This is something I’ve wondered about for a long time- what is a good raise percentage?
Specifically, what’s a good percentage for people who get good but not stellar reviews? Like on a A-F grading scale, what’s a good percentage for someone making a B+?
I wonder because it seems like this is really hard to figure. Some public employers give 3-5% raises as standard, but sometimes freeze raises for years on end, making the average lower. Some private places give 1-3% raises like clockwork, and others do a more all or nothing approach, with some people getting 5-10% raises, and others getting nothing.
IMO 10% would be the starting point for a raise that really made a noticeable difference. A 1-3% increase is only about $10 difference a week, or less, for many people.
1,000,000% is definitely a good percentage raise assuming you make more than $0. 0% and under are bad percentage raises. Everything in between is open to the circumstances. Every job will be different. If a business isn’t doing well any raise is good, in bad enough times employees will get pay cuts no matter how well they perform. How well you do compared to other employees in the same business and relative to their reviews is the only useful way to evaluate this.
Sometimes (every time?) it’s a budgetary issue; we’ve budgeted, say $5,000,000 for additional payroll (raises) across the board, and we need to allocate that among, say, 25,000 employees. The stars should, obviously, get more money than those who are just coasting. And the ones in between should get something in the middle.
BTW, I reported the thread for move, since there’s clearly no factual answer.
It also depends on the nature of the job market for the industry in question. In a highly-competitive market where employers are snapping up workers left and right, companies have a stronger incentive to increase salaries as one means of retaining workers who are solid performers. In depressed job markets, there’s less incentive to offer raises since the workers are less likely to “find a better deal elsewhere.”
Pay for the worker should depend on the worker’s productivity. For example, if I hire someone at $10/hr, and I have $10/hr overhead (taxes, insurance, etc); then this worker is only producing $20/hr, I’m not seeing any profit so there’s no point for me to hire them. Whereas if the worker is producing $30/hr, then they get their $10, I get my $10 and $10 for overhead … everyone’s happy.
However, if my worker is producing $45/hr … then he should get the $15/hr they rightfully deserve.
While I don’t completely disagree with you, if the OP is talking about normal, yearly merit increases (or whatever your company calls them), getting 10% is VERY unusual. A 10%+ raise is much more common for those getting a performance bump, or a new role, or a market adjustment, or something like that.
For the annual merit increase, I would subjectively rate it as follows:
And when they try, they lower everyone’s productivity by making every employee document every thing all the time, so that employees spend more time documenting and attending meetings than actually working.
Ask me how I know.
The only answer that works is good managers/team leads/whatever you want to call them immediately above the productive workers. Good managers know who’s doing their work or not.
Those who say “it depends on inflation” have it almost right. What is of more interest to employers is projected budgeted wage/salary increases of their competitors. Sometimes an employer will use the Employer Cost Index, but most larger employers use surveys of projected increases. Such surveys have been running to be about 3% for 2016. They have run between 2% and 3% for the past several years. Back in the late 1970’s salary increases ran 8-10%.
This can be different for different geographic areas, industries and job families. I remember in the late 70’s doing a project covering workers on oil rigs. One company executive told me that wages for these workers were going up 1 1/2 to 2% per month. Back then too sometimes information technology (we called it data processing in those days) workers were averaging more like 10-15% increases since the demand so greatly exceeded the supply.
In general, in 2016 I’d call an increase of 2-4% to be about average. Anything over 4% is very good; anything under 2% is pretty poor.
Bear in mind though that in most organizations job performance plays a role in determining an individual’s increase. Sometimes (particularly in larger organizations) where the employee’s salary fits into the official salary range for the job matters too. In general, the lower part of the range is targeted as appropriate for employees without a lot of experience and under-performers, the middle is for fully competent employees, and the top part of the range for the exemplary workers. So an average performer at the bottom of the range may get a 5% increase, while an average performer neer the top of the range may get only 1%.
You’re not working for me if you think you deserve $15/hr more. I gave you that job, I took the risks starting and building the business. You’ll get a raise, but the profits are mine to use as I see fit.
Even inflation is not a suitable measure for all businesses, if they don’t have the money paying you more won’t help. It is a good measure of when to look for a new job though.
Working for the government if you get 1% in a single year it’s pretty good. Some of my coworkers waited 7 years and finally got a 3% raise.
At one job I got a 50% raise but that was because my role changed dramatically. I was hired as an inventory clerk but got moved over to full-time IT support. Not bad for 3 months of work.
My old company was very much a case by case basis on merit based raises. If you were star, you might get 5% - 6%. If you sucked, you’d get 0%. My current employer is much more uniform in their raises. Unless you really foul it up, you’re getting 2.5% - 3%. That’s the range. They acknowledge stars with bonuses. And your bonus can be fantastic if you’re good.
The big company I’m familiar with gives 2 or 3 percent raises to the bulk of their employees. And then every year they hike up the cost of the health insurance, so that even with the small raise, the employees get pay cuts every year. They do not get bonuses. For a super stellar year, you might get a $25 Gift Card of Appreciation.
This is essentially piecework. In practice, apart from people like salesmen who usually depend on commission, it’s hard to calculate the productivity of either an individual or a group. Take an industrial plant - the guys on final assembly are restricted by how fast the work gets to them; the guys further down the line may be held up because supplies are not getting through, or there are too many rejects.
I used to work in a factory that had a large machine shop where many operators were on piecework. An operator would be paid £x for every thousand gizmos he made. The first problem is to decide the rate, so there were a number of rate setters employed. When a new job started, the operator would deliberately go slow so that the rate would be set on a low output. Once the rate was set, he would speed up and increase his income, and the cost of the parts.
A transport company decided to set a bonus for drivers that was related to their share price - the reasoning was that if the company did well, the share price would go up and everyone would benefit. They failed to take account of the effect of a take-over bid and eventually went into liquidation.
FWIW, I work for a state university and I got a 6% raise two years in a row. that is nearly unheard of at this university where some people haven’t had raises in years. That’s the thing about government employment. Raise freezes may be in effect. We didn’t get raises for two years even though inflation went up. Tough luck. We also don’t get bonuses. But vacation and sick leave and holidays? those we get. At least around here. YMMV.
