How do raises work where you work?

I work at a university.  Every year, the university decides what % raises each department will be able to give on average (usually ranging from 0% to 3%).  The department decides whether or not to top up.  Sometime in the summer raises are determined (initially we all got COL raises that exactly matched inflation, then we got 0 raises because recession, now there’s a seriously awful “merit” formula that makes no sense).  In any case, raises are determined at exactly the same time each year and we know when to expect them.  We don’t have to talk to anybody to get them, they just happen.  (Though complaining about equity at step increases such as promotions might help.)

We can get out of cycle raises by getting outside job offers.

My DH is working a real job right now.  We have no idea how raises are supposed to work.  He was going to ask at his annual review, but unfortunately his annual review got cut short (to about 10 min) because there were delays and it got pushed up right to his flight time.

He doesn’t know, is he supposed to ask?  Is he supposed to make a case?  Is there an automatic COL increase?  Does he only get raises when there’s an outside offer?  We don’t know.  So he’s asking.  He doesn’t want to ask, but he will at some point because without cost-of-living increases, one’s real salary erodes.  (Plus the company is doing well, partly because of his efforts!)

In the mean time, that got me curious, how does it work most places?

How does it work for our readers?  Are raises automatic?  Are they tied to something?  Do you have to ask about them?  Do they happen annually?

How do you get your raises?

 

55 Responses to “How do raises work where you work?”

  1. L Says:

    I have worked for 17+ years for a very small (35 people) family-owned printing business. That sector got hammered in the Great Recession, and before that was not doing especially well (we lost a large customer due to their being bought out) and we are still in a cash crunch and struggle to stay viable. The company has not given anyone a raise in 10 years. BUT my employer has always, and continues, to cover an employee’s health insurance 100 percent. Spouses and children get a reduced rate. I consider that has been the substance of our raises for 10 years. Yes I’d like to see my (generous 10 years ago) hourly pay increase. But given the choice between no raise and unemployment, I’ll take what I’ve got and be grateful.

  2. ralucacoldea Says:

    I would say that he needs to ask. And an annual review that is 10 minutes long is not an annual review, it’s a water cooler break.
    Also, he could ask his colleagues. Not necessarily about money, mind you, but about the process.

    • nicoleandmaggie Says:

      How is it done where you work?

      • ralucacoldea Says:

        I’m lucky enough that the performance process is discussed when you get hired – you when it’s going to take place (every 6 months, every year, etc). A raise is not guaranteed, but at least it’s always implied that you will get one after a year. If you’re not getting one, the manager will usually explain why not. If he does not, than I would ask what’s wrong. If you get a “good job” but no raise then something, somewhere is monstrously wrong :).

  3. Comradde PhysioProffe Says:

    At my medical school, it’s pretty much like you describe in your post, although promotion bumps are also relatively standardized. What is a pain in the f*cken asse is that there seems to be an “equity” deal that is based not on merit but on seniority. So because we have some very senior faculty they don’t want to give raises to, it suppresses the salaries of faculty that are less senior than them.

    • nicoleandmaggie Says:

      Equity is the only way my salary ever gets bumped up to what the guys are making. Even though I am as good or better.

      • Comradde PhysioProffe Says:

        Yes, that is the upside of equity. The downside is now you can’t accelerate past others, even though you are better. I am currently on the “can’t accelerate past them”, even though I am demonstrably better on all objectively quantifiable metrics: publications, grants, quantity and quality of service.

      • nicoleandmaggie Says:

        Equity sure sucks for white guys! Thank goodness you guys are so good at getting those outside offers and rarely get penalized for being on the market.

  4. Leah Says:

    My school is similar. We get a contract each year in the spring, and that usually has a COL raise. Sometimes, they do an evaluation and find that your experience level/position is better compensated at sister schools, and then you get a bigger bump. I suppose one could negotiate pay then (I did when I was hired), but I don’t know if anyone does. I’m going to use my contract time to negotiate my service commitments.

  5. One Million In 7 Says:

    In the private sector, increases haven’t been a sure thing for at least 10 years now. By getting 0%, we’ve been taking pay cuts every year (because COL is rising, albeit slowly), increasing the pay inequity gap more and more. Annual reviews have become mostly about personal performance management, with salary increases denied and idle promises pushed out to “maybe next year”.

  6. Holly@ClubThrifty Says:

    At my old 9-5 job, we all got raises at the end of the year. We always got the same raise – 3%. It didn’t matter whether you did awesome or sucked all year.
    Greg’s new job didn’t say anything about raises this year and they don’t do annual reviews. When he got his first paycheck of this year, we noticed he got a 4% raise. I think that’s really weird that they gave him a raise but didn’t tell him.

    • nicoleandmaggie Says:

      That’s not a bad raise, especially if he gets it annually! That is weird that they didn’t mention it to him. We get a contract every year in our mailboxes, usually (but not always) before our first paycheck.

  7. j Says:

    At a previous institution (prestigious although not first tier SLAC) there was a basic COL increase (which was usually about 1.5% or so) plus a horrible method of merit raise on top of that involving every other faculty member in your department evaluating your worth every year or every other year. It took an enormous amount of time, and there was a system of points, and some departments were generous with points knowing the college level committee would bump people down, and some were less generous with points. In the end all of that time and effort was spent over another measly portion of a raise, usually amounting to about $25 a month. (Yes, it would build up over time, but it sucked.) There was also a career review that tended to coincide with promotions (which did not automatically have a raise), but that could be triggered if for some reason it didn’t, and raises were usually incredibly generous then (up to 10% of salary). This school has salaries in the top 5% of colleges, so aside from the horribleness of the process, and a 4 year freeze around the recession, I wasn’t that bothered about the actual amounts.

    I’m now at a tuition driven, completely unprestigious school that never froze the COL increases; they automatically happen and range from 2-3% historically. There is a minuscule raise at promotion time (<2%), so the only raises outside COL happen at two points and there is no other opportunity to get a raise based on merit or accomplishment. I think it would be possible with an outside offer to try to negotiate a raise, but since there is so little likelihood of getting an outside offer from the position of being at this school, that is a non-starter. The salaries here are in the bottom 10%, too. Then again, at least this school looks like it might survive the downturn in college students given how close to the bone it operates – we'll have to see how we fare versus the many local competitors (who so far look to be faring worse).

  8. Linda Says:

    Where I work (a big consulting company) salary increases can come through both incremental raises and bonuses. There is a salary pool for your team/group that the partners are given, along with guidelines on how to distribute it based on performance ratings and level/position. Generally, the lower your level/position the more heavily your salary changes are based on the annual incremental raises; if you’re in a higher level position, you will still get an incremental raise, but it is often at the lower end of the distribution guidelines because you’re expected to be trying to work towards a bigger annual bonus.

    I confess that I don’t pay much attention to the spiel I get about the ranges for raises each year. Theoretically they vary each year based on how well the organization’s revenues have been; in tighter times we were seeing smaller ranges for raises. These days it seems pretty rare for me to get more than a 3% increase because I’m at a higher level now and more likely to see a bigger bonus rate if I play my cards right. Last year’s bonus was only 4%, but I’ve gotten ones as high as 8%. I’ve even had years where I received one time salary adjustments to bring me more at level with the peers (or so I’ve been told).

    My group doesn’t directly contribute to the bottom line, however, so our guidelines aren’t as generous as those groups that do. (I don’t know what those other groups get, though this is a common understanding within our organization.) If your DH is engaged in work that does have a direct impact on success factors (increased revenues or whatever the organization considers success) then he should be compensated accordingly. He should go into his review with his documentation of how he has met (and hopefully exceeded) the goals and objectives for his position and be willing to push for his increase. His review should be at least 40 minutes, and it’s OK for him to ask about how the process works. In fact they should be transparent about how they rate performance and determine merit increases and bonuses.

  9. Rented life Says:

    The one company I’ve been with (1.5 years) I haven’t had a review or a raise. My boss got a raiser (15%) after demanding one for herself due to the hellish conditions she was working under. I just say no to shitty conditions.

    My husbands company does annual reviews and had a few reviews in between. )this largely depends on your performance. If you’re doing well or suck you’ll get more reviews.) You get a raise of you move up whih you any negotiate. You get a rise at your review which you can negotiate but within a certain tangle (that barely covers cost of living). Most “raises” are 3-5%.

  10. MutantSupermodel Says:

    I work at a University as well and it’s mostly like yours except that I am not sure how the percentages are figured out but I think the departments and divisions have a lot of say. My old division was supposedly famously stingy but my new department is supposedly pretty generous. We shall see.

    In my old private sector job, it was pretty much standard raises from 1% to 3% depending on performance.

    I think that your hubby should request a redo of his review and in that meeting bring up everything he’s accomplished and ask for a raise. At that point they’ll usually explain the process and that if there’s a way to get above the standard raises, they’ll lay it out in the review and in his goals for the next year.

    I have been told that this is something you should really iron out during the hiring process but I am way too timid for that.

  11. Cloud Says:

    Every place I have ever worked- from the tiny biotech to the big contracting firm- has had an annual raise period. It is usually timed to coincide with annual reviews, but one place I worked used annual reviews for bonuses only and had a separate raise and promotion period offset by 6 months. Regardless, this should all be transparent to the employees- i.e., they should know when to expect raises, what the policy on COLAs is, etc. So your husband is well within the norms to be asking what his current company does. It should have been told to him on his first day or soon thereafter!

    At every place except my last job, my first raise was quite large. I put this down to the fact that I don’t tend to negotiate hard on salary when I’m being hired (there is evidence to indicate that this is reasonable behavior for a woman, but to be honest I just suck at salary negotiations and hate them so if the salary was at least matching my prior salary, I couldn’t be bothered to push hard). Then my new boss would realize that I was quite good at my job and give me a raise to make it harder for someone else to poach me. My last company was stingier about raises overall (I didn’t get anything except a COLA during my 3 year tenure) and I suspect my last boss was doing the work equivalent of negging to me. If he was, and if he was doing it on purpose (both debatable) it backfired massively because once I realized the job was eating away at my hard won self-confidence, I decided to quit.

  12. Jackie Says:

    I am wondering how you figure out what equity is among colleagues and then how do you go about asking for more if you are not on par? Also I hear about step increases but not sure my department regularly does them. Should I just ask about these things? But I am in a department that seems tight lipped and confused about these things. What to do? Thanks!

    • nicoleandmaggie Says:

      At state schools everything is available either online or in hard copy at the library. Private schools are much more opaque, and I guess you would talk to your chair or dean, though I’m not sure how that conversation would go without you already having some data points of other people’s salaries.

  13. middle class Says:

    We get annual reviews at my job. Since the recession, raises have been around 1%-3% depending on performance. I believe we also had a salary freeze one year. I usually try to make a case for a larger salary before the annual evaluations. This has resulted in one-time bonuses, although they still did not budge on giving me a permanent increase. I figure I have nothing to lose by asking (in writing first, then a meeting if needed). Last year, I had to pay about $500 more in medical premiums but was able to get $500 one-time bonus to cover it.

  14. First Gen American Says:

    I work for a $50B company so most of the HR stuff is pretty well defined. Raises are given on an annual basis. Each manager is given a pool of money based on COL and they divy it up based on performance, so if the amount is 3%, a top performer will get more which leaves a lower raise for the mediocre.

    Raises are also based on where you are on the pay scale. If you are an equal performer with someone who makes less than you for doing the same job, the lower paid person will get more of an increase to close the gap on pay disparity.

    This year they are implementing profit sharing so there is no normal pay increase but everyone will get a bonus if the company meets their mnumbers, where in the past it was only the salespeople and executives that had that as a benefit.

    Another big company I worked for changed times between raises from 12 to 14 months but it was still communicated well in advance and no raise years were known months in advance of not getting them.

    I think it is fair to request a general benefits discussion from HR or whomever, when vacation changes, pay increases, training opportunities, healthcare benefits like gym reimbursements, etc…. That stuff should have been covered when he was hired.

    Most bigger companies have benefits handbooks. Maybe a more innocuous request is to ask if there is a benefits handbook that he can have a copy of.

    • nicoleandmaggie Says:

      There isn’t… it’s a small company and so far every question DH has asked has been met with, “That’s a good question, we should really put a policy into place.” (For example, annual reviews didn’t happen until DH asked about them when he was hired!) There’s a been lot of stuff going on even just this past year.

  15. Debbie M Says:

    At my school, it was basically the same as yours except it started with the Legislature, so one way to get a raise was to join a union and get them to talk the Legislature into not excluding university staff from mandated state raises. Then the university and departments could top that amount. “Merit” either means the bigwigs get all the money or sometimes it was actually based at least partly on merit or some supervisors made them the same for everyone regardless of merit. There was a LOT of lying about what wasn’t possible. For example, one year I got the 3% raise plus an additional 3% “added duties” raise (when I was doing two people’s jobs for eight months). And they would tell us they could only afford X on average but then actually average X* 1.5 so that we all felt special. The best way for staff to get a raise was to get a new job or at least a new job title.

    At some places, we got a certain raise every year based on experience (e.g., summer camp). At other places, I only got a raise when the minimum wage increased (Kmart). At some retail places, you might get a raise when you get new duties, or you might just get a new title. So you could be an assistant manager and be making maybe $1/hour more than minimum wage. In 1986, one of my friends worked at a place where everyone got raises of 6 – 8%, so if you only got a 6% raise that was an insult.

    At most places they at least pretend that raises are tied to annual reviews. I wish companies would say that if there is no profit, there is no raise, and if there is a profit, raises are based on annual reviews. Because when there’s no profit, they make the annual reviews artificially terrible to justify no raises.

    I would say most places give raises once a year, usually at the same time, but sometimes different times for different people based on when they started. Some places also have bonuses and stock options.

    You can ask about raises when they make you the offer. Once you’re hired, you should look for a mentor or two and ask them questions like this. You might also be able to ask someone in HR.

  16. Mrs PoP Says:

    Mr PoP works for a big company and has regular formal reviews with his managers and a bigger annual one where he finds out his raise, unless he is switching to another position in which case he finds out when he gets the paperwork on that offer. Up until this year his raises have been in name only since they really only affect his base and such a huge percentage of his comp was commission. But this last one was much more meaningful since he moved out of a commission role for the next couple of years.
    My job is much less standardized. We get bonuses a couple times per year, which get progressively bigger (basically amounting to a COL raise) and then every 2-3 years I’ve gotten a sizable base salary bump (the second time this happened I had a job offer from another firm). We have no formal review process. Most of us in my specific branch of the company are direct reports to the owner of the company, so I presume he’d just fire us if he thought we were doing a bad job.

  17. Leigh Says:

    I’ve only worked at big companies and raises only happen at annual review time. In the 2014 review season, I did not get a raise because my manager wrote my review basically indicating that I was the worst possible employee you could ever hire. I switched groups to an awesome new team that I loved with a great manager just before reviews came out. Part of why I ended up leaving the company was that I went through a handful of managers in 2014 and the second one had it in for me, which just killed any interest in continuing to work for the company. I’m hopeful that my new company will be better, but if not, I guess I’ll be finding myself a new career path. I’m so thankful that my savings also allowed me to take a good chunk of time off between jobs to help recuperate from the crap that is the tech industry as a woman.

    It sounds like your husband works at a small company. Raises and reviews don’t seem to have much in the way of policies at small companies. A friend who works at a small company gets a random raise every few months, which seems pretty fun to me. But she never asks for them, they just get given to her.

    • nicoleandmaggie Says:

      My sister hit that situation with the crappy manager. She’s much happier in her new position, but she didn’t end up leaving that company.

      If DH were getting unasked for raises every few months, we wouldn’t be complaining!

      • Leigh Says:

        I’m glad she found a new position at the same company! That sure makes things easier. It just unfortunately did not work out for me.

      • nicoleandmaggie Says:

        I’m not sure why she doesn’t move. She did apply to a few things but her heart wasn’t really in it. She’s still young enough she could change industries completely.

      • Leigh Says:

        Moving is a lot of work unless you’re lucky. It took me months of applying to jobs and interviewing and then repeating that with more companies to get a new job lined up. It was a pretty disheartening process. There is also sometimes a limited selection of companies within your city and I wasn’t willing to move cities. I kept finding cool sounding places in other cities, but not in mine, sigh. It’s also really hard to get excited about possible new jobs if you like your current one or if you don’t since then it is making you depressed.

  18. Phindustry Says:

    I work for a very very large biotech company in mid-level leadership/scingineering. In my yearly review we get a few numbers:

    1. Our yearly raise (3-6%). 0% is never an option for US-based employees.
    2. Progress to promotion (8-16% raise on top of the 3-6% if this is the year for the promotion)
    2.5. Multiplier percentage (this applies to the yearly…still don’t know where they come up with the number….usually company performance based)
    3. Performance bonus percentage (depends on level…but usually around 8-25%)
    4. IP bonus sum (in dollar amount)

    This happens yearly with the occasional mid-year awards for whatever corporate crap comes up.

    • nicoleandmaggie Says:

      That sounds very nice! At least my DH gets to telecommute…

      • Phindustry Says:

        Telecommuting’s actually a big thing. I work in a lab-heavy environment, and can’t work from elsewhere….and living in a major metro means commute costs are quite high.

        Regarding the actual numbers, I thought this was typical for large biotech companies (my only other ‘real’ jobs have been in national labs), but I guess I’m wrong. More companies need to offer these kind of monetary perks (or replace them with vacation, telecommuting, etc. perks) if you want to recruit and maintain the best talent. No one wants to leave my group (except me :)) because it’s insanely fun but also the most lucrative. I’ve noticed often that just a conversation is enough to get the numbers you want. These are also the numbers for someone in front-end research and development. I’m not sure how the numbers vary if you’re in preclinical, sales, manufacturing, etc.

  19. Dame Eleanor Hull Says:

    COL raise? Never. We only have merit, and I don’t think we’ve had a merit raise in at least 5 years. Everybody’s getting grumpy about it, too. Why do we do annual merit review when it doesn’t do anyone any good?

  20. chacha1 Says:

    My company pretends that annual raises are tied to performance reviews. I don’t buy it. I’ve been getting stellar reviews and my raises have been < COL. Meanwhile the fat cat lawyers have been issuing press releases about "record years" for several years now. There is a lot of rage.

  21. SP Says:

    My past is similar to yours (very large and a smaller but established company). There is an automatic annual review & raise cycle. The raises are tied to your rating in the review, but they come a few months later. Raises depend on your rating (merit raise) and how the company did last year / COL. It is probably more political behind the scenes. An “average” raise is determined up high, and at some point (departmental level first, then managers second?) the salary increase bucket is given to a person to distribute such that “high performers” get more money. I think these were roughly 1 – 9% in general. They try to be transparent about this process. They had expectations for each rating and each level. They tried to make it “metric” driven, but that is very hard to do outside of certain role types.

    At one company, they started forcing a distribution on the rankings so a certain number of people had to be ranked lower and higher. They called it “differentiation”. It’s a Jack Welsh philosophy, but they adopted it really sloppily. I’m sure it was discussed on high a lot, but on the front line, it was sudden and very poorly communicated. Front line managers got the brunt of it.

    We could also get promotions out of cycle (from engineer 1 to engineer 2, etc), which came with a separate raise, 10%+. Possibly more as you go higher. I was never given an opportunity to negotiate the raises, but probably could have tried. They intentionally don’t give you an opening. Your opportunity to influence is during the review cycle.

    Ideally, they would have made the processes transparent from the get go, but it sounds like the process is ad hoc. (I imagine these ad hoc processes mean that only people who ask/push issue get raises, I wonder what that does for equity?)

    I’d like to hear how this goes for your DH. Is he asking for a raise, or asking how it works? I’d assume he should make a case for it. I would hope they wouldn’t insist people get outside offers. Is that an academia thing? I know it happens in industry, but I don’t see it as being incredibly common.

    • nicoleandmaggie Says:

      One of our friends had that ranking thing imposed, with the bottom X% automatically fired(!)… what end up happening was that everybody there left for other companies no matter what their ranking. They lost so much talent. Our friend stuck it out and the inevitable change in management and they were able to get back on track, but the company was pretty shaky there for a while.

      Right now they’re running behind on their product deadline so DH thinks it’s not the best time to discuss raises. He was going to do it in person at the last meeting, but unfortunately the prototype completely broke down while they were there forcing all hands on deck to get it back in working order while time ran out.

      The outside offer thing is pretty common in academia when there are set raises (or no raises) that are out of step with salaries of new hires (wage compression).

  22. Beth Says:

    I work at unnamed R1 university as (non-teaching) staff, and all of us are on one-year appointments. At our annual performance review, if you get above 3 out of 5 on most of your metrics, you *might* be eligible for a raise. Then if you do get a merit raise, at a separate time closer to contract renewal, they send you a separate 1:1 meeting request with your supervisor to tell you you got a raise of x% (anywhere from 3-7, generally unless it’s a promotion). Then you sign your new contract for the next fiscal year. None of us have ever gotten a COL raise, ever. And whether you get a raise depends anyway – they are trying to be more equitable (or so they say…) so, for instance, some of us have been outright told by our supervisors that if you got a merit raise one year you are ineligible for another until another year has passed – no back to back raises, but that’s not in writing anywhere. Anyway, for what it’s worth that’s how it works here.

  23. Maria Says:

    I’ve gotten ONE raise in the 5 years I’ve worked with my company. It was a 10% increase. The company does really well- profit increases every year!

    Working at unionized, structured companies are better (I work at a small, private company) – they have performance reviews every year and for some, raise percentages are set and expected every year.


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