I want a raise.
Of course I want a raise. Sadly, I am retired and no one pays me to write this blog. But the natural reaction for many people during any change in business is to expect some kind of pay increase. I mean, I came to work nearly all of last year. The company or organization seems to be doing better. Where is my cut?
Where to begin?
As someone who has been a manager over the years, I have faced this same issue when approached by those who worked directly for me. Companies want to attract and maintain good talent and pay is certainly one of the largest factors involved in this process. Note to anyone who is seeking more money” don’t forget that your worth is actually compensated for with a wide array of benefits including time off. This article focuses mainly on the “financial compensation” part of the bubble.
Mercer’s Outlook Offers Average Raise for a Promotion
“According to Mercer’s “2019/2020 US Compensation Planning Survey, the average merit increase budgets for 2019 and projections for 2020 are consistent with the past five years, at 2.9% for 2019 and 3.0% for 2020. According to Mercer, “All employee groups saw a year-over-year promotional increase, with average promotion salary increases (as a percent of base) at 9.3%, ranging from 8.3% (Support) to 11.1% (Executive).
However, while the promotional budget amount has slightly decreased, the average promotion salary increase received by an individual has increased by 1.5.”
These projections are the average increase that employees can expect in 2019 and 2020. They are not the percentage of increase that employees can expect across the board. Even when employees do similar work, employers are increasingly differentiating pay based on performance.”
Wait a minute. Pay for performance?
Yes, pay for performance. In an increasingly complex world of competitiveness, employees who perform at a higher level of efficiency and effectiveness are being paid more money. They are also seeing faster tracks for advancement. Even the government is facing challenges in the face of rising costs in the benefits that are typically offered along with compensation. Many organizations are measuring the long term “legacy” costs and in some cases making the decision to outsource work and tasks that can be better managed by organizations that are designed to drive waste and inefficiency out of the process.
Four Basic Rules
Rule number one: You don’t deserve a raise just because you showed up.
Rule number two: Everyone thinks they deserve a raise. Not everyone does.
Rule number three: It is still largely up to the individual to demonstrate why they deserve a raise. Self-promotion based on actual achievements is critical to success.
Rule number four: the same government that promises you fifteen dollars an hour can limit you to fifteen dollars an hour regardless of rules one through three.
Why do some employees make more than others for similar work?
They regularly receive pay raises and salary increases. Four different employment issues primarily drive this fact about salary increases. Pay raises are dependent upon:
- the industry you are employed in,
- the job market and market-based pay for your job in your region of the country,
- the pay practices and philosophy of your organization, and
- your performance on your job.
Increasingly, differentiating salary increases by employee performance is the norm. High performing, superior employees can expect to receive as much as 4.5% to 5% and, in some cases, up to 10% based on their performance.
According to Kiplinger:
“A lot of companies are making the process more about feedback than about performance rankings. That means there’s a real opportunity to sit down with a manager and make sure there’s a mutual understanding: What’s really expected of me, how will I be measured, and how will that impact my pay?”
What should I do as an employee?
I offer a balanced scorecard approach based on a number of factors. That scorecard includes nominal worth, continuous improvement worth, problem solving worth and “whatever it takes” worth.
These four areas are all connected and show a complete picture of the justifications behind why people deserve increases in their salary or benefits compensation. In areas where benefits are negotiated at a group level, this is one thing that is harder to factor into the overall package. However, even in represented groups, the benefits that have been negotiated cannot be ignored in the overall view of compensation.
Numbers and data are everything. You probably have some kind of job description and title. If not, you are already in trouble. How is your work measured? How do you know when you have met or exceeded the minimum expectation?
The tricky part is coming up with real numbers. You can benchmark against similar organizations and try to determine net value. This requires some homework. But with the internet and the volumes of data required by various federal agencies, there is data available. One of my favorite resources is the Occupational Outlook Handbook published by the Department of Labor. This comprehensive on line resources list annually updated information every year nearly every major job classification in America.
Tip: With this in mind, if you are disappointed about the amount of your salary increase, the most important question, you need to ask your manager is the following. “What can I improve about my performance and contribution so that I am eligible for the highest pay raise in the future?”
Continuous Improvement Worth
What are you offering every day to help improve the organization? There is waste and inefficiency in every organization. Learning how to identify that waste and help to decrease the impact of waste is something that can be done by any employee. In fact, the most efficient organizations in the world thrive on employee involvement. This requires the employee to understand their work at a higher level and seek opportunities to improve their output and their contributions. It is just an excuse to say that work rules are the main hindrance to continuous improvement. Begin each day with an attitude of continuous improvement and build up the wins during the time frame between evaluations.
Problem Solving Worth
Every organization exists because a problem or need was identified. It is often said that you are either part of the problem or part of the solution. Nothing could me more true. What skills and abilities do you have to become a problem solver? There are standard problem solving processes that are taught in every major manufacturing and service industry. Nothing prevents anyone from learning about these processes and helping to implement them they work. This shows a concern for the organization’s strength and differentiates the individual from those who do not take the time or care to help address these problems.
I have never yet recommended a pay raise for someone who chooses to be a victim of their circumstances. But I will fight like a wildcat for the people who put effort into actually solving problems.
“Whatever it takes” attitude
This one is hard to quantify. But I can give examples of what it means.
Whatever it takes is where self is sacrificed for the good of the team. This is the person who routinely shows up early and stays late with no complaints. Not just to manage the clock, but to achieve real goals and solve real problems. They go the extra mile to develop their individual skills in night classes, seminars, volunteer work and other opportunities to develop their skills. The world is a classroom. This individual sees learning as one of the most important things they can do to aid the organization and ultimately themselves.
This person finds the way to stay focused on the organization’s mission, vision and values in everything they do. Rather than tear down the organization, they find ways to strengthen it. The secret to life is that not all organizations are perfect. All need help in reaching a higher plain. But the only way that happens is when the organization is filled with warriors who stop at nothing to help it become the place we all want to work. They are willing to do “Whatever it takes!”
The proudest civilian award I ever received was from Raytheon. My team was given an impossible task that needed to be achieved in an unreasonable amount of time. We were undermanned, underfunded, facing enormous obstacles and the embarrassing future that would be marked by failure.
On the day we got the direction, I gathered them into a small room. We faced the problem head on. No sugar coating. No excuses. And most important of all, no whining about our bad luck.
The team developed an aggressive action plan. We all knew that it would take a lot of sacrifice and effort. All of our lives were put on hold for the time we felt we needed. Each day we measured our progress. Each day we fought every obstacle. And in the end, we achieved the impossible slightly ahead of schedule and with no flaws.
The day my boss came down from Detroit was one of the most satisfying days of my life. He brought with him a packet filled with little plastic pins. On the pins were written the words “Whatever it takes”. He also brought some bonus checks that went along with those pins. But to this day, I know for a fact that all of my team members valued that pin just as much.
If you are expecting a raise because you have outlasted everyone else, you better hope that outlasting everyone else is one of your key objectives. As far as I know, that really only happens on game shows.
If you follow the path of performance improvement that is outlined here, you will have a better reason to expect that raise. Here is the real motivation however. If you do all these things and the company or organization is still struggling with how to pay you correctly, you will be an awesome candidate for the next job you seek. The truth is that I have hired many people from others precisely because they understood that they were making themselves a more attractive candidate.
I have used that method a few times in my career and in every case got the raise I felt I had worked for.