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Old 11-13-2015, 04:46 PM   #21
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Originally Posted by cathy63 View Post
As a manager working on performance reviews from the other side of the table right now, I agree with a lot of the advice you've gotten in this thread.

I would say that it's also important to understand how raises typically work. There are three main reasons you can get a raise:
1) a market increase if your paid well below average for your experience and location, or if you're new to the workforce and in the phase of your career where salary tends to grow rapidly
2) a merit increase, which is what the 4% budget represents
3) a promotion with a new title and responsibilities

To make the case for a 14% market increase, you have to know what your value is in your market and be able to show through your list of accomplishments that you're providing that much or more value to your company. There are lots of places to do research online as well as looking at posted jobs to see what other employers are offering for similar work.

For a merit increase, your manager has a finite pool of money which amounts to 4% of the salaries paid to your team. Your manager has to divide that money among everyone in the group. If she gives you a 14% raise then everyone else is getting a smaller raise. For example, if there are 6 people earning the same amount and the total increase is 4%, then giving a 14% increase to one person means the rest of the increases will average 2%.

So it doesn't really come down to whether you did great work or met every one of your goals, but rather, did you do it all so much better than everyone else that it warrants giving you much more and giving them all much less. You can figure out your chances for a large merit raise by looking around at the people you work with and thinking about how much value your work provides to the company relative to theirs. If you're not at or near the top of your group, then asking for 14% is probably too big a stretch.
While I agree with most of what you said, I am almost positive that my firm does not approach raises in the manner you suggest in your last two paragraphs.

I can see that approach being taken at large companies, but I work at a small company that is growing rapidly. We are only about 40 employees, but our revenues have doubled each year for the past few years. Our net worth as a company has increased substantially year over year, as we have retained a large portion of our earnings. Moreover, I don't have any direct competitors that I work with within the firm that would "steal" my promotion money. My colleagues in my department all have much more experience than me, and are likely paid more than I am.

In my opinion, for my situation, I think it all boils down to how much they like me, how much value they think I've added, and how much they think I will add in the coming year. For them to give me a ~15% raise, given our success and high retained earnings is like a drop in the sea.

I know I probably sound ungrateful and like I'm assuming money grows on trees, but it is relatively true. I am the youngest person at our firm (26), and many of my colleagues have been in the industry for decades and likely earn 3 times what I earn in both salary and bonus. This doesn't justify a promotion for me, but my point is that I am cheap to my employer compared to my colleagues. And it is important that as I progress and take on more responsibility that my pay catches up to them.....
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Old 11-13-2015, 05:47 PM   #22
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Originally Posted by younginvestor2013 View Post
While I agree with most of what you said, I am almost positive that my firm does not approach raises in the manner you suggest in your last two paragraphs.

I can see that approach being taken at large companies, but I work at a small company that is growing rapidly. We are only about 40 employees, but our revenues have doubled each year for the past few years. Our net worth as a company has increased substantially year over year, as we have retained a large portion of our earnings. Moreover, I don't have any direct competitors that I work with within the firm that would "steal" my promotion money. My colleagues in my department all have much more experience than me, and are likely paid more than I am.

In my opinion, for my situation, I think it all boils down to how much they like me, how much value they think I've added, and how much they think I will add in the coming year. For them to give me a ~15% raise, given our success and high retained earnings is like a drop in the sea.

I know I probably sound ungrateful and like I'm assuming money grows on trees, but it is relatively true. I am the youngest person at our firm (26), and many of my colleagues have been in the industry for decades and likely earn 3 times what I earn in both salary and bonus. This doesn't justify a promotion for me, but my point is that I am cheap to my employer compared to my colleagues. And it is important that as I progress and take on more responsibility that my pay catches up to them.....
If you are 26, then you are in the early phase of your career where salaries should increase more rapidly (percentage-wise) and you might very well be able to negotiate a 15% increase. Just approach it as a business negotiation. Be matter of fact about your achievements, not arrogant or entitled, but not overly humble either. You don't have to be grateful to them for employing you. You are performing a service that has value and you want your earnings to be commensurate with the value you provide, and that's a completely reasonable position. You just have to be able to state what your value is and back it up with facts. Give your manager enough ammunition to be able to go to the higher-ups and get a larger than average raise signed off.
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Old 11-13-2015, 06:48 PM   #23
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As a manager working on performance reviews from the other side of the table right now, .... Give your manager enough ammunition to be able to go to the higher-ups and get a larger than average raise signed off.
I've been on the other side of the table too, and have an "ammunition" story.

There was a guy, a contractor, who wanted to go W-2. A productive, energetic guy, so I got headcount slot opened for him. But he let slip that he needed a W-2 so he could buy a house (not to me, but to my boss). My boss only released budget to offer the guy about 75% of what he was worth. He reluctantly took it, and I promised to go to bat for him with everything I had if, after 3 months, he knocked out a bunch of stuff that had been nagging the company for years under lesser programmers. Lo and behold, he moved mountains. I went to the top just to get him an average salary for someone at his level. Denied. He quit the next day. I don't blame him. Meanwhile, I got like 38 grand bonus that I didn't deserve.
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Old 11-13-2015, 08:19 PM   #24
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I have another question for you guys - do you think there's a certain amount of time ("rule of thumb" type thing) that has to pass (I.E., don't ask for a raise until you've been there for at least 2 years) before you should ask for a raise?

Just curious bc I was talking with a friend about this and he said since I've only been there just short of a year and a half that is too little of time to already be asking for a raise.

Not sure I agree with him, but I'm curious to hear your thoughts.


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Old 11-14-2015, 06:25 AM   #25
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Merit raise should be annual. It can be set around your hire date or if the company has a standard timeframe, i.e. raise after review period. For my company, review period is Jan - Dec, with review in late Jan, raise in Feb. The raise is prorated if you did not work the full 12 months.

For special cases, a mid-year cycle is possible for merit raise and/or promotion.

One other thing to consider, how well are you liked by your team and management? Not saying this is right or common, but my personal observation is that the brown noser or "favorite" can get more.

With or without the large raise, how much more can your personally gain from your current employer in respect to experience and knowledge. Will it give you that edge to get to the next level of pay or responsibility if you left?

Good luck.
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Old 11-14-2015, 07:29 AM   #26
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I have another question for you guys - do you think there's a certain amount of time ("rule of thumb" type thing) that has to pass (I.E., don't ask for a raise until you've been there for at least 2 years) before you should ask for a raise?
If you're under payed and can put together a reasonable case for a raise, why wait? For an unwritten rule? You need to go in, present your raise request, and start a dialog. Always keep your eyes open for better positions so that you can bargain from a position of knowledge.
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Old 11-14-2015, 10:12 AM   #27
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I've been on both sides of this equation. A few thoughts:

1) I've had a completely non-linear salary growth curve because I consistently did things that were way out of the box, took big career risks, spoke for & drove big change. If your argument is that you're a junior widgeteer and you turn out 1.25x the quota of a junior widgeteer and therefore should be a senior widgeteer I think you're not on firm ground. Might be true but hard to not sound like a whiner. Find a way to get 2x out of all the widgeteers or take those widgets into a new market. Now you're talking about something big.

2) With only 18 months at the firm I wouldn't go anywhere near this conversation unless you're either holding a viable outside offer and want to stay or you're driving big change. Otherwise, suck it up for another year and be a team player. Right around Year 2, outside of performance cycle, plant the seed. If you're holding an outside offer for 25% more, approach the conversation as "I really want to stay here, but I need help closing this gap" and not "give me 25% more or I'm leaving." Remember that these are emotional conversations that shape your personal brand.

3) When it comes to having facts together, I'd make sure that the variations between you and others are large and not shades of gray. If someone who's been there longer than you is making 10% more, leave it alone. If its 25% or you're missing some major perk, go in but ensure you do it in a non-threatening and reasonable tone.

4) See it through your boss's lens -- timing is everything. If s/he is under withering fire about dept size, the company's cash position is tight, or frankly they're just not in a position to hear it right now, pick your shot. Remember that it's often your boss' boss who gets final say, particularly for senior positions. Widget-count is irrelevant if you're not managing visibility & politics properly. May not like it, but its just true. 10x true for senior jobs.

I once was in a position where I realized I had been had on what I was making for a big job that I relo'd for. I was essentially the only person building the dept for a new GM in a new business. As he started to fill in my peers, it became obvious that I was underpaid by 25% and more importantly others were deferred comp eligible while I was not. That said, I was carrying so much of the load, that if I brought up comp at that point it could only be perceived as a threat. I waited until the team formed and one day asked my boss to take a look at it. Initially he wasn't very receptive (in part because I came off as a bit whiny by comparing myself to someone more senior) but he did ask HR to look into it. Nothing happened for 3 months. Right before EOY I asked about the conversation and all he would say is "You don't need to worry about that."

At annual review time he surfaced with a 25% base pay raise, increased my bonus oppty by 10% and I was now eligible for deferred comp. I did some quiet checking with HR and he had moved me from a low-pay VP to perhaps the highest paid VP in the company. He had worked it for months to make it happen. Oh, and from that point on I was officially "his" guy.

Timing, patience, relationships and facts are everything.
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Old 11-14-2015, 10:42 AM   #28
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Just be sure to have your facts straight when you do your review. Numbers help and matter. As a manager, I"ve heard the "taking on more responsibility" line before and when looking at what they did and what I had expected of them, yes they took on more responsibility which then put them to exactly where they should have been all along...so just be sure your viewing yourself in the correct light compared to what you were hired to do.

I wouldn't push too hard the first go around, but I would make it clear that I'm interested in progressing my career and if there is advice or things I need to do to get to the next level, this would be the time to discuss it. What other projects or scope may I look into. At most companies I worked for only nominal pay increases were in order unless being promoted in which large jumps (15%+) were granted...and that usually took some planning at the yearly review to put together material so my boss could put me in for consideration the following year...ie facts, facts, facts.

Being a small company, its hard to tell if your boss has the ability to hand out pay adjustments/promotions or how they even handle that...though being there a year+ I'm surprised you haven't found a confident at work you could have asked about this. Every company works differently and every manager treats things differently, some people go off the "well if they don't ask for it, why would I give it mentality", some have their hands tied, some are motivated by "who covers my rear the best".. part of "getting ahead" is learning how the politics in your office works and then making sure to adjust your game accordingly. You don't have to be rude or aggressive, but you do have to understand what 'merits' promotions as yearly pay increases will not likely get you what you desire...since they really are just to keep up with inflation typically.
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