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Corporate america and 3% raises
Old 02-16-2016, 03:16 PM   #1
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Corporate america and 3% raises

To be brief, I work for a bank...none of the banks are hurting. I received the equivalent of a 2.5% raise. My question is, why so low? I was under the impression banks did very well last year, and I received basically the best review I could receive (only 5% of folks received the full 3% as the CEO states only 5% of workforce performs exceptionally in a year, and as such only 5% are awarded the full 3%)

This is a employee and non-profit owned bank, meaning that its not run by boards. Why wouldn't you reward good workers with a higher salary? I am accustom to earning more than 3% and have earned as high as 10% salary increase.

Perhaps I am just making my case here...


I don't buy this 3% raise BS. I can EASILY go get a job that pays me 15% more. Do I wait out these 3% raises in lieu of a Pension in 10 years...and an opportunity to receive a 15% bonus every year..or do I walk and increase my bottom line?

am I way out of line for complaining about this or are other bank employees receiving similar raises at or around 3% ??
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Old 02-16-2016, 03:37 PM   #2
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I don't buy this 3% raise BS. I can EASILY go get a job that pays me 15% more.
When I was in banking the only way you got paid your market value was to walk in with an offer letter in hand and be ready to jump ship. If you're not willing to move to a competitor, then from your company's perspective, they're paying you enough.
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Old 02-16-2016, 03:38 PM   #3
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I think the not so new normal is to move around every few years if you have the ability to do so. How does the pension vesting work?
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Old 02-16-2016, 03:41 PM   #4
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maybe you're starting to flatline? most everyone does eventually


what is the bank's compensation philosophy? pay at the median or the 75th percentile?
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Old 02-16-2016, 03:56 PM   #5
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I agree with Big_Hitter, you're flat lining. According to your profile, you're 34 or 35, so you have about 12 years experience. You're no longer in that early career phase where you can get 10% raises without getting a promotion. 2% to 3% is normal for an "above average but not 'walks on water' level" review in a year where inflation was at 0%.

You can definitely go get that 15% salary increase somewhere else, but you have to look at total compensation. You may very well lose more than that if you have good bonus and pension plans where you are.
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Old 02-16-2016, 04:12 PM   #6
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I work for a Fortune 500 bank. 2.4% raise. It's all based on market value, sort of.
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Old 02-16-2016, 04:17 PM   #7
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I work for a Fortune 500 bank. 2.4% raise. It's all based on market value, sort of.
I'll quit my griping. I was hoping to flat line like 2-3yrs from now but you are correct, I am sort of at that plateau. I suppose the only leverage would be to have that other offer letter ready.

There's a fine line between making more money than I need and working too hard for that extra money I don't need...yeppp it's a flat line, someone go get the paddles.
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 02-16-2016, 04:19 PM   #8
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welcome to club flatline
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Old 02-16-2016, 04:25 PM   #9
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I'll quit my griping. I was hoping to flat line like 2-3yrs from now but you are correct, I am sort of at that plateau. I suppose the only leverage would be to have that other offer letter ready.

There's a fine line between making more money than I need and working too hard for that extra money I don't need...yeppp it's a flat line, someone go get the paddles.
You are still young. If you want more money, get a promotion. Switch to a different job title.

Just because you have been at a place for 10 years, doesn't mean you have 10 years of experience. It may be two years of experience, 5 times over.
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Old 02-16-2016, 04:52 PM   #10
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I work for a state government and the raises have always been pathetic. I have finally gotten up to $60k after 15 years. I know I could make a lot more money in the private sector, but I don't want to give up the other benefits of working for the man...
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Old 02-16-2016, 04:56 PM   #11
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... I suppose the only leverage would be to have that other offer letter ready.
To that, I would just say don't give an ultimatum unless you are ready to follow through on it. You may find that your employer doesn't really do counter offers and will just wish you well as you pursue your new job.
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Old 02-16-2016, 05:03 PM   #12
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we had a guy go in to the bosses office (this was 25 years ago) and say "hey, I got an offer from one of our competitors but I don't want to quit"


boss called the competitor right there and they pulled the offer


DOH
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Old 02-16-2016, 05:21 PM   #13
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And don't count on that pension. I'd be willing to bet that it will be frozen or done away with long before your reach retirement age. I expect my DGD will need to go to a museum (or Congress) to see a pension.
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Old 02-16-2016, 06:04 PM   #14
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One reason the raise may not be as high is you expect, even with stellar performance, is that you may be at, or close to, the top of your pay range. This would be a good question to ask during your annual performance review.
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Old 02-16-2016, 07:59 PM   #15
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Go across the street and get that 15% raise.

Also, I'm not sure how well US banks did but DW's previous foreign investment bank employer did kinda bad ($6 billion loss last quarter). They've started to lay off thousands in NYC and London (while hiring in Raleigh). Other European banks did poorly too.
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Old 02-16-2016, 08:06 PM   #16
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We've got to vote with our feet.
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Old 02-16-2016, 08:43 PM   #17
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Much of corporate America has moved to pay grades...bands. Based on your salary, you are either in the bottom, middle or top third of your band. If you exceed performance there is the opportunity to receive beyond the standard amount. If you want to increase your salary over 5-8%, you must either earn a promotion and take on additional responsibilities or leave your present employer. It's the way of the world these days.
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Old 02-16-2016, 09:35 PM   #18
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Originally Posted by kgtest View Post
To be brief, I work for a bank...none of the banks are hurting. I received the equivalent of a 2.5% raise. My question is, why so low? I was under the impression banks did very well last year, and I received basically the best review I could receive (only 5% of folks received the full 3% as the CEO states only 5% of workforce performs exceptionally in a year, and as such only 5% are awarded the full 3%)

This is a employee and non-profit owned bank, meaning that its not run by boards. Why wouldn't you reward good workers with a higher salary? I am accustom to earning more than 3% and have earned as high as 10% salary increase.

Perhaps I am just making my case here...


I don't buy this 3% raise BS. I can EASILY go get a job that pays me 15% more. Do I wait out these 3% raises in lieu of a Pension in 10 years...and an opportunity to receive a 15% bonus every year..or do I walk and increase my bottom line?

am I way out of line for complaining about this or are other bank employees receiving similar raises at or around 3% ??
The new realities in the world of work are thus:

1) The labor market is like any other market: supply and demand. Regardless of meaningless organizational phrases such as employer of choice, employees are nothing more than an expense to employers.
2) In the labor market, the number of job seekers who are "average" exceeds the demand of jobs needing to be filled.
3) Employers are engaged in a so-called "war for talent", and if you are that talent, have no life and are willing to sell your soul, you'll be paid accordingly and handsomely. Everyone else will get scraps. (Additionally, in organizations today, obscene amounts of money is flowing to the top 10-20%, to the management and so-called leadership ranks; the bottom 80% aren't doing so well, eating cake, basically).
4) Standard raises before the 08 meltdown were 3% - since then employers learned they could get away with 2.5% without adversely affecting turnover.
5) A high % of employers use pay-for-performance and a bell curve when awarding raises. Following a bell curve, approx. 80% of employees will get 2.5%, about 10% will get less than that, and another 10% will get more than that. This means unless you are killing yourself at your job, you most likely shouldn't expect more than 2.5%.
6) If you can "easily" (as you say) get another job with a 15% increase in pay, I would personally do so immediately because (a) it's doubtful your current organization will match that (unless you've grossly underestimated your worth to them, which is entirely possible), (b) there's little, if any, guarantee the pension will be there in 10 years (given the historic track record of pensions reneged on/converted to DCB's); (c) your current organization could merge with another, your department could downsize, or you could be lucky enough to get a boss-from-hell supervisor who "eliminates" your job, either through restructure or through the "progressive discipline process".

Loyalty to an employer can be a suckers game, if you're not careful. My recommendation is to be loyal to (good) bosses, to (good) people, not organizations. You could be blown out the door tomorrow if a "business decision" was deemed to warrant it. If you can reasonably job hop your way to salary increases while gaining added experience, contacts, and expanded opportunities, it's certainly a worthwhile strategy.

All you have to sell is your time. Just as organizations seek to maximize their return on equity, your job is to maximize your return on energy expended. This means, for as long as you must work, your job is to get as much return in benefits, salary, and other perks in return for the life energy you expend by working at that job versus other things you could be doing.

Hope this give you some perspective. Good luck, whatever you decide.
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Old 02-16-2016, 09:49 PM   #19
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Welcome to the club......

I'm not in banking, work as an engineer. Unless you sell your soul to the company and don't have a life, you are on the small slope portion of the curve. That slope is the 2.5-3% per year. The bad part is that you never really get much ahead of the inflation curve with the 2.5-3%, so you have to make do at that level and std of living. The only real way is to jump ship, or get a promotion as others have said.

Yes, it sucks. Also why it is so critical to LBYM and save now, so you can get off the small raise climb.
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Old 02-16-2016, 10:54 PM   #20
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I wonder if you really can get 15% higher than you have now... many people overestimate what they can get by jumping ship...


I never had a lot of people work for me, and I had zero say in their salary, but whenever they would come and ask to be paid so much higher than they were getting, I just told them that they should take that offer since they will not get it here... only had one person jump ship and it was a 5% increase...


If you really can get 15%, then jump... do not wait... you can NEVER catch up to that if you stay.... you will always be behind... because you will be getting raises at your new place based on a higher base...
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