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What metrics do you use to justify a pay raise?

7 Answers
Anton Kravchenko
Anton Kravchenko
Carta Sr. Director of Product ManagementFebruary 4

It's less about metrics and more about the outcomes you are creating for the business. For example, you might bring 10,000 new users or improve a UX for a specific feature -- but what matters at the end of the day is how you impacted the business. Has any of that made the business grow faster or made it more resilient among competitors?

Depending on the company size and what you do, some outcomes might be more obvious than others -- for example, there was a time when I worked as a PM for a relatively small product, which generated direct revenue to the business. When the product made the first $1M, everyone wanted to talk to me including the CEO. On the other hand, you have internal products that might not directly translate to revenue. It's important to provide this visibility and translate how your product affects the business e.g. more users, less cost, faster feature delivery, etc. 

Suggest you check some of the videos I recorded here as they cover this topic partially - https://www.youtube.com/channel/UCsAz_arwNkiPobhi09VrMFg

959 Views
Natalia Baryshnikova
Natalia Baryshnikova
Atlassian Head of Product, Enterprise AgilityFebruary 17

At Atlassian, we look at multiple pillars of value PMs bring to the organization: delivering outcomes (think - moving business KRs and goals), leadership (inspiring others), communication, helping others grow product craft and so on. 

I really love this framework. My recommendation is to first approach promotions and pay raise from a perspective of summarizing what types of value PMs in your org bring. It is not just in the "metrics", there may be other valueable things that advance the org/business that deserve getting people a raise. 

Then, I recommend looking at the market periodically to see the prevailing compensation for a given seniority role.

Lastly, in the great resignation market, you want to be generous with your top talent contributors. Know who they are and make case for them as a manager - it will be much more expensive to hire someone new and grow them, if your top performers leave. 

842 Views
Louisa Henry
Louisa Henry
Gusto Head of Product for Mid-Market BusinessesApril 22

I'm interpreting this question as "what metrics do you use to justify a promotion." Ideally you're working at a company with pay equity (eliminating sex and race discrimination in the wage-setting system).

If your company has performance axes, I’d start there. Understand what it means to be exceeding expectations at your current level, and what the gaps are between you and the next level. If you’re not sure, ask your manager. More than likely, they’ll be happy to have a career discussion with you.

As for metrics, think about it in terms of business impact and customer impact. What metrics have you been successfully able to move to help drive the business forward. At the highest level, think in terms of revenue, churn reduction, new customers, gross margin. If your product doesn’t directly move those numbers, what are the leading indicators that you are moving that should be impacting top line metrics? Ex: customer adoption can be a signal that your product is useful to customers, and may therefore be contributing to them staying longer, and adding more revenue and reduced churn. On the customer side, find metrics to understand how happy customers are with your product. CSAT, NPS, customer effort scores can all be helpful here. Qual and quant are both important.

If you find you’ve been consistently performing at the next level expectations for 3-6 months, document your rationale, and talk it through with your manager. If your company has a cadence of regular performance reviews, use this document as an input to that process.

746 Views
Sharad Goel
Sharad Goel
Homebase VP Product & DesignMay 12

You need to determine what is your value in the market. I encourage you to constantly determine that by talking to external recruiters. Also ask your company to share benchmark data on where you are compared to where the benchmarks are - these are readily available and every company should be investing in these.

426 Views
Vasudha Mithal
Vasudha Mithal
Care Solace Chief Product OfficerDecember 6

Unfortunately, there is no set formula for this. Here are some ideas for quantitative research:

  • Look into salary benchmarking data. Levels.fyi is a great resource for researching.

  • Understand internal pay policies (e.g. if the company is targeting 50th percentile among your specific industry). Ask HR for aggregated salary insights - data on pay gaps, etc.

  • Talk to external recruiters and see what they are willing to offer for your unique experience(s). Depending on the relationship you have, close connections in your network might be willing to offer pay ranges.

  • If you've switched jobs, prior managers might be able to offer pay ranges.

  • With new labor laws, companies are required to disclose salaries along with job postings in a few geographies. Look closely at job postings on LinkedIn to get an understanding of the base comp.

  • Ask ChatGPT!

For a more qualitative discussion with your manager:

  • Frame the discussion as how much you love working at the role and are continuing to learn - which you value a lot.

  • You believe in and are grateful for the company's philosophy of "pay for performance" (all companies will say they have this) and how that is a great tool for motivation and retention.

  • You'd want to ensure that you are treated fairly. Then highlight your performance highlights - contribution to x out of y initiatives most important for the company this year, drove so and so impact, operating at the next higher up level (provide exact examples based on how the next level is defined at the company).

  • Align on a fixed cadence in your 1-1s to have this discussion (e.g. 1/QTR or 1/6months).

The above discussion points can be used for both promotion as well as a pay raise. All the best!

367 Views
Sheila Hara
Sheila Hara
Barracuda Networks Sr. Director, Product ManagementFebruary 1

To justify a pay raise, it's important to present metrics that clearly demonstrate your value, impact, and contributions to the organization. Here are some key metrics and accomplishments you might use:

  1. Performance Against Goals: Highlight how you've met or exceeded specific performance goals or targets set for your role.

  2. Revenue Growth: If applicable, show how your work has directly contributed to an increase in revenue or sales.

  3. Cost Savings: Provide examples of how you've helped the company save costs through efficiency improvements or innovative solutions.

  4. Project Success: Detail successful projects you've led or significantly contributed to, particularly those that have had a positive impact on the company.

  5. Productivity Improvements: Demonstrate any improvements in productivity, either through your direct work or through process improvements you've implemented.

  6. Customer Satisfaction: If you've contributed to increased customer satisfaction or engagement, use data from customer feedback or satisfaction scores.

  7. Team Impact: Show how your leadership or collaboration has positively impacted team performance or morale.

  8. Professional Development: Highlight any additional qualifications, certifications, or training you've completed that enhance your value to the company.

  9. Market Benchmarking: Provide research on typical compensation for your role in the industry, showing how your current pay compares.

  10. Innovations and Initiatives: Mention any innovative ideas or initiatives you've successfully introduced.

Remember, the key is to tailor these metrics to align with the objectives and values of your organization and to clearly articulate how your contributions have had a tangible positive impact.

354 Views
Omar Eduardo Fernández
Omar Eduardo Fernández
GitLab Director of Product ManagementFebruary 15

To justify a pay raise effectively, it's essential to focus on three main factors: your current position and level within the company, how your salary compares to market benchmarks, and your placement within the company's pay band. Firstly, to argue for a higher level, compare your responsibilities with those outlined in job descriptions for higher levels both within your company and in the industry. Secondly, utilize platforms like Glassdoor to understand how salaries at comparable companies stack up against yours. Finally, if you're nearing a promotion, use this as leverage to argue for a salary that bridges the gap between your current level and the next, reflecting your contributions and potential for advancement.

422 Views
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