RaisesHow common is it for corporations to just give the same percentage raise for all of its employees? Seems like a poor system, as it doesn't give the employees any incentive to work their best. There is probably a fair amount of people who would just put in the minimum amount of work necessary to avoid being fired.
I've heard of across-the-board cost of living increases, but you're right, it doesn't make much sense to give everyone a merit increase of the same percentage. In my position, we're evaluated yearly and placed in a category (Outstanding to Unsatisfactory). Each category then gets the same percentage (i.e. all the Outstandings get 5.3% raise). We also get a bonus at the same time, and this is done on an individual basis, so one Outstanding may get more than another, depending on how valuable the company feels he/she was that year. We also get an annual bonus at the holidays, always the same, equal to 1 week's pay. You are so lucky. I work in a hospital and we get a 2-3% cost of living increase annually, but no raises. We get our annual review, but no merit raise with it. So the worst of the employees and those of us who bust our butts all get the same increase. It isn't fair and it really does encourage people not to do their best because they will end up with the same pay as the person who just does what he has to do to keep employed. Yesterday at the end of the work day they fired 7 members of mid-level management. Some of these people have been with the hospital for 25+ years. There is no incentive to do our best. Nor is there an incentive to give them our "all". They certainly don't appreciate years of dedication from us. In my previous company, your raise was based upon your annual performance review. In my case, my manager always gave me the average or below adverage rating although I was one of the top three sales people in the company. I once brought in $22 million in sales. The policy was to give the sales person 1.25% bonus based upon sales. I was to receive $275,000 BUT because of my bad performance review, I did not get this 'bonus'. It went to my manager! I did get a 1% raise on my base salary but BIG DEAL! In my current company, our pay increase is directly related to our production and if we meet or exceed our annual goal. Last year I did pretty good in both bonus and raise. I received a 7% base raise plus my year end bonus. This year my department has increased sales 45% over last year so I think we will be getting a nice bonus. But that increase is attributed to the fall of the American dollar. People are now spending their vacations here in the States rather than overseas. So in a way, it is a blessing for us! It's common. A lot of bad companies out there. At my company it works 1% - meets, 2% - exceeds, 3% far exceeds. Based on this, there is no reason to exceed or far exceed because you work your tail off, increase sales, save the company money, etc...and you only get about $10 more a week than the guy who's mediocre. I've developed my theory of how people become Turtles at Work..slow, methodical, and mediocre employees because companies fail to incent and reward. Welcome to the party. YOu can either find a new company, which is probably as bad or worse than your current. Or become a Turtle like many of us have. Turtle King http://turtlesatwork.blogspot.com In corporate America this is very common. I received an outstanding performance review and was able to get an extra 1/2% of a raise. I was told someone else had to lose that 1/2% for me to earn it! I started looking for a new position based on two years of raises at less than 4%. In my experience, the only way to get decent raises is to go to new companies, which is something I have never understood. The learning curve for a new employee loses the company business, plus time and expense recruiting and hiring. A new person will also probably make more than the replaced employee! Not to mention the information stored only in the departing employees brain. I understand there may be exceptions to the rule, companies not earning profits, industry etc. But greedy management expecting employees to trod along on less than cost of living increases is not a viable alternative.
It is common but it isn't always a bad thing either. In many companies they feel that everyone supports the process, therefore everyone gets a raise (unless they're failing their review or on probation or something). That can be very fair to the admin assistant that supports the sales guy. This is also how many union jobs and most government jobs operate. You get paid for seniority and not (unless it is terrible) related to productivity. More often, however, what I think you'll see is a blanket amount (say 2-3%) for those that get a high score on their evaluation. So, in my company, if you get a 4 or 5 out of 5, then you can get whatever this year's base increase is. If you don't get that, you get nothing. In other companies they throw that base increase into a pot and divide it between the high achievers so one person could get 10% but the others would only get 1% to make up the difference.
Tess Tess, this is the reason why you do not see too many people working for one place more than 15-20 years. My nephew works for a major drug retailer and he showed me a newsletter of their company. In the newsletter lists the tenure of the employees. One employee was a stock clerk for 40 years!! I guess he didn't want to be paid what he was worth! In Corporate America, I think the great employees know if there is not advancement opportunities or decent pay increased for excellent work, then it is time to leave. One of my college professors told us as far back as 1983 that if you do not get promoted within 3 years or receive a decent pay raise, to start looking for another job elsewhere. Our law firm changed from having performance reviews and salary increases on our anniversary dates to having all of the administrative staff having their reviews every April. So the main office gets all of the reviews, including the branch offices, and makes the determination what the going rate will be for raises. This year it was 3.5%, so that's what all staff doing an adequate job was given. I did more over the year and put it on the "comments" section of my review, so fortunately I did receive more. I don't particularly like that most jobs have a maximum salary for each position. That just gives employers the excuse to keep salary increases down. That way it's hard for them to keep the focus on the accomplishments of the employee and what those accomplishments are worth. I worked at one company where I excelled through the pay scale and hit the maximum three years later with no possibility of promotion. Needless to say, I had to quit and find something else. Actually, OC, most of the people that like this kind of pay practice work in Government jobs. Some people really like that sense of security that they get from the "guaranteed" annual raise. That also usually translates (public or private sector) to a workplace that isn't too agressive on pushing goals or quotas on work and again, some people really like that. To each their own!
Tess | |
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Career Tips
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