Should I ask for a larger raise at yearly review?

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WiseHex
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Should I ask for a larger raise at yearly review?

Post by WiseHex » Fri Feb 23, 2018 11:02 pm

Hello Boglehead Community!

I started at my company in 2015 as a Software Developer and was promoted in mid-2017 to a Senior Software Developer, which came with a 8% raise, after consistently going above and beyond, as I continue today.

My company is a great company to work for. They have given me the opportunity to work from home and support my Wife while attaining her Master's degree, which caused us to move interstate twice (once for schooling and once for clinical rotation). They are also paying for 10k a year of my own Master's that I'm completing online.

My Wife will be finishing school in a month or so and in June she will be starting her first job in May (woohoo!) which involves another move. We'll be settling down in a city that my work doesn't have an office at but they still are keeping me on and allowing me to work full time remote.

Now, to my question. Due to not being a very good negotiation I know I started at the company at the lower end of the pay scale and now, even in my new position I'm closer to mid-bottom where I feel I've been performing above average. I have my yearly review on Monday where I will be told what my annual raise will be, historically 3-5%. Now that we're settling down and I have a couple years of experience and have the data showing that I'm an above average worker I feel it's time to ask for another raise to get me at least to the mid-range of the range. I know I should have asked for more at the time of promotion but I didn't want to push it until they agreed to keep me on after my Wife found a job. Do you think it's too soon after my promotion to be asking for more money? I kinda feel guilty that they've been so good for me.

Is this just nerves or should I ask for more money on Monday?

Thanks for the advice!

lotusflower
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Re: Should I ask for a larger raise at yearly review?

Post by lotusflower » Fri Feb 23, 2018 11:10 pm

What's your BATNA? If you don't have any leverage there's not much point in asking.

WiseHex
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Re: Should I ask for a larger raise at yearly review?

Post by WiseHex » Fri Feb 23, 2018 11:23 pm

I'm working for a Chicago company and my salary is on the low end of pay in Chicago. I'm moving to NYC and would have a pretty good chance of landing a new job there for a lot more than I'd be asking for at my current company. I'd be happy with a comparatively low NYC salary to stay at my current company but could be persuaded to leave if negotiating sours.

That said, if they flat out say no I'd probably stay for a while longer until my Wife gets settled in her new job, but my boss doesn't know this. I don't foresee backlash if I ask, I have a pretty good relationship with my boss and director.

wilked
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Re: Should I ask for a larger raise at yearly review?

Post by wilked » Fri Feb 23, 2018 11:31 pm

You were promoted 6 months ago, given a nice raise, and are going to negotiate upward on your annual merit increase?

If I was your boss I would honestly be a little offended - from my perspective I have been aggressive with your career, given you tremendous flexibility on your work conditions / work-life balance, endorsed your company-funded graduate schooling, and got you an early promotion mid-cycle - and you're still not satisfied?

The 'signal' to me would be that you are not long for the company and it might not be worth my further investment

Sarah Saverdink
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Re: Should I ask for a larger raise at yearly review?

Post by Sarah Saverdink » Fri Feb 23, 2018 11:34 pm

How big is your company? I'm a manager at a megacorp and we have about 6 weeks of salary planning to determine raises for thousands of employees. Once the salary plan is set, it is set. We don't communicate raises to employees for at least a month after salary planning is closed (has to go through final HR approval, etc).

You can certainly ask for a larger raise, but chances are that window has closed. In rare cases, we are able to do out-of-cycle raises, but it needs to be very strong rationale.

WiseHex
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Re: Should I ask for a larger raise at yearly review?

Post by WiseHex » Fri Feb 23, 2018 11:37 pm

Fair enough! I figured I was being too aggressive, the "other side" perspective is what I've been looking for. Thanks for the input wilked and Sarah!

Bacchus01
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Re: Should I ask for a larger raise at yearly review?

Post by Bacchus01 » Fri Feb 23, 2018 11:37 pm

3 years on the job. Just promoted with a big raise. Paying for your MBA. Lett No you basically work remotely.

Yeah, you should ask for even more.

WiseHex
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Re: Should I ask for a larger raise at yearly review?

Post by WiseHex » Fri Feb 23, 2018 11:40 pm

Bacchus01 wrote:
Fri Feb 23, 2018 11:37 pm
3 years on the job. Just promoted with a big raise. Paying for your MBA. Lett No you basically work remotely.

Yeah, you should ask for even more.
Thanks for the input. I've always felt it never hurts to ask, especially in the IT industry. If I never asked, I would have never gotten the promotion, allowed to work from home, etc. In this case I'm definitely going to wait.

Sarah Saverdink
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Re: Should I ask for a larger raise at yearly review?

Post by Sarah Saverdink » Fri Feb 23, 2018 11:44 pm

WiseHex wrote:
Fri Feb 23, 2018 11:37 pm
Fair enough! I figured I was being too aggressive, the "other side" perspective is what I've been looking for. Thanks for the input wilked and Sarah!
Instead of directly asking for more money, ask your manager what you can do to improve and make yourself even more valuable to the company. Showing interest in an accelerated career path through hard work will reflect positively. The money will follow.

When you say you are mid-low regarding salary -- is that in comparison to your peers or published pay bands? If it's pay bands... yeah, you are brand new to that job title - it takes time to work your way up to the middle of the band. That's how it works.

MattE
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Re: Should I ask for a larger raise at yearly review?

Post by MattE » Fri Feb 23, 2018 11:54 pm

Personally, I'd push in that situation as well. In software remote work isn't exactly a rare extravagance and most STEM firms offer some level of reimbursement for continuing education including graduate school, so they're not really separating themselves from the pack there. If you're an above-average employee being paid a below average wage, make a play for what you reasonably think you're worth. IMO, the people telling you to deal with it in this topic are the people that either a) are the people who get trapped below their value or b) trap others into staying below their value. I wouldn't be hostile about it, but I would come into your review armed with facts about where you on the wage scale relative to your performance and be honest about the fact that while you enjoy where you're at a depressed wage will become harder to ignore, especially in a new market where it's probable that you could receive a significant raise on a new offer.

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ClevrChico
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Re: Should I ask for a larger raise at yearly review?

Post by ClevrChico » Sat Feb 24, 2018 12:42 am

In summary, you were promoted at year two with an 8% increase, expecting a 3-5% annual increase, work 100% remote, and you want to ask for more money?

It could be in very bad taste to ask for more, or maybe not. You'd have to know how you compare to other companies and your compa-ratio of your current position to know if you're really underpaid.

Promotions typically take years and annual increases match inflation if you're lucky.

sfchris
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Re: Should I ask for a larger raise at yearly review?

Post by sfchris » Sat Feb 24, 2018 12:50 am

If you are truly worth more, I would plan on moving to a new company to get paid that. Realistically, that's usually what ends up happening because of corporate bureaucracy.

You could give your boss a courtesy heads up, not telling him that you are planning to leave, but just say that I've become aware that I'm worth $XXX, can you do anything to get me there by my next pay raise?

There will be hiring managers on here who will take offense at that, but in today's world, it is all business, companies are not loyal and you don't need to be either. After all they lowballed your salary in the first place.

carolinaman
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Re: Should I ask for a larger raise at yearly review?

Post by carolinaman » Sat Feb 24, 2018 8:19 am

wilked wrote:
Fri Feb 23, 2018 11:31 pm
You were promoted 6 months ago, given a nice raise, and are going to negotiate upward on your annual merit increase?

If I was your boss I would honestly be a little offended - from my perspective I have been aggressive with your career, given you tremendous flexibility on your work conditions / work-life balance, endorsed your company-funded graduate schooling, and got you an early promotion mid-cycle - and you're still not satisfied?

The 'signal' to me would be that you are not long for the company and it might not be worth my further investment
+1. I agree with this response. The company has been generous to you by allowing remote work, paying for MBA, promotion, etc. Asking for more at this point comes across as being ungrateful IMO.

sfchris
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Re: Should I ask for a larger raise at yearly review?

Post by sfchris » Sat Feb 24, 2018 8:26 am

carolinaman wrote:
Sat Feb 24, 2018 8:19 am
wilked wrote:
Fri Feb 23, 2018 11:31 pm
You were promoted 6 months ago, given a nice raise, and are going to negotiate upward on your annual merit increase?

If I was your boss I would honestly be a little offended - from my perspective I have been aggressive with your career, given you tremendous flexibility on your work conditions / work-life balance, endorsed your company-funded graduate schooling, and got you an early promotion mid-cycle - and you're still not satisfied?

The 'signal' to me would be that you are not long for the company and it might not be worth my further investment
+1. I agree with this response. The company has been generous to you by allowing remote work, paying for MBA, promotion, etc. Asking for more at this point comes across as being ungrateful IMO.
They aren't being "generous" if they didn't raise him to the market rate.

z3r0c00l
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Re: Should I ask for a larger raise at yearly review?

Post by z3r0c00l » Sat Feb 24, 2018 9:12 am

I would put my effort into getting a better offer from the competition and then use that as leverage next time around. If you are unable to get a better offer, in this market, that is a telling comment on how good the current job is.

Bacchus01
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Re: Should I ask for a larger raise at yearly review?

Post by Bacchus01 » Sat Feb 24, 2018 9:18 am

sfchris wrote:
Sat Feb 24, 2018 12:50 am
If you are truly worth more, I would plan on moving to a new company to get paid that. Realistically, that's usually what ends up happening because of corporate bureaucracy.

You could give your boss a courtesy heads up, not telling him that you are planning to leave, but just say that I've become aware that I'm worth $XXX, can you do anything to get me there by my next pay raise?

There will be hiring managers on here who will take offense at that, but in today's world, it is all business, companies are not loyal and you don't need to be either. After all they lowballed your salary in the first place.
How do you know the lowballed it?

And salary is only part of the equation. I’d say the OPs total comp should be considered, not just salary.

wilked
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Re: Should I ask for a larger raise at yearly review?

Post by wilked » Sat Feb 24, 2018 12:06 pm

sfchris wrote:
Sat Feb 24, 2018 8:26 am
carolinaman wrote:
Sat Feb 24, 2018 8:19 am
wilked wrote:
Fri Feb 23, 2018 11:31 pm
You were promoted 6 months ago, given a nice raise, and are going to negotiate upward on your annual merit increase?

If I was your boss I would honestly be a little offended - from my perspective I have been aggressive with your career, given you tremendous flexibility on your work conditions / work-life balance, endorsed your company-funded graduate schooling, and got you an early promotion mid-cycle - and you're still not satisfied?

The 'signal' to me would be that you are not long for the company and it might not be worth my further investment
+1. I agree with this response. The company has been generous to you by allowing remote work, paying for MBA, promotion, etc. Asking for more at this point comes across as being ungrateful IMO.
They aren't being "generous" if they didn't raise him to the market rate.
OP was hired at “market rate” (by definition) two years ago. His/Her market rate has not changed dramatically since then.

Carter3
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Re: Should I ask for a larger raise at yearly review?

Post by Carter3 » Sat Feb 24, 2018 12:17 pm

Sarah Saverdink wrote:
Fri Feb 23, 2018 11:44 pm
WiseHex wrote:
Fri Feb 23, 2018 11:37 pm
Fair enough! I figured I was being too aggressive, the "other side" perspective is what I've been looking for. Thanks for the input wilked and Sarah!
Instead of directly asking for more money, ask your manager what you can do to improve and make yourself even more valuable to the company. Showing interest in an accelerated career path through hard work will reflect positively. The money will follow.

When you say you are mid-low regarding salary -- is that in comparison to your peers or published pay bands? If it's pay bands... yeah, you are brand new to that job title - it takes time to work your way up to the middle of the band. That's how it works.
This is the way to go. OP, I think Bacchus was being facetious. It sounds like they have done a lot for you I probably would hold off on asking for more at this point.

DrGoogle2017
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Re: Should I ask for a larger raise at yearly review?

Post by DrGoogle2017 » Sat Feb 24, 2018 12:27 pm

They let you work from home, that alone saves you a few percentage vs if you have to commute. If you plan to have kids in the future that saves you even more. Work remotely is already a bonus.

khangaroo
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Re: Should I ask for a larger raise at yearly review?

Post by khangaroo » Sat Feb 24, 2018 12:46 pm

If you can substantiate the VALUE you've added to the company since your last promotion and your current accomplishments/trajectory, then why shouldn't you ask for an additional raise? Nobody cares about your career and life more than you. That's a fact. One of the best common sense career advice I've ever gotten, that not many people follow, is "You have to ask for what you want because if you don't then you won't get it."

You should be tactful about it and start with what you've mentioned about how the company has been tremendously good to you and your family. Then state what you've achieved and why you think you deserve this additional raise. However, I would also like to +1 the previous person who said the boat for raises might have sailed already. Our company works the same way where when we announce raises to the employees, the bucket has already been divvied up and you get what you get and you don't throw a fit.

Best of luck!

Dottie57
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Re: Should I ask for a larger raise at yearly review?

Post by Dottie57 » Sat Feb 24, 2018 12:58 pm

Sarah Saverdink wrote:
Fri Feb 23, 2018 11:34 pm
How big is your company? I'm a manager at a megacorp and we have about 6 weeks of salary planning to determine raises for thousands of employees. Once the salary plan is set, it is set. We don't communicate raises to employees for at least a month after salary planning is closed (has to go through final HR approval, etc).

You can certainly ask for a larger raise, but chances are that window has closed. In rare cases, we are able to do out-of-cycle raises, but it needs to be very strong rationale.
+1

simas
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Re: Should I ask for a larger raise at yearly review?

Post by simas » Sat Feb 24, 2018 1:02 pm

" Our company works the same way where when we announce raises to the employees, the bucket has already been divvied up and you get what you get and you don't throw a fit."

how it worked in our corp - your 360 reviews were due in early January which is the same time funding amounts became finalized and available in appropriate tools, managers had to put in ratings by late January and had very specific raise pool and bonus pool targets for their crews (calculated through formula). if manager wants to give someone more then someone else in her/his team would get less, the money does not come from the sky and some discretionary pool has to pay for it. directors review/approve/adjust (i.e. if they held back any of the pools above for their own reasons), 'normalization' process is called (i.e. entire team can not be exceeding expectations and if it does then expectations were set wrong, bonus given to people who are rated as underperform, and other scenarios). higher ratings were subject to quick peer review as director level as management team ('I support' or 'I object' if anyone wants to speak up, very rare but happens). officer level signs up on the management teams work and by mid February everything is finalized and approved signal is sent down to manager level at which point they can have their 1:1 and communicate clear numbers early March. Mid March increases are seen in paychecks and bonuses are paid out.

if you are having that conversation in early March, it has been a month since your manager submitted all numbers for you and everything is locked up to C level.

Dyloot
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Re: Should I ask for a larger raise at yearly review?

Post by Dyloot » Sat Feb 24, 2018 1:16 pm

Sarah Saverdink wrote:
Fri Feb 23, 2018 11:34 pm
How big is your company? I'm a manager at a megacorp and we have about 6 weeks of salary planning to determine raises for thousands of employees. Once the salary plan is set, it is set. We don't communicate raises to employees for at least a month after salary planning is closed (has to go through final HR approval, etc).

You can certainly ask for a larger raise, but chances are that window has closed. In rare cases, we are able to do out-of-cycle raises, but it needs to be very strong rationale.
This is a great post, Sarah.

What would you recommend to those of us who work for megacorps in asking for raises instead of simply being presented with them each year?

I'm typically a very positive, happy employee. My main issue with employers is I feel stuck after the contentment of the initial offer wears off. After a few years I generally feel like the company attracted me with a solid salary offer, but once I'm invested in the company they place me (and my colleagues) in a review process that doesn't really provide merit increases based on accomplishments or performance.

In brief, it feels like they hand out the same increases each year that aren't tied to the review. This feels more like a Cost of Living Adjustment than a real raise. This overall assumption gets even stronger when you see new employees are being hired fresh off the street for higher wages than senior members of the team who have poured themselves into the job for the past decade.

Even promotions feel very formulaic. I was told by my last boss (and mentor) that a promotion could net me up to a 10% increase, even if someone hired off the street would start at much higher for the same position. I definitely felt like the company had me (and my co-workers) on strict price controls to manage the company's operational costs.

Not very inspiring!

Instead of getting mad, I've learned to enjoy the job, volunteer for everything and learn as much as I can, and, after 5-6 years, consider moving on if the offers out there are much better.

I'd love to hear your thoughts on this topic, Sarah!

Dyloot
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Re: Should I ask for a larger raise at yearly review?

Post by Dyloot » Sat Feb 24, 2018 1:18 pm

simas wrote:
Sat Feb 24, 2018 1:02 pm
" Our company works the same way where when we announce raises to the employees, the bucket has already been divvied up and you get what you get and you don't throw a fit."

how it worked in our corp - your 360 reviews were due in early January which is the same time funding amounts became finalized and available in appropriate tools, managers had to put in ratings by late January and had very specific raise pool and bonus pool targets for their crews (calculated through formula). if manager wants to give someone more then someone else in her/his team would get less, the money does not come from the sky and some discretionary pool has to pay for it. directors review/approve/adjust (i.e. if they held back any of the pools above for their own reasons), 'normalization' process is called (i.e. entire team can not be exceeding expectations and if it does then expectations were set wrong, bonus given to people who are rated as underperform, and other scenarios). higher ratings were subject to quick peer review as director level as management team ('I support' or 'I object' if anyone wants to speak up, very rare but happens). officer level signs up on the management teams work and by mid February everything is finalized and approved signal is sent down to manager level at which point they can have their 1:1 and communicate clear numbers early March. Mid March increases are seen in paychecks and bonuses are paid out.

if you are having that conversation in early March, it has been a month since your manager submitted all numbers for you and everything is locked up to C level.
This is great, Simas. I really appreciate those of you with knowledge of these processes sharing.

What would you recommend to those of us looking for raises? Asking about one in October?

simas
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Re: Should I ask for a larger raise at yearly review?

Post by simas » Sat Feb 24, 2018 1:28 pm

"What would you recommend to those of us looking for raises"

Switch roles (within the company or in new company).

reality is that person accepted a specific position at specific level of pay (slowly increasing with inflation - aka cost of living adjustment). that position has a range and once it tops, it tops. there is also such thing as staffing plan, FOEX , and org structure. if the staffing plan says 7 engineers, 1 senior engineer , 2 junior engineers , and 1 manager overseeing - such organization can not magically change to accommodate 5 people all wanting to be 'senior' and want that level of pay, there simply not a slot for at least 3 of them. want to wait , great. don't want to wait, go apply in other teams that have the slots.

there are ways around it which requires significant buy in and political capital from your manager and his/her manager. I have done it for folks bumping them 20-30-40% because it was in the right interests of the company . I have also told people that they should pursue all options (and let job market help them figure out their 'worth') when expectations did not align with reality. I have done successful business cases that teams purposes change and I no longer need 2 juniors and instead it is a different team's composition changing how headcount work. basically, your management team knows what to do, question is whether they are willing to risk their capital on you. and 'I do my job well' is not enough - isn't that what are you being paid for, and should you not be here if you don't do you job well?

simas
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Re: Should I ask for a larger raise at yearly review?

Post by simas » Sat Feb 24, 2018 1:36 pm

"I definitely felt like the company had me (and my co-workers) on strict price controls to manage the company's operational costs."

of cause it does, it is a primary duty to shareholders/owners. not sure why the surprise

"This overall assumption gets even stronger when you see new employees are being hired fresh off the street for higher wages than senior members of the team who have poured themselves into the job for the past decade."

two things here
- if you have strong business case that you are worth more, you should be willing to test it out (walk away). I have seen returning employees (which we rehired at higher paybands), I have also seen cases where peoples opinion of themselves did not match reality. again, up to your manager and his/her management chain who would support/not support managers decision on keep you or allow you to walk away.

- "have poured themselves into the job for the past decade" .

And? So? if you are dumping the fries, you are dumping the fries, with commitment, without committment, pouring yourself in, out, whatever. you are still dumping the fries. why do you think it suddenly worth more if you are doing the same role longer? now, if instead you deliver a different value and can successfully communicate it (i am not talking about suckup which rarely gets you anywhere as management chain can smell that very easily), then you have pretty strong chances.

in professional history I have found many 'gems' where could take a 30k customer service person and have them do 90k IT job in few years. they showed they want it and proven value along the way. I have also seen naggers and complainers and 'i deserve it' BS which did not get anywhere. up to you to show value (whatever it is in company you are working with). I have lost count of people who kept saying 'I will' (get certification, get training, do this, do that) and then did nothing.. the people who instead acted with ' I have done' (certification ,training, etc) were few and far between

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gunn_show
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Re: Should I ask for a larger raise at yearly review?

Post by gunn_show » Sat Feb 24, 2018 1:44 pm

khangaroo wrote:
Sat Feb 24, 2018 12:46 pm
If you can substantiate the VALUE you've added to the company since your last promotion and your current accomplishments/trajectory, then why shouldn't you ask for an additional raise? Nobody cares about your career and life more than you. That's a fact. One of the best common sense career advice I've ever gotten, that not many people follow, is "You have to ask for what you want because if you don't then you won't get it."

You should be tactful about it and start with what you've mentioned about how the company has been tremendously good to you and your family. Then state what you've achieved and why you think you deserve this additional raise. However, I would also like to +1 the previous person who said the boat for raises might have sailed already. Our company works the same way where when we announce raises to the employees, the bucket has already been divvied up and you get what you get and you don't throw a fit.

Best of luck!
very well said, covering both ends of the discussion, and I agree with both, as I work in a megacorp (based on "simas" writeup, I think the same firm as him/her)

Absolutely agree 100% with the statement "Nobody cares about your career and life more than you" and I preach this to a lot of younger folks I talk to. So, if you feel you have the story to ask for more money, the data, understand the internal pay bands and where you fit into it currently, and feel you are above average and getting paid below average (and cant point to concrete results), absolutely go fight for yourself. Otherwise you are on the fast tract to mediocre pay increases. You started where you are because of where you were in your career, but if you have matured, added an MBA, and done the work, then go fight for it.

However as Sarah and others mentioned, it partly depends on your company, size, and processes. As Simas wrote, my megacorp starts performance review paperwork (usually written by employee and discussed and fine tuned with manager, who then submits) in late Dec early Jan, gets locked in around Feb, and then results and raises are rolled out in March. So if you want to negotiate in this scenario, you have to do it in Dec/Jan when you are drafting your perf review documents and make your case to your boss why you deserve XYZ. Now your company may have a completely different process, so you need to understand what it is and work backwards appropriately, and figure out the right time to start the conversation with your boss to build your case for when he goes to the management committee to fight for your new comp. It's all a game, you have to figure out the game, and play it better than the next guy, assuming you have the skills and work to back it up. Like some others have said, it also often means changing employers to get the best raise. I have done it every 2-4 years on average. I am coming up on 4yrs at my megacorp, but moved to a new team a month ago to get into a new higher-level role and better comp plan. Always be moving and improving.
"The best life hack of all is to just put the work in and never give up." Bas Rutten

michaeljc70
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Re: Should I ask for a larger raise at yearly review?

Post by michaeljc70 » Sat Feb 24, 2018 2:25 pm

Bacchus01 wrote:
Fri Feb 23, 2018 11:37 pm
3 years on the job. Just promoted with a big raise. Paying for your MBA. Lett No you basically work remotely.

Yeah, you should ask for even more.
I agree.

OP is stuck. Sometimes the only way to get caught back up if you start low is to switch companies (which it sounds like you don't want to do) or get a counter from them if you get another job (which is always dicey).

ImUrHuckleberry
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Re: Should I ask for a larger raise at yearly review?

Post by ImUrHuckleberry » Sat Feb 24, 2018 2:46 pm

michaeljc70 wrote:
Sat Feb 24, 2018 2:25 pm
Bacchus01 wrote:
Fri Feb 23, 2018 11:37 pm
3 years on the job. Just promoted with a big raise. Paying for your MBA. Lett No you basically work remotely.

Yeah, you should ask for even more.
I agree.

OP is stuck. Sometimes the only way to get caught back up if you start low is to switch companies (which it sounds like you don't want to do) or get a counter from them if you get another job (which is always dicey).
It's a good time to switch companies with the job market being so hot and his employer knows this as well, so it probably doesn't hurt to ask especially if willing to move on.

Right now many employers are bending over backwards to retain productive employees. My own experience with this is I started a new job in Jan 2016 moderately underpaid and over-qualified, got promoted in Aug 2016 with a 14% raise, promoted again in Dec 2016 with a 25% raise, and then received a salary adjustment in Aug 2017 with a 10% raise. And was just told I'm being promoted in May with a promotional raise and likely another salary adjustment, so I'm thinking 15-20% but it's not finalized.

I asked for none of this and have made no mentions of being unhappy or wanting to leave. But turnover has been high and the job market is insane right now in my field, as I believe it also is in OP's field, so it appears my employer is being very proactive to retain key employees.

OP is probably in a good position to ask.

simas
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Re: Should I ask for a larger raise at yearly review?

Post by simas » Sat Feb 24, 2018 3:22 pm

gunn_show wrote:
Sat Feb 24, 2018 1:44 pm
boss to build your case for when he goes to the management committee to fight for your new comp. It's all a game, you have to figure out the game, and play it better than the next guy, assuming you have the skills and work to back it up. Like some others have said, it also often means changing employers to get the best raise. I have done it every 2-4 years on average. I am coming up on 4yrs at my megacorp, but moved to a new team a month ago to get into a new higher-level role and better comp plan. Always be moving and improving.
not only it is a game, you and your manager (and reality the entire management team) are on the same team! at every level, these are teams, and work as teams. if you manager acting against interests of the team and their supervisor (MD , managing director level in the megacorp I am used to), then having them push your case actually hurts you . if your MD is making a play for her/his bosses position and then loses, regardless of your chances below, getting officer override (out of band increase, out of cycle promotion, higher bonus) is highly unlikely.

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Earl Lemongrab
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Re: Should I ask for a larger raise at yearly review?

Post by Earl Lemongrab » Sat Feb 24, 2018 4:05 pm

carolinaman wrote:
Sat Feb 24, 2018 8:19 am
The company has been generous to you by allowing remote work, paying for MBA, promotion, etc. Asking for more at this point comes across as being ungrateful IMO.
If the tuition reimbursement and work at home are standard for the company, as is likely, then it's not being generous. No more so than paying for medical insurance.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

michaeljc70
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Re: Should I ask for a larger raise at yearly review?

Post by michaeljc70 » Sat Feb 24, 2018 4:12 pm

ImUrHuckleberry wrote:
Sat Feb 24, 2018 2:46 pm
michaeljc70 wrote:
Sat Feb 24, 2018 2:25 pm
Bacchus01 wrote:
Fri Feb 23, 2018 11:37 pm
3 years on the job. Just promoted with a big raise. Paying for your MBA. Lett No you basically work remotely.

Yeah, you should ask for even more.
I agree.

OP is stuck. Sometimes the only way to get caught back up if you start low is to switch companies (which it sounds like you don't want to do) or get a counter from them if you get another job (which is always dicey).
It's a good time to switch companies with the job market being so hot and his employer knows this as well, so it probably doesn't hurt to ask especially if willing to move on.

Right now many employers are bending over backwards to retain productive employees. My own experience with this is I started a new job in Jan 2016 moderately underpaid and over-qualified, got promoted in Aug 2016 with a 14% raise, promoted again in Dec 2016 with a 25% raise, and then received a salary adjustment in Aug 2017 with a 10% raise. And was just told I'm being promoted in May with a promotional raise and likely another salary adjustment, so I'm thinking 15-20% but it's not finalized.

I asked for none of this and have made no mentions of being unhappy or wanting to leave. But turnover has been high and the job market is insane right now in my field, as I believe it also is in OP's field, so it appears my employer is being very proactive to retain key employees.

OP is probably in a good position to ask.
It could be your field. Or, if turnover is high, some companies do a comprehensive salary review of everyone and compare them to the market and make adjustments. That happened at one place I worked. He can ask for an increase, but I would wait until it's been a year after the last increase. You also cannot dismiss the value of the flexibility he has been given (Along with tuition reimbursement). It is harder to find a top paying job where they let you live in another city and work from home.

Edit: If they do decide to switch jobs, I would check the tuition reimbursement policy. Most employers will not let you just quit without there being a clawback period.

drk
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Re: Should I ask for a larger raise at yearly review?

Post by drk » Sat Feb 24, 2018 4:25 pm

You know your company culture better than we do. If the facts indicate that you are underpaid relative to the value that you add, though, you basically have two options:
  1. Speak with your manager and lay out your argument for a raise
  2. Get an offer from another company and either take it or use it for (1)
Now, some other advice: annual reviews are not the best time to have this conversation. A lot of people think about it that way because companies frame it as The Time that Compensation Decisions are Made, but that's hogwash. Companies are hiring throughout the year, which definitely involves negotiating compensation and even breaking the rules for certain candidates. They also promote people between review cycles, which also involves compensation changes. Besides, every day that you log on for work, both the company and you are re-upping your existing compensation agreement. That's at-will employment. If you don't think that your compensation accurately reflects your value to the company, there is absolutely nothing wrong with having a conversation to change it.

Sarah Saverdink
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Re: Should I ask for a larger raise at yearly review?

Post by Sarah Saverdink » Sat Feb 24, 2018 4:52 pm

Dyloot wrote:
Sat Feb 24, 2018 1:16 pm
What would you recommend to those of us who work for megacorps in asking for raises instead of simply being presented with them each year?

I'm typically a very positive, happy employee. My main issue with employers is I feel stuck after the contentment of the initial offer wears off. After a few years I generally feel like the company attracted me with a solid salary offer, but once I'm invested in the company they place me (and my colleagues) in a review process that doesn't really provide merit increases based on accomplishments or performance.

In brief, it feels like they hand out the same increases each year that aren't tied to the review. This feels more like a Cost of Living Adjustment than a real raise. This overall assumption gets even stronger when you see new employees are being hired fresh off the street for higher wages than senior members of the team who have poured themselves into the job for the past decade.

Even promotions feel very formulaic. I was told by my last boss (and mentor) that a promotion could net me up to a 10% increase, even if someone hired off the street would start at much higher for the same position. I definitely felt like the company had me (and my co-workers) on strict price controls to manage the company's operational costs.
Every company is different, but in general, yes, there is some sort of base formula used as a starting point to determine yearly raises for the organization. Managers typically have the discretion to deviate (to a certain extent). As a few others have mentioned, for a high-performer to receive a higher than average raise, a lower performance will need to receive a lower raise to meet the overall budget. Simple math.

Most companies take efforts to reward and retain their highest performers. My husband and I (different companies) have both heard many complaints from peers about "oh, great, another 2% raise again this year...", yet we have received raises of 3x-4x that in the same year. We were both tagged as high-performers with long-term potential and were rewarded as such. Remember -- the employees receiving 8% yearly raises when their peers are receiving significantly less aren't going to brag about it. Have your performance reviews indicated you are a top performer? Its possible management is viewing you as an average employee, hence the "average" raise. Alternatively, some managers hate disappointing people or dealing with conflict and simply distribute raises with little differentiation to avoid having tough conversations. That's very poor management, in my opinion.

With regards to external hires - that's a tricky one. Most people won't leave a job for lateral pay, so if the company is trying to recruit a talented individual who is already fairly compensated, management may need to offer a higher salary to attract them. Management *should* be reviewing the current population of employees with similar experience/skills to ensure a new hire doesn't upset the existing salary structure, but that doesn't always happen. If a new employee gets hired at a higher salary and you are doing comparable work, that actually gives your manager stronger rationale for advocating for a larger raise for you during the next salary planning cycle. It may take awhile, but good managers will work hard to get their employees where they should be for salary/title. On the flip side, if you were hired in higher than your peers, you may be receiving slightly lower raises while your peers catch up.

But yeah, all large organizations have guidelines and formulas around salaries, raises, promotions, etc. to try and ensure consistency within their organization. A lot depends on how much your manager advocates for you and there are always exceptions to the rules in rare cases. I will also say that a lot of employees view themselves very highly and do not always recognize that a number of their peers match their performance/contributions to the company or that their peers are even higher performers than they are. It's all about perspective. Management has a much broader view and makes decisions on factors that individuals simply do not have access to.

Let your manager know that you are interested in advancing your career and commensurate compensation, but don't bug him/her for a raise every 3 months. Volunteer for challenging assignments, go above and beyond on a daily basis, figure out what pieces of your job benefit your boss the most and make those your top priorities. Essentially, make yourself stand out as an ambitious top-performer and the rest will follow.

Dyloot
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Re: Should I ask for a larger raise at yearly review?

Post by Dyloot » Sun Feb 25, 2018 10:58 am

Sarah Saverdink wrote:
Sat Feb 24, 2018 4:52 pm
Dyloot wrote:
Sat Feb 24, 2018 1:16 pm
What would you recommend to those of us who work for megacorps in asking for raises instead of simply being presented with them each year?

I'm typically a very positive, happy employee. My main issue with employers is I feel stuck after the contentment of the initial offer wears off. After a few years I generally feel like the company attracted me with a solid salary offer, but once I'm invested in the company they place me (and my colleagues) in a review process that doesn't really provide merit increases based on accomplishments or performance.

In brief, it feels like they hand out the same increases each year that aren't tied to the review. This feels more like a Cost of Living Adjustment than a real raise. This overall assumption gets even stronger when you see new employees are being hired fresh off the street for higher wages than senior members of the team who have poured themselves into the job for the past decade.

Even promotions feel very formulaic. I was told by my last boss (and mentor) that a promotion could net me up to a 10% increase, even if someone hired off the street would start at much higher for the same position. I definitely felt like the company had me (and my co-workers) on strict price controls to manage the company's operational costs.
Every company is different, but in general, yes, there is some sort of base formula used as a starting point to determine yearly raises for the organization. Managers typically have the discretion to deviate (to a certain extent). As a few others have mentioned, for a high-performer to receive a higher than average raise, a lower performance will need to receive a lower raise to meet the overall budget. Simple math.

Most companies take efforts to reward and retain their highest performers. My husband and I (different companies) have both heard many complaints from peers about "oh, great, another 2% raise again this year...", yet we have received raises of 3x-4x that in the same year. We were both tagged as high-performers with long-term potential and were rewarded as such. Remember -- the employees receiving 8% yearly raises when their peers are receiving significantly less aren't going to brag about it. Have your performance reviews indicated you are a top performer? Its possible management is viewing you as an average employee, hence the "average" raise. Alternatively, some managers hate disappointing people or dealing with conflict and simply distribute raises with little differentiation to avoid having tough conversations. That's very poor management, in my opinion.

With regards to external hires - that's a tricky one. Most people won't leave a job for lateral pay, so if the company is trying to recruit a talented individual who is already fairly compensated, management may need to offer a higher salary to attract them. Management *should* be reviewing the current population of employees with similar experience/skills to ensure a new hire doesn't upset the existing salary structure, but that doesn't always happen. If a new employee gets hired at a higher salary and you are doing comparable work, that actually gives your manager stronger rationale for advocating for a larger raise for you during the next salary planning cycle. It may take awhile, but good managers will work hard to get their employees where they should be for salary/title. On the flip side, if you were hired in higher than your peers, you may be receiving slightly lower raises while your peers catch up.

But yeah, all large organizations have guidelines and formulas around salaries, raises, promotions, etc. to try and ensure consistency within their organization. A lot depends on how much your manager advocates for you and there are always exceptions to the rules in rare cases. I will also say that a lot of employees view themselves very highly and do not always recognize that a number of their peers match their performance/contributions to the company or that their peers are even higher performers than they are. It's all about perspective. Management has a much broader view and makes decisions on factors that individuals simply do not have access to.

Let your manager know that you are interested in advancing your career and commensurate compensation, but don't bug him/her for a raise every 3 months. Volunteer for challenging assignments, go above and beyond on a daily basis, figure out what pieces of your job benefit your boss the most and make those your top priorities. Essentially, make yourself stand out as an ambitious top-performer and the rest will follow.
Thank you, Sarah. You confirmed a few things, and added some additional context. It's very helpful.

I'm in year two at my first Megacorp. I wasn't eligible for a raise at my first review period because I had only been with the company a few months during the raise process--although I did receive a pro-rated bonus. I was warned by my boss in my first review that raises are often 2%, and also not to share how much I make with my colleagues because it could cause problems. Those two pieces of information told me that the megacorp was operating much like the mid-size ($600 million annual revenue, 1500 employees) company I had worked for previously.

I had an interesting opportunity at my last job to serve as the "new guy", then later the senior guy, and finally the lead with direct reports. I learned through that experience that everyone on my team was basically being given the same raise and bonus percentages. If someone was promoted, they'd receive 5-10%--even if they were low paid and a solid performed who had been hand-picked for a new role. What I saw here was that a young, promising employee who had worked hard and had been rewarded with a promotion was started at a very low wage in his or her new role; much less than a new hire off the street. And once that happened, even if that employee proved to be a high performer in that role, he or she was generally locked down with formulaic raises kept them at a very low wage in the years that followed.

So, we'll see what happens in my upcoming review at the Megacorp. I won a Departmental Excellence Award in my first year. I hate to call myself a high performer--I'd rather my colleagues call me that--but I work hard and love what I do.

I really like my boss, colleagues, and the business as a whole. I'd like to stick around for many years. But, I'm also prepared for the salary lockdowns that will serve as motivation to look for the next opportunity after year 5 or so.

Again--thanks for taking the time to share your experiences and perspective. I really appreciate it.

Sarah Saverdink
Posts: 20
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Re: Should I ask for a larger raise at yearly review?

Post by Sarah Saverdink » Sun Feb 25, 2018 1:51 pm

Dyloot wrote:
Sun Feb 25, 2018 10:58 am
I'm in year two at my first Megacorp. I wasn't eligible for a raise at my first review period because I had only been with the company a few months during the raise process--although I did receive a pro-rated bonus. I was warned by my boss in my first review that raises are often 2%, and also not to share how much I make with my colleagues because it could cause problems. Those two pieces of information told me that the megacorp was operating much like the mid-size ($600 million annual revenue, 1500 employees) company I had worked for previously.
Pro-rated raises/bonuses for partial-year employees is pretty standard. If your manager is already warning you that average raises are 2%... that doesn't bode well. It sounds like a scripted line to keep expectations low. If you do perform highly and still receive 2% raises for multiple years, you may want to consider looking elsewhere. Companies should be rewarding high-performance and impact to the business, otherwise what is the incentive to work hard?
Dyloot wrote:
Sun Feb 25, 2018 10:58 am
I had an interesting opportunity at my last job to serve as the "new guy", then later the senior guy, and finally the lead with direct reports. I learned through that experience that everyone on my team was basically being given the same raise and bonus percentages. If someone was promoted, they'd receive 5-10%--even if they were low paid and a solid performer who had been hand-picked for a new role. What I saw here was that a young, promising employee who had worked hard and had been rewarded with a promotion was started at a very low wage in his or her new role; much less than a new hire off the street. And once that happened, even if that employee proved to be a high performer in that role, he or she was generally locked down with formulaic raises kept them at a very low wage in the years that followed.
Yes, this sounds like a classic example of not paying for performance. It's a great way to drive your highest performers out the door to the competition. Formulas are fine as a starting point, but they need to be flexible enough to reward those who are advancing quickly and performing at a higher level. If someone is new to a role and doing an exceptional job, their initial salary may be lower than some of their peers (new to pay band/role; totally normal), but they should be receiving higher raises to help them "catch up" and surpass the lower performers over time. It 's not an instantaneous process and may take a few years. If everyone receives the same raises, the high performers will always be at a disadvantage. Not good business practice, IMO.

HornedToad
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Re: Should I ask for a larger raise at yearly review?

Post by HornedToad » Sun Feb 25, 2018 2:37 pm

As a counterpoint to Sarah's excellent points, it's also possible that Megacorp really will only limit raises to 2-4%. However, if you are a high performer you can talk to your boss/director/etc and raise concerns about salary and that you'd like to stay but the market is higher outside, etc etc. Not necessarily during the annual review, but sometime in a one on one. The annual review might be limited to small raises, but there can always be mid-year raises, special increases, lateral promotion, retention bonus etc that might alleviate it. It really depends on how high a performer you are and how flexible the company is.

There's a reason people leave companies every 3-4 years, but if you are high performing and would like to stay and give them time, you can judge whether you will be rewarded or not. It also helps if you can show why you are worth more other than just more years experience: finished your Master's, got a key certification, led some great initiative, etc to give your management more ammunition for a raise.

N10sive
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Re: Should I ask for a larger raise at yearly review?

Post by N10sive » Sun Feb 25, 2018 4:45 pm

I didn't read the size of your company but as others put it you know the company culture the best.

My last company I was alway underpaid but every year received a raise and had very cheap stock options and loved my job. It got a little unbearable later and so I asked for a raise when I had a job opportunity not lined up but prospected. They immediately gave me a 30% raise. A few months later I was offered a job I wanted to do and again told my current company. They offered me another 15%. That was a 45% raise in only a matter of 4 months. I was more or less displeased that they wouldn't pay me that before and figured I lost probably a full years salary or two over the course of my tenure their.

I left and I know they are looking for two people to replace me and struggling to hire more. While its not the best to ask for a raise if you plan to leave without a job lined up, if you approach it correctly it may not matter. But like others have said if its a large company this will make it harder. My example was with a very small company.

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