something complex, like a micromanaging boss who doesn’t want to share the spotlight. Maybe your company has been struggling financially, or they want you to prove yourself in another area before doling out raises. Of course, there are plenty of instances when it’s indeed about your performance and little else.
The best way to move forward is by collecting more information about the situation and assessing what might be causing this now-predictable outcome.
2. Plan to ask your boss why
You’re entitled to know why you didn’t receive what you were hoping for.
Unfortunately, most people cannot read minds, so you should schedule a meeting with your manager to discuss the raise.
If you don’t ask for it, no one else will ask for it on your behalf. And the longer it takes for you to initiate this conversation, the more likely it is that your manager will forget the performance review specifics.
Schedule the meeting when your boss is more likely to be in the right mood and less overwhelmed. That includes staying clear of their office on a Monday morning or Friday afternoon.
3. Create a case on why you deserve a raise
You don’t want to assume anything when asking for a raise during a performance review. Take an approach that conveys your interest in the company in a way that will seem flattering.— but also feel like you deserve a raise based on your performance.
Build a case based on the reasons for the raise denial. Suppose your boss felt that your work was not up to par with those who received raises. To address this issue, ask the supervisor to walk through your performance in detail and point out areas where you have performed well and areas where you can improve.
If you didn’t get a raise because of budgetary reasons or timing, it might be wise to negotiate something else, such as additional vacation days or flex time. If these are not possible, think about other creative ways to demonstrate appreciation, such as public recognition or extra training opportunities.
Go ahead and gather additional supporting evidence—facts and data to demonstrate why you deserve a raise. This should include specific examples of how your work directly and positively contributed to growth at your company. Examples:
- Increasing revenue growth in some way
- Increasing employee engagement scores by X percent within a specific department.
4. Practice your pitch before meeting with your boss
Negotiating compensation is more like playing chess. That means thinking several moves ahead, anticipating your opponent’s movements, and being ready for anything.
Practicing your pitch allows you to smooth out any kinks in your presentation and increase the chances of a positive outcome. And more importantly, it’ll establish a sense of confidence in yourself before the big meeting.
You can rehearse in front of a mirror or ask a friend, colleague, or family member to role-play with you. At the very least, write down what you want to say and read it aloud multiple times.
How you deliver the pitch is equally critical. Practice speaking clearly and confidently while maintaining eye contact.
- Practice how you will open the dialogue with your boss
While seeking answers to a good performance review but no raise, learn how you will open the conversation with your boss in an assertive but not aggressive way.
You might start by saying:
“I’m thrilled about my performance review and the positive feedback and am eager to discuss my career trajectory at the company.”
This way, your boss knows that while they are there to talk about your performance review, they should also expect a request for a promotion or salary increase.
- Practice how you will respond to your boss’ responses
A hiring manager’s knee-jerk reaction will likely be to push back on a salary increase request. It, therefore, helps to prepare some counterarguments.
Ideally, you’ll find a way to keep them engaged in the conversation and explore other options available to you instead of just accepting ‘no.’
For example, if the company’s budget is tight, ask about flexible work arrangements, telecommuting benefits, or new responsibilities with additional compensation such as bonuses or commission payments.
5. Look for other employment options if you aren’t valued
So, you’ve put in the time and effort to plead your case and demonstrate your value to the company, but your boss won’t budge. Depending on the general mood of the conversation, you can wait until the subsequent performance review to plead your case.
Else, throw your hat into other employment options. Polish your resume and use these interview tips to increase your success odds.
Don’t burn bridges with your current employer, though.
Even if the company didn’t give you what you think you deserved, they gave you experience and perhaps some valuable skills. It’s much easier to get recommendations from former colleagues when you’ve left on good terms.
Sure, money does not guarantee happiness—but a fat paycheck helps! However, as you can see, there are multiple dimensions to a good performance review but no raise situation.
Ask, and you’ll receive. But there’s an art to this. Enter the conversation with an open mind, but more importantly, practice how to get the best outcome. The above strategies should help.
If the manager is consistently adamant about granting your request, please start prospecting elsewhere. You want to work for an organization that recognizes your market value and supports your career growth.