June 30, 2010, 7:18 am

What is Your Income Raise This Year?

by: The Financial Blogger    Category: Career
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Last week, I wrote that I won’t be complaining about my very very very (did I say very?) low salary increase. This time around I am not complaining because I went on a crusade last year and got 3 income raises in the span of 12 months. As an insurance company does after a claim, my employer is trying to recover and was quite cheap this year. I guess they call it “compensation process” at the evil HR department ;-).

I know that my manager is fighting for me to get a higher salary considering my performance and the growth of my portfolio. So since you can’t always complain and I already know that someone is “working for me”; I won’t do or say a thing this year.

How much are you getting this year?

I’m curious to know how much you will receive this year? 1%? 3%? 5%? What is a decent income raise anyways? And by decent, I am not asking the question just from an employee point of view but also as an employer. How much can you successfully give to your employees and maintain a normal level of growth and profit? If you give too much one year, the next may bring a lot of disappointment among your crew. Is this better?

If you want a secret; employees will never be satisfied by the salary increase anyways ;-). Give them 4% they will ask for 5% next year. Give them a steady 3%, they will complaint that they always receive the same thing (taking the raise for granted).

I have seen a new management wave in the industry. Some companies are not talking about raises anymore. They are talking about your level of competency and performance in line with their salary bracket. They don’t give you a raise anymore, they reposition you in the salary bracket. And this is how I won my point last year; nobody had a small book, a master’s degree and the results that I had. Therefore, they had to reposition me in the salary bracket ;-).

You need to see yourself as a small incorporation

If you see yourself as an employee, you will be asking for a raise and complain about how small it is. However, if you consider yourself as a small company working for a bigger one, you will be able to build your case and show which kind of advantages your employer has when he requires your help to outsource a part of its business. If you are profitable for your employer, then perhaps you deserve a part of the cake. If you are just a big cost center, don’t talk too loud ;-).

If you are looking for a raise; you can always move to China 😉

The Chinese workers should get an increase of 15% on average for this year. In fact,  this is about the average increase for the past 5-6 years in China. However, the average income is…. Drum roll…. $0.75/hr 😉

So it is quite normal that international companies don’t worry about giving an additional $0.20/hr to their workers since they won’t even make $1/hr…

Where I am at since I didn’t ask for anything…

Well… I didn’t get much! But I am still waiting as I know that some “changes” are in the air. I still think that I am better off shutting my mouth for now 😉 I’ll keep you posted!

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Comments

I’m in a different situation regarding pay increases so won’t speak about that. What I would say is that I would think that employers would need to locate their “key individuals” and offer them higher increases year after year… doing that, they avoid losing them to a competitor after a few years once that worker is “underpaid”. As for the rest, those you can replace more easily, I would stay near inflation…

I consider myself very lucky as I was able to get 4%. For some years I would be up unhappy but in a context of high unemployment and a poor economy, any raise at all is good!

by: The Financial Blogger | June 30th, 2010 (9:33 am)

@IS,

I definitely agree with you. Too often, employers try to save on their key employees and wait until they get an offer from a competitors.

Unfortunately, most employers wait until they see their key employees leave to make them an offer….

At our company, pay increase is meant to follow inflation so it’s not much. I got 1.5%. However personal performance can impact it upward slightly. Promotion to higher grade is where the big pay raise is and there is a clear and defined path that can be taken by mostly anyone in the office. There are cases where a salary adjustment is made to ensure the salary is competitive with the industry similar to the bracket you mention. And then there is a bonus given yearly which also has a performance factor in the number.

This year I got 3% at our company, nothing to complain about in light of the economic situation. But not enough if you consider yourself underpaid in your job!

@ Mich,

I guess this is another problem; all employees think they are underpaid 😉

I’m getting no raise this year and a 5% pay cut for 24 months due to budget cuts. 🙁

Good point about the Chinese wage increase!

I was able to secure a good raise this year. But, that was by foresaking a 50% raise to move somewhere else!

I have never thought of myself as a small company working inside my current employer but I think I will from now on. It is a nice perspective. As far as raises go we don’t get any (or so I am told) but company wide we get a bonus that is pegged to company performance. The taxman takes away a large chunk of this though! I would love to have a job where the pay scale is laid out for you so you can use it as an objective, ie sell so many units, take industry training, more schooling etc.

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