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(Slate)   A discussion on annual salary increases - from someone who clearly doesn't understand inflation or the consumer price index   (slate.com) divider line 41
    More: Asinine, inflation  
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3071 clicks; posted to Business » on 20 Mar 2014 at 12:30 PM (38 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-03-20 12:49:26 PM  
5 votes:

sendtodave: Are you doing more than you were before to justify the pay increase?

Good.

Are you doing about the same amount of work as you were the previous year? Then you should get paid the same as the previous year.

What, you think your labor is magically worth more or something?


Inflation erodes your wages some amount, lets say 2-5% every year.  Should I do 2-5% less work every year if I don't get a raise?  No?  Then shut the fark up.
2014-03-20 12:56:27 PM  
3 votes:
Whenever it's THEIR salaries under discussion, it's "the market" setting their wages, and they're just helplessly going along to get along.

Whenever it's OUR wages under discussion, what have you done to deserve it, serf?

// this is why we need unions
// yes, in your sector as well
2014-03-20 09:59:44 PM  
2 votes:
What a bunch of lying shiat.  It's been well established that individual employee productivity continually increases over time, yet wages have been stagnant or even declining -especially in comparison to inflation and COLA.

FTA:
Wages must be based only on productivity.

Oh, really?  So naturally when a company lays off significant percentages of its staff, those that remain who are expected to maintain the overall productivity, despite fewer numbers, will see greater compensation for the expected increased individual productivity?

What a lying POS.

According to this jackasses philosophy, the next time your colleague calls in sick leaving the business short staffed, the employees should either NOT work to pick up that productivity slack, or insist on a pay increase to do so -because he endorses pay for productivity.
2014-03-20 02:34:45 PM  
2 votes:
FTA:  Wages must be based only on productivity.

Isn't "productivity" a function of hours worked and revenue?  So if the same number of people increase revenue by 10% then don't they all deserve a 10% increase in salary?
2014-03-20 12:51:00 PM  
2 votes:

sendtodave: TheSelphie: I'm out if my boss doesn't give me a substantial raise after starting my pay under market and then giving me the standard, everyone gets it 2% increases after two years.  She knows this and I'm pretty much essential as far as she's concerned, but it's been a week since the discussion and I haven't heard anything.  When do I put up a racket, assuming I don't get a hard job offer from another company by then (I have a few prospects)?

Are you doing more than you were before to justify the pay increase?

Good.

Are you doing about the same amount of work as you were the previous year?  Then you should get paid the same as the previous year.

What, you think your labor is magically worth more or something?


Actually, yes it is.  Do you think recruiting, hiring, and training a new employee does not result in lost productivity?
2014-03-20 12:45:06 PM  
2 votes:

TheSelphie: When do I put up a racket, assuming I don't get a hard job offer from another company by then (I have a few prospects)?


when you have a job offer with better pay in hand.
2014-03-20 11:52:58 AM  
2 votes:
Wages must be based only on productivity.

So the CEO is only going to get paid 10 times as much as a secretary?

They're not going to like that.
2014-03-21 09:14:15 AM  
1 votes:

Altman: rumpelstiltskin: I was being a little obnoxious with the responsible bit. I don't think "most" people in America can afford to be "responsible", the way I've said it. More than are could be, but if it comes to most, it won't get there by much.

Yeah, but I think a lot of people in major metro areas forget how much lower the cost of living is in other parts of the country.  If you live somewhere cheap and make like $30K a year, you can live well and still be able to sock away a good amount of money each month.


Not sure if high or retarded. I live in east central IL which is pretty f*cking cheap, and $30K a year with no kids/family will get you a car payment, shiat rental domicile and...that's about it.
2014-03-21 08:55:57 AM  
1 votes:

sendtodave: What, you think your labor is magically worth more or something?


Sure is, and it ain't magic.  It's called inflation.

Change in income = raise - inflation.

Plenty of companies are more than willing to pay you less year over year because you're too stupid to realize it, or too screwed to do anything about it.
2014-03-21 08:07:44 AM  
1 votes:

quizzical: TheSelphie: I'm out if my boss doesn't give me a substantial raise after starting my pay under market and then giving me the standard, everyone gets it 2% increases after two years.  She knows this and I'm pretty much essential as far as she's concerned, but it's been a week since the discussion and I haven't heard anything.  When do I put up a racket, assuming I don't get a hard job offer from another company by then (I have a few prospects)?

If it's been a week and things haven't been unusually hectic, it is time for a gentle reminder that you're waiting for an answer.  Maybe ask her if she is free next week to have a follow up conversation about the meeting.  That assumes you're willing to walk next week, though, if the answer is no raise.


That's about what I did. Once I decided it was "time" I went to the boss and had the talk. The whole thing complete with here's how much money I made you last year, and in fact here's how much I made you over the last 5 years, here are points at which I saved you money, and here are the points where I would have saved money but didn't get listened to, and so it cost you more than it should have. And here is what people in my position who do what I do make elsewhere. When I got no response, I got serious about finding something new. After I had an offer in hand I went back to the boss and showed it to him and told him that here was his chance to offer something to at least try to keep me. He didn't even bother to counter so I left for the new job at 25% more pay.

Now, people might say that since he didn't bother to counter, that I wasn't worth what I was asking for, but the reality is that he was constantly losing and hiring contractors for 2x PLUS what I was making. They underperformed, didn't have institutional knowledge or a stake in the community or culture of the company. Those of us who were permanent employees frequently had to redo their work when they left often in less time than the contractors were initially given to complete. We did it though, and the thanks we got was usually nothing, but occasionally was around half of inflation (about every third year we would get about half of a raise) It's pretty sucky to have to train someone to help you but who you know is getting paid more because "market conditions"

Make yourself part of that market. Good luck.
2014-03-20 09:37:24 PM  
1 votes:
The only thing this article proves is that America is still full of temporarily-embarrassed millionaires, and that someone who runs a jewelry business thinks they're on the level of corporations.  Not only is this person an ass, they're more of an ass than most actual large businesses because she thinks she's one of them.  Her and her shiatty little company.

We are truly farked in the head.
2014-03-20 07:35:37 PM  
1 votes:
Yeah, the person that wrote this is an idiot.

You get what you pay for.  It's an old adage, but it still holds weight.
2014-03-20 07:26:06 PM  
1 votes:

sendtodave: Altman: sendtodave: Are you doing more than you were before to justify the pay increase?

Good.

Are you doing about the same amount of work as you were the previous year? Then you should get paid the same as the previous year.

What, you think your labor is magically worth more or something?

Inflation erodes your wages some amount, lets say 2-5% every year.  Should I do 2-5% less work every year if I don't get a raise?  No?  Then shut the fark up.

No, you should do the same amount of work and eat that loss.

If you aren't doing more work than the last year, you're still a lazy go nowhere.


Sounds like you think everyone in the world who works 40 hours is worth the same pay. Sounds like you think experience and knowledge are worth nothing. Sounds like you're very smart and have really thought this through.
kab
2014-03-20 06:21:08 PM  
1 votes:

DrPainMD: Looks like I was wrong. This appears to be the thread where people who, all else being equal, will pick the product that costs less biatch about people who, all else being equal, will pick the employee who costs less.


It's almost as if folks who lose ground financially (given stagnant wages vs inflation) are forced to buy with price in mind above all else.

No, that couldn't be it.
2014-03-20 04:24:23 PM  
1 votes:

sendtodave: Dr Dreidel: sendtodave: Dr Dreidel: If productivity goes up, the only people who should make money are the owners, not the rank-and-file who do the work?

Are we talking under capitalism, or socialism?

Let's split the difference (sort of) and say "American capitalism".

Cream rises to the top.  So does money.


So then what incentive is there for me to work any harder than the barest of minima? I'm not going to do any better if the company does, so why bother at all? It's incentive for me to find ways to not do anything, rather than incentive to actually produce for the company (who, by the way, demand my full loyalty).

I wouldn't expect all $90k to go to the workers, but I would expect that some significant portion of it does. The lion's share will hopefully go to reinvestment (as it should). and what happens next is where I have the problem: it goes to exec compensation, and maybe - MAYBE, if it was a really good year that can't be hidden from the books, and if the boss isn't an asshammer (the chances of which, collectively, sit around 10%) - some nominal sum tossed to the workers.

Case in point: I made an orientation video for my old company (to remove the need to have "expensive" HR people talk at new hires for 8-10 hours their first 2 days of work). I wrote the script, recorded the VO, mixed/produced it, and made it available on the corporate intranet. I did this mostly by working 2 month's worth of weekends (to have a quiet space to record). My bonus? $200.

Not that I'd spit on $200 (and I did enjoy spending it on a new bass), but that's approximately what they saved on the next hire (singular). It would have been nice if the bonus (which I wasn't even expecting) was in some way commensurate with the effort and the savings.

// looking back, 24 year old me thought $200 was a good bonus
// a useless VP got a $10k bonus a few years after - no one's sure what she did to earn it
// that company's gone from 120 people 3 years ago to 4, and they're about to go tits-up entirely
// good riddance to bad rubbish
2014-03-20 04:00:40 PM  
1 votes:

rumpelstiltskin: If you're a responsible adult and don't spend more than about 20% of your income on goods and services for consumption, then inflation and the CPI really shouldn't have much to do with your annual salary discussions.


You don't seem to understand how inflation works.

If you rent, you can expect your rent (roughly) to go up with inflation.

If you own a home, you can (roughly) expect all your utilities and services to go up with inflation, as well as any home repair materials and labor costs.

If you drive a car or take public transit, you can (roughly) expect the cost of transportation to go up with inflation.

Certain sectors lag behind or jump ahead when it comes to inflationary costs, but in aggregate, every dollar you spend is (roughly) affected by inflation. That means that the only portion of your income that isn't affected by inflation is whatever you save and don't spend.

Ultimately, the business is the one who is "purchasing" the labor of the employee. Why shouldn't their costs go up with inflation? The only reason we haven't been having raises is because the labor pool is saturating.
2014-03-20 03:52:01 PM  
1 votes:

Fark_Guy_Rob: I've had a few jobs where productivity went up, but it had nothing to do with us workers. I wouldn't expect a raise in those situations.


"Kiss ass while you biatch so you can get rich
While your boss gets richer off you"

If productivity goes up, the only people who should make money are the owners, not the rank-and-file who do the work?

Management lays out $10 grand for new computers, which kicks productivity up, which increases revenues $100 grand (over the same period last year). Where does that extra $90,000 go? Who "deserves" it more - management who threw money at the problem, or the workers who actually solved it?
2014-03-20 03:44:24 PM  
1 votes:

sendtodave: TheSelphie: I'm out if my boss doesn't give me a substantial raise after starting my pay under market and then giving me the standard, everyone gets it 2% increases after two years.  She knows this and I'm pretty much essential as far as she's concerned, but it's been a week since the discussion and I haven't heard anything.  When do I put up a racket, assuming I don't get a hard job offer from another company by then (I have a few prospects)?

Are you doing more than you were before to justify the pay increase?

Good.

Are you doing about the same amount of work as you were the previous year?  Then you should get paid the same as the previous year.

What, you think your labor is magically worth more or something?


Call it a retention bonus then, because if you have to replace me productivity goes down and costs go up. Particularly if you have been treating your employees like shiat for years and they stopped writing key components of your business process down.
2014-03-20 03:06:31 PM  
1 votes:
This is definitely the right way to do things in theory, but the ability to objectively measure value added without creating perverse incentives is very difficult.
2014-03-20 02:47:37 PM  
1 votes:

rumpelstiltskin: If you're a responsible adult and don't spend more than about 20% of your income on goods and services for consumption, then inflation and the CPI really shouldn't have much to do with your annual salary discussions.


Inflation means my expenses go up. My expenses going up and my pay staying the same means I'm effectively taking a pay cut. A few years of exactly that happening is the reason why I looked for and found a new job.

The logic is pretty simple. Why you think it matters what my particular expenses are is beyond me. I guess I'd be less inflation-sensitive if I owned instead of rented, but I'd still have to pay for the inflated cost of everything else.
2014-03-20 02:21:11 PM  
1 votes:

Fark_Guy_Rob: I honestly don't see why people have a problem with this.  Maybe I've just had bad experiences, but I hate the idea of an annual raise that people expect.  I've worked at companies in the past (large insurance company and small government software gig) that had these expectations that everyone would get a raise.

It sounds great.  But inevitably what would happen is that you'd have a mediocre employee who, is a nice person, who fits the culture, but kinda sucks at their job....but not enough to be a performance problem.  They're on the fast track to nowhere...but the company culture was 'The company is doing good - raises all around'.  In most careers, after the first few years, your salary really tappers off, but so does your performance.  A brick layer with 7 years of experience isn't much more productive than someone with 5 years.  So, the the types of employees I'm talking about, they weren't off getting promoted or building a new skillset....they were just showing up, doing the minimum and getting a raise.

After five, ten or twenty years of this, you had someone who wasn't good at their job and had a completely outdated skillset.  But they made A LOT more money at the company than they could make anywhere else.  It's an environment that encourages your worst employees to stay and entrench themselves, while the goods ones get sick of it and move on.

In the first case, the company started threatening layoffs and they tried to PAY these people to retire.  Some guy with 25 years at the company who was doing less productive work than kid with one year of experience, but who was getting paid 2-4x as much.    At the second company, it got so over-saturated with worthless employees they couldn't meet their legal obligations and were sued into bankruptcy.  One of the last things they did before everything hit the fan was admit the company was going to tank and they went and fired 60% of their staff.  I kid you not, I could have named every single one that didn't make ...


Then you wind up with transient work forces.  When the only way to get a raise is to move on, you move on. It is very very common in my field. When you need to fill a position that requires 10-15 years of experience, you hire one from outside.  You have to pay that person what they are worth based upon experience, or another company will.  If you can't fill the positions quickly enough, you will lose contracts. So you get almost no corporate loyalty, and people that will leave your company at the drop of a hat. If you don't give the ones that stick around at a minimum cost of living raises, you will just be walking around a bunch of empty cubicles.
2014-03-20 02:19:29 PM  
1 votes:
Here's our randian psychopath now...

www.inc.com
2014-03-20 02:06:23 PM  
1 votes:

Altman: rumpelstiltskin: If you're a responsible adult and don't spend more than about 20% of your income on goods and services for consumption, then inflation and the CPI really shouldn't have much to do with your annual salary discussions.

/30% if you're temporarily distressed.

For most people in the US, thats reasonable advice.  Where it falls apart is for low-wage workers in very expensive cities like NY, Boston, SF, DC, etc...


FTFY.

But maybe I'm not reading rumpelstiltskin's post right.

I'm reading "goods and services for consumption" as including rent, food, and utilities, as well as things like gas, DVDs, internet, etc..

If every American only spent 20%-30% of their income, the economy would grind to a halt.
2014-03-20 02:03:12 PM  
1 votes:

rumpelstiltskin: If you're a responsible adult and don't spend more than about 20% of your income on goods and services for consumption, then inflation and the CPI really shouldn't have much to do with your annual salary discussions.

/30% if you're temporarily distressed.


Just about any other time I'd agree with you - the issue is you have to have your needs met first. And the issue there is that not enough people are making enough to meet their needs. For myself I make 100k/yr. My needs are met at about 30% of what I make. Now for other people who might make 30k they are tapped out and living paycheck to paycheck. The issue comes down to what life decisions or circumstances trapped them in that income bracket. They may just be slightly smarter than a bowling ball and that could be their limiting factor. It could be education or an addiction. Any and all of these things may be in play but the bottom line is they will never get by on just 30% of their 30k income.
2014-03-20 02:01:30 PM  
1 votes:

rumpelstiltskin: If you're a responsible adult and don't spend more than about 20% of your income on goods and services for consumption, then inflation and the CPI really shouldn't have much to do with your annual salary discussions.

/30% if you're temporarily distressed.


For most people in the US, thats reasonable advice.  Where it falls apart is for low-wage workers in very expensive cities like NY, Boston, SF, DC, etc...
2014-03-20 01:55:41 PM  
1 votes:

rumpelstiltskin: If you're a responsible adult and don't spend more than about 20% of your income on goods and services for consumption, then inflation and the CPI really shouldn't have much to do with your annual salary discussions.

/30% if you're temporarily distressed.


Did you really just say that if you don't spend your money, you don't need a raise?
2014-03-20 01:40:24 PM  
1 votes:
Every year I've worked, at every job in my professional career, I have been given new responsibilities and tasks.

Every year, at every job in my professional career, I have been given a raise, because I don't work for assholes.
2014-03-20 01:06:35 PM  
1 votes:

Voiceofreason01: Besides, inflation costs an employee 2-5% per year, if the're not getting at least that much of a raise then they're essentially taking a pay cut.


Didnt you read what Send to Dave said?  You should magically eat that pay cut and be happy the Lords and Ladies are still paying you at all!

Meanwhile, not keeping wages steady with inflation costs taxpayers bookoo bucks in food stamps, EITC, etc etc...
2014-03-20 01:04:19 PM  
1 votes:

The Singing Bush: sendtodave: TheSelphie: I'm out if my boss doesn't give me a substantial raise after starting my pay under market and then giving me the standard, everyone gets it 2% increases after two years.  She knows this and I'm pretty much essential as far as she's concerned, but it's been a week since the discussion and I haven't heard anything.  When do I put up a racket, assuming I don't get a hard job offer from another company by then (I have a few prospects)?

Are you doing more than you were before to justify the pay increase?

Good.

Are you doing about the same amount of work as you were the previous year?  Then you should get paid the same as the previous year.

What, you think your labor is magically worth more or something?

Actually, yes it is.  Do you think recruiting, hiring, and training a new employee does not result in lost productivity?


For even the lowest level wage slave it costs the company(conservatively) thousands of dollars in time, productivity and direct costs to on-board a new employee. Besides, inflation costs an employee 2-5% per year, if the're not getting at least that much of a raise then they're essentially taking a pay cut.
2014-03-20 01:03:26 PM  
1 votes:

mjohnson71: From 2000 to 2007 it was this way at my work:
"Needs improvement" on review = 1% raise
"Meets requirements" = 2% raise
"Exceeds expectations" = 3% raise.

Then the Great Recession hit and in 2008 they changed the breaks to .5%, 1.25% and 2%. Then they took away all raises for '10 to '12. When they gave raises back in '13 you'd think the bosses were dying around here.

Yeah, it wasn't too different around here. Although for us pay raises were halted in 2008 due to the recession and that halt continued until recently. It wasn't until this year that we re-implemented raises, since we're now flooded with work and hiring like mad. I was psyched to get a 16% pay bump last month.
2014-03-20 01:03:14 PM  
1 votes:
If wages must be based on productivity, does that mean if you're the CEO of a company who's stock price goes down, you should pay the company for your lost value? Negative salary?
2014-03-20 12:57:27 PM  
1 votes:

Tricky Chicken: Tag line - Vanessa Merit Nornberg is the owner of Metal Mafia, a wholesale body and costume jewelry company located in New York City.

 Oh, so you sell crap imitation jewelry! Please tell me more of how you have solved the entire employee employer relationship.


Oh, it gets better!

http://www.inc.com/profile/metal-mafia">http://www.inc.com/profile/m etal-mafia

She is the CEO of a company of a whopping 14 employees! That is over a dozen people!

My niece has this kit where she makes some beaded jewelry.  I think she has more that 14 friends that do the same.
2014-03-20 12:51:09 PM  
1 votes:
Tag line - Vanessa Merit Nornberg is the owner of Metal Mafia, a wholesale body and costume jewelry company located in New York City.

 Oh, so you sell crap imitation jewelry! Please tell me more of how you have solved the entire employee employer relationship.
2014-03-20 12:49:20 PM  
1 votes:

TheSelphie: Should also probably add I'm about 30-40% under market currently  It was less when I started working here because I didn't have the two additional years of experience.  Still, I am a goddamn sucker for accepting it in the first place, and I'm kicking myself right now for it.


It's OK to have a frank discussion with your manager about your salary. If you feel like you're underpaid or that you're doing more than the job you were initially hired for then you should talk to your manager about it. I'd save the ultimatums for when it becomes a real problem and don't assume that your manager knows that you're dissatisfied unless you've talked to them about it.
2014-03-20 12:47:30 PM  
1 votes:
Wages must be based only on productivity.


Wages are so far disconnected from anything based on something concrete like productivity that it's not even funny. Wages are overall set at the market level. How does one determine what the market is paying? You buy salary surveys from consulting companies (Towers Watson, Aon Hewitt, Mercer etc.) Then your name and job title/job code are taken from your companies HR database and matched to the market based on vague factors like job descriptions. Comp people are lazy, so they're more than likely just matching the job by title. Then they aggregate the data, and set "market appropriate" pay ranges for the jobs. Doesn't matter if the place would farking sink without you, you're probably not going to get above market value. Sure you might get a decent raise, but it will still be within the pay range set by the surveys.

Executives love these surveys too. It's much easier to have the exec comp team go to the board with your huge pay increase when they can point to the surveys and emphatically declare that the market has spoken and that they have to give them the monies because other CEOs are being paid that amount and they'll be damned if they're not worth at least as much as that other guy.
2014-03-20 12:44:32 PM  
1 votes:
and that article neatly puts a bow on whats wrong with the world.
You are not a person you are simply a cog in a machine that is valued by how well you perform your job. You no are no longer a person you are a job.
2014-03-20 12:43:45 PM  
1 votes:
i.imgur.com

Anyone taking bets on whether he's using the red line or the blue line?
2014-03-20 12:41:46 PM  
1 votes:
"...social constraints should never be a part of the equation.  Output is what matters." - said the CEO of the company with the most dissatisfied, disloyal employees ever.

And he wonders why he has a problem with recruitment and retention.

Do we have a "death pool" equivalent for companies likely to have a disgruntled employee shooting incident?
2014-03-20 12:37:44 PM  
1 votes:
My annual raise is determined by someone in another country who has never met me.
2014-03-20 12:24:52 PM  
1 votes:
I wish I could automatically kick my hourly rate up 3-5% annually. My clients would never go for that though.
2014-03-20 11:50:01 AM  
1 votes:
"The Annual Pay Raise Is Dead. Here's Why I'm Not Mourning." or: how I learned to stopped worrying and love farking over my employees.
 
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