I have a very similar (yay, unions :rolleyes: ) requirement here. Only 10% of the people in your pay grade are (per negotiated contracts) allowed to be “exceptional” and receive “exceptional” raises (an extra few % above COLA).
The only way to really climb is to internally job-hop to different pay grades and levels, otherwise we are locked into the union pay-raise process.
FWIW, the managers hate it also, since they are unable to retain their key people with any pay incentives or bonuses.
Haaaa! I started out as a temp, worked myself to full time, taught myself (and took a few courses on) AutoCAD, selected the workstation and installed the software and plotter, and maintained said software and hardware because IT wouldn’t touch it, and for all my work, they offered me .35 cents more an hour!
I promptly started looking for another job and got myself a 50% increase in pay.
So there!
Read and understand Voyager and Beadalin’s posts - especially if you are at a larger company.
Another point is that the total pool for a manager may only be 4%. To give anyone a 6% raise, she has to give everyone else a less than 4% raise. This can really suck when you have a team that is really performing well and all deserves better than average increases. And, if you give the high paid person 6%, then life is really going to suck for the low level admin.
Raises outside of this 4% (or whatever your company establishes) gap happen with regrading jobs or doing market analysis for the job. So asking for one or both of these to be done is part of increasing pay.
Finallly, there is the walk option. More than once I handed someone less raise then they were happy with when I managed to get the “this sucks, I can make so much more somewhere else” speech. And my advice was always the same, “I’d miss you, but I’d be very happy for you if you found a job that can pay you more. This is what this firm can afford right now.”
low on caffeine at the moment, This was the tactic to push out someone who the company didn’t want around, or just something you’d say to good employees that voiced opinion about their raise? ie. if someone was unhappy with their raise last year, are they getting less this year again because they voiced their opinion?
I should say that my best story of a raise that was a slap in the face was when I was an hourly employee running a data processing department. They decided to “promote” me by giving me a manager title. Of course that came with a nominal 5% raise. However, it also made me exempt from overtime & I lost 50% of my NET income. Congratulations, eh?
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I can’t answer for Dangerosa, but for us there is no malice involved. Some people are seen as more valuable to the company than others. With a limited money pool you have to make the choice. You’d much rather see the middle person walk than the top person. We all have 3 options (and managers get rated the same way) - live with it, walk, or become more valuable.
This was a lot easier back in the days of very high inflation. If a 10% raise was average, there was a lot more money to move around, and it seemed that even mediocre performers were satisfied with 8% raises.
There is one thing those planning on moving should be aware of. There are two pay scales - the one for people already there, and the one used to entice new hires. We hired a lot of Ph.Ds, and for a long time the entry level salaries were going up a lot faster than the salaries of people already there. Thus, new Ph.Ds would come in with salaries higher than experienced Ph.Ds. Since the allocation was a percentage, these people got a lot in their allocation. Since they often hadn’t done anything worthy of a whopper, as my boss called a big raise, their allocations were given to other people. Departments who hired a lot thus started getting higher average salaries. Also, since CS PhDs were getting higher starting salaries than the Chemists, the average departmental salaries started to diverge.
I was on the committee looking at these issues for years, so I’ve seen all the subtleties. A lot of the things that seem unfair have good reasons supporting them.
Just before we imploded, we had a new system where you set goals for yourself at the beginning of the year, with difficulties, and were rated against those goals. There were no restrictions on what ratings people got, but salary was still a zero sum game. For instance, someone with a new baby might set low goals for himself, so there would be family time. At the end of the year he might wind up with an E, but with a very low raise, since he exceeded a very low bar.
We didn’t do this long enough to see how it really worked. Would people objecting the rating system be happy with Es and no raises?
Depends. In some cases we had middling performers who complained about their raise and were more of a pain in the back end than they were worth. If they left, I’d be happy for them and me.
But often, I’d have people performing fine, but who I couldn’t afford to pay any more than what I’d given them. I didn’t want them to be unhappy - both personally and professionally. If they can get more on the market, they should go out and get more on the market - better for them. There isn’t anything I can do about the centrally controlled pay percentage but allocate it out. Sucks for me if they leave, but I’d rather they be happy.
I haven’t managed in years and have discouraged my bosses from making that my career path.
ETA: Last years raise never figured into this years raise - nor did last years complaints about the raise. Each year I had a pool. Each year I allocated out that pool as fairly as I could.
Jeeze, not even a whole cent, eh? 
Unfortunately, changing jobs is how you are supposed to get raises these days. Keep those resumes tuned up, and don’t get too comfortable anywhere!
Yes, that’s the problem. Companies are stuck in thinking that there is “only so much money for raises” while they actually want as many of their employees to be high-performers as possible. And they can’t quite grasp the disconnect.
And if this is brought to their attention, they look perplexed and wonder “But, what can we do?” Well, they could recognize that performance can be budgeted for, instead of being allocated with no planning. I know who all the high performers in my company are; I also know who the low-performers are. It’s not 10% and 10%, but it is a number that could be planned for. They know every year who are going to be evaluated highly or poorly, well in advance. Budget for that number, not some arbitrary distribution.
Of course, I forgot a few little kickers with my own company. First off, past a certain pay grade, you don’t fall under the E/M/D classification – your raise is determined individually. This grade starts at “advisor” (technical fellow, basically) or manager level. So the people expected to explain how there is “only so much money for raises” do not actually get limited themselves in that regard. Nice for them.
Also: I work in the oil industry. No money for raises this year. Mm-hm.
Money for raises (and bonuses) is a lagging indicator. If a company was chock full of high performers they should be making a mint, and there should be money for raises aplenty. I’m assuming that the execs aren’t thieves. People are high performers out of skill, knowledge, good management, and being a good match for the job. I doubt any mediocre performer ever became a high performer from getting more money.
You are conflating raises with ratings. There is not a perfect match. We did what we called natural ranking - we started at the top, each manager suggested people who should be rated at that level, and we discussed it. Our boss had an excellent rule that after a certain amount of discussion about a bunch of people with no consensus, we’d bucket them together. We’d also note the difference between buckets. If we had artificial bands, we fit the buckets in there the best we could, but we gave raises based on the buckets.
I doubt very much you really know the high performers unless your company is very small. Do you really know the details of every person’s accomplishments? High performer is not equivalent to smart, by the way.
Does your company give standard raises based on classification at the lower levels? If so, I agree that this is stupid. We treated each person individually, and the money still came out of the budget. You can’t print money for raises, alas. Those people are divvying up a finite pot of money also.
That’s you get working for Satan. 
I bet the CEO got a raise - or did you somehow manage to lose money?
I don’t work for an oil company; I work in the oil industry. Our company makes oil additives, and is much smaller. Easy to enough know most everyone. Still making $ though – we sell to the oil companies, and with their demand so high right now we can’t make stuff fast enough for them.
Most of the “smart” ones actually aren’t high performers here, actually. They’re a bit too off in personality – arrogant, poor social skills, whatever. Management is usually at a loss as to what to do with the poor guys… they’re valuable in their niche, but lots of effort to deal with. But I’ve strayed way off topic, here.