How to approach year-end review discussions

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younginvestor2013

Recycles dryer sheets
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Feb 6, 2013
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Hi All:

As many of you who are still working are likely aware, it is close to the year end review season. Many of you likely despise these reviews, for good reason. In my experience at my current company, they haven't been a painful exercise and I've been impressed with the level of honest and straightforward feedback (i.e., not a ton of "BS") I've received in prior reviews.

I am coming up on almost a year and a half at my current company, and I am due for a pay increase. I am fairly confident I can expect a fairly nominal inflation increase (4% or so), based on discussions with other colleagues.

However, I was wondering how some of you suggest approaching my managers for more money? Or should I not do that at all? I quite honestly think I could be up for a promotion, as my job responsibilities have increased a ton in the past year. As I've learned the job, I've become more efficient and been able to handle the workload. But, I have taken on a lot more responsibility, and think I am ready for the next level. I work at a fairly small company, though, yet we are growing rapidly and very successful financially speaking. I don't want to approach the review in an aggressive, stand-offish sort of way being like "I deserve to be promoted, I deserve this salary, I deserve this and that..." etc etc. I want to approach it with tact, yet still respectfully point out my accomplishments and the success of the firm, etc.

Just curious to hear what your thoughts are on how I should approach this. Since I work for a smaller company, roles aren't "black and white" defined, and it is very likely that my responsibilities will continue to increase in 2016. As such, I feel I deserve a raise over the standard 3-4%. I think a raise of around 10%+ would be competitive, but I don't want to leave a sour taste if my managers weren't viewing things quite the same.

I was thinking of starting the convo off by saying - "I think I've accomplished a lot over the past year (mention some accomplishments)....and I think I deserve a healthy raise for 2016 but I wanted to see what your thoughts were......"
 
I wouldn't have been aware of this because I never had a review at the end of a calendar year. Instead they were around my work anniversary, or the company's fiscal year, or whatever time of year they chose to do reviews. But that's beside the point.

The best approach I made when I felt a promotion was due was to ask what I needed to do to get that promotion. These were just level promotions, or whatever it is called when you keep the same job but just get a higher level, and therefore more salary along with higher expectations and probably more responsibilities. Once I think it was already in the works and came soon after, but another time my manager came back to me a week or two later and said he thought about it, realized I was already doing everything, so he went to the director and got me my promotion.
 
Also, depending on how your company works, you may want to be proactive and put the bug in your manager's ear before the review. Often whatever raise is already set as you go into the review and the manager can't do anything at that point to change it. But if you go in before your manager gets approval from above for your raise and point out what you've accomplished and ask him/her to go to bat for you for a decent raise, they might be able to do more.
 
RunningBum said:
Also, depending on how your company works, you may want to be proactive and put the bug in your manager's ear before the review. Often whatever raise is already set as you go into the review and the manager can't do anything at that point to change it. But if you go in before your manager gets approval from above for your raise and point out what you've accomplished and ask him/her to go to bat for you for a decent raise, they might be able to do more.
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+1
Where I was, the raise was already figured when we talked.

The way it worked at Megacorp was you did the next job then you got the title. I always had discussions with my management or employees about what it took for promotion in advance. Promotions were seldom done at year end reviews because of the way budgets(bad memory:)) were done.
 
In my 30+ years in Megacorp(s), it usually came down to whether I was the bosses pet that year. It didn't happen often, but there were a few instances where I was the most valuable person in the department and I knew it and my boss knew it. That's the time to put a bug in the ear about a promotion.


Of course, there were those years where I performed well, but got an average raise because Steve was underpaid and needed to be caught up. And, there was a 5 year period of average raises because Susie wore short skirts and smiled at the boss constantly (that was basically all she did). So, I guess my answer would be if your boss knows you've been doing a great job and Steve and Susie don't work with you, then by all means mention you deserve a promotion. Most all of my promotions came about because I asked for one.
 
In most of the companies I've worked for, asking for a raise while keeping your current job was a waste of time. They had "policies" for that. The policy would sometimes involve getting good reviews. Your best chance would be to compare your level of responsibility when you first got your current job level to what level of responsibility you have today. If there's a big increase in responsibility without and increase in pay, you at least have footing.

I'd just construct an up to date resume that shows how much responsibility I took on in my current job. And don't tell the companies you're interviewing how much you currently make. Never, ever, no matter what they say or how they ask. They are bidding on what you can bring to them. You don't know enough about the job to tell them what value you can bring to their organization. But yeah, in my experience, leaving is the only way to get a decent bump in salary.
 
sengsational said:
In most of the companies I've worked for, asking for a raise while keeping your current job was a waste of time. They had "policies" for that. The policy would sometimes involve getting good reviews. Your best chance would be to compare your level of responsibility when you first got your current job level to what level of responsibility you have today. If there's a big increase in responsibility without and increase in pay, you at least have footing.

I'd just construct an up to date resume that shows how much responsibility I took on in my current job. And don't tell the companies you're interviewing how much you currently make. Never, ever, no matter what they say or how they ask. They are bidding on what you can bring to them. You don't know enough about the job to tell them what value you can bring to their organization. But yeah, in my experience, leaving is the only way to get a decent bump in salary.
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For me at Megacorp, I did get a raise a couple of times by just asking. They were nominal, however. The bigger ones came with a threat to leave, but you have to have an offer in hand and be ready to actually leave and be convinced that if no raise is forthcoming that you'd be happy at the new job. On the flip side, I really really hated that method - it just never made sense that the boss would only take notice when you were ready to walk out the door. Yeah, I know, that's how the game is played, etc., but it still felt slimy....
 
Thanks for the advice everyone. It sounds like most of you are suggesting I come in and lay out my progress and accomplishments over the year, and look on to what I will accomplish in the next year and then ask for the raise?

I am leaning towards not framing it around asking for promotion, and keeping the focus on my increased responsibility over the past year and how my responsibilities will increase over the next year. As I mentioned, we are a smaller company so I think there is less of a focus on title and more of a focus on workout put, which I have the power to back up with my accomplishments.

I don't know why, but for some reason I am hesitant that my speaking up will backfire on me and make me look too aggressive and bold.

If they ask me for what I think my pay should be, my target salary is about 14.5% more than where I am at now. Is that too aggressive?
 
Exceeding expectations and taking on new responsibilities is certainly reason for you to aspire to some better salary treatment. I also suggest being proactive and planting the bug in your managers ear before the budgeting process is finalized, and that given your performance and expanded responsibilities, you are hoping for a more favorable salary treatment this year. Good luck, being assertive, not overly aggressive, is always a good way to go in the business world.
 
When I was a manager, I never minded if someone asked for a larger salary increase as long as they did it professionally and had facts to back up the request. I think it works better at the end of the discussion rather than the beginning. I do think 14.5% is a bit much to ask for in these days of low inflation and skimpy raises in general, but if 4% is the norm, I might ask for 7 or 8. Another approach is to ask if there is any chance for an additional raise mid-year based on agreed-upon criteria. In terms of promotion, smaller companies are very different from larger ones in that regard, so it would be reasonable to talk with your manager about what the general process and timeline is for promotions.
 
younginvestor2013 said:
If they ask me for what I think my pay should be, my target salary is about 14.5% more than where I am at now. Is that too aggressive?
Click to expand...


I would frame it as my offer to take on more responsibility as part of helping the company become more competitive and efficient.

Even better, find a job that pays 25% more.
 
Once a year recap is way too long for valuable feedback. At minimum, at your initiation, you should take time with the boss to review performance and accomplishments if only 10 minutes over a cup of coffee. If your boss is aware of things around him, it should be a just a update. Each time building to take on more responsibility and seek new challenges. After a couple of meetings ask him what position opportunities there might be coming up. I would not ask for a raise without asking for the promotion. Raises without promotion will eventually put you at the top of the pay-grade and you'll end up with very low raises if any at all. Been there, done that.


Good luck


Are normal raises now at 4% WOW! That's pretty darn good in zero inflation economics. Really!
 
Inflation was about 0% this year, so don't expect that nominal 4% inflation raise.
 
I would plant the seed early if you feel you have accomplished alot this year and clearly show the increase in responsibility with examples.

The % of raise depends on your current base, but I think a double digit raise without a "promotion" is difficult, so don't set yourself up for disappointment.

I feel one key element is what is market for your position, responsibility, and tenure? This can be a discussion point if you are extremely below market. Any outside recruiters contact you with positions with a base salary range 15 - 20% higher than what you are making?
 
I found another strategy that will sometimes allow you to earn a larger paycheck. Some companies will reward employees for suggestions that directly increase revenues or reduce expenses. Analyze your firm's line of business and see if you can think of any way they can improve a process or reduce costs. Making these types of suggestions can sometimes earn you bigger paychecks and put your name into conversations when promotional opportunities become available. Best of luck!
 
The reason why I hate year end reviews is that it's pretty much performance "theater". You could be a stellar contributor, grow the bottom line by double digits and basically the corporate honcho's come out with a "raise" and that's the max you will receive period. So you and your team t hink up this handy dandy new thingamabob, you patent it, get it to product and save the world, corporate says the raises are going to be between 1-3%, the max you're getting for saving the world is 3%

secondly the metric they use is usually rendered useless by the middle of the year, you start off working on one project and by years end for various reasons you will have worked on 3 other projects and can barely remember what you put on your project outlook report.

one of hte big reasons why we have young people who leave early even though we start off with a competitive salary.

We also have "ceilings" so now that I'm at the top of my salary chart, I can't get much of a jump without being promoted. I can't get promoted because the next level requires me to have a P.H.d which is so not going to happen. so back to my analogy above, even if I produce some thing that saves the world I won't get a big jump in salary due to being at the top tier of my paygrade.
 
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You don't indicate your role, which may provide more information to help us answer your question.

You should have at least one of the two of these, preferably both: a list of your impacts to the business (metrics based i.e. Sold x$, increased throughput/efficiency x% etc. (again, don't know your role)) and some competitive salary review information. I think you can get salary from glassdoor.com, but I haven't been there in years. "Feeling" like a 10% raise is competitive won't cut it.


Sent from my iPhone using Early Retirement Forum
 
I just went through something like this and used two things mentioned above effectively and one that wasn't mentioned:

1) Knowledge of what the market is for my position
2) Details on accomplishments and how I add value (adding value is key)
3) A willingness to leave if I didn't get it

The last one may be necessary if you are looking for a big jump. Going from a 3 to 6% raise might not need that, but a desire for a move from 3% to 20% might. That helped steel my resolve. I knew the risk and was willing to follow through. That comes through in the process one way or another.
 
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.
 
cathy63 said:
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.
Click to expand...

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.....
 
younginvestor2013 said:
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.....
Click to expand...

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.
 
cathy63 said:
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.
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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.:facepalm:
 
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.


Sent from my iPhone using Early Retirement Forum
 
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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