2012 Edition: What's your raise this year?

User Forum Topic
Submitted by flu on February 16, 2012 - 7:51am

We use to do this... Are you guys seeing employers giving more, giving less or about the same.

I'll start.
1)Side gig... I didn't give myself a raise this year.

2)In my full time rat race..4% bump,8% bonus cash bonus, and $80k worth of equity that now takes 4 years to vest, so I guess you can say that's about a $20k equity bonus per year. Looks like my bonus was cut in half, the equity was about the same and the base pay raise was about the same.

Submitted by SK in CV on February 16, 2012 - 8:17am.

I have a question. Your question begs the question (in the classic sense), by presuming that everyone gets a raise every year. In the industry I've worked in for more than the last decade, nobody gets a raise every year. Almost everyone's comp is based on very objective metrics. Bill more, get paid more. Increased technical skills lead to higher billing rate, leads to higher variable compensation.

So my question is, do you think that another year on the job is a good reason for an employer to pay more for the same services? Shouldn't raises (and compensation in general) be based on more objective measurements, like merit, performance, absolute value, and capped by comparable rates and conditions within the market place?

This presumption that another year on the job is good cause for a raise, absent other measurements, bugs the hell out of me.

Submitted by flu on February 16, 2012 - 8:30am.

SK in CV wrote:
I have a question. Your question begs the question (in the classic sense), by presuming that everyone gets a raise every year. In the industry I've worked in for more than the last decade, nobody gets a raise every year. Almost everyone's comp is based on very objective metrics. Bill more, get paid more. Increased technical skills lead to higher billing rate, leads to higher variable compensation.

So my question is, do you think that another year on the job is a good reason for an employer to pay more for the same services? Shouldn't raises (and compensation in general) be based on more objective measurements, like merit, performance, absolute value, and capped by comparable rates and conditions within the market place?

This presumption that another year on the job is good cause for a raise, absent other measurements, bugs the hell out of me.

I guess for me, since I work in a for profit business, that is completely dependent on consumers, and since this year my company has reported yet record profits again, and that the company's performance considerably better than last year, and that since it's competitors and peers have been reporting similar successes...And a lot of it was directly or indirectly tied to the division I'm in, and specifically the projects my team has worked on...

I would say, yes I do expect raises/bonuses/incentives to be distributed this year and every year the company is profitable to folks/group in the company that was considered a top performer (which I was), ...Otherwise, frankly, folks like me would just walk over to another similar companythat does the same thing that is appropriately compensating...And probably get a 10-20% bump just by switching itself...Because some folks generally can do that.

I wouldn't know how I would feel if I worked for a non-profit company...But then again, I don't think I would.

Submitted by harvey on February 16, 2012 - 8:28am.

Quote:
This presumption that another year on the job is good cause for a raise, absent other measurements, bugs the hell out of me.

Here's a little gem that I heard from a colleague years ago:

There is a difference between having ten years of experience, and having one year of experience repeated ten times.

Submitted by flu on February 16, 2012 - 8:28am.

pri_dk wrote:
Quote:
This presumption that another year on the job is good cause for a raise, absent other measurements, bugs the hell out of me.

Here's a little gem that I heard from a colleague years ago:

There is a big difference between having ten years of experience, and having one year of experience repeated ten times.

Your friend would have been fired from a high tech position long time back. because he would have been outdated the 2nd year.

Submitted by ocrenter on February 16, 2012 - 8:31am.

$1000 per month increase.

Submitted by harvey on February 16, 2012 - 8:35am.

flu wrote:
Your friend would have been fired from a high tech position long time back. because he would have been outdated the 2nd year.

flu, Read it again and think about it.

Do I really have to 'splain it to you?

(Funny, my friend is now a VP/CTO at AMD, and is now moving to San Diego to take an executive position at a large semiconductor company - can't say the name, but can you guess? - I'll be posting a "Recommendations on where he should live" thread shortly...)

Submitted by flu on February 16, 2012 - 8:37am.

pri_dk wrote:
flu, Read it again and think about it.

Do I really have to 'splain it to you?

(Funny, my friend is now a VP/CTO at AMD, and is now moving to San Diego to take an executive position at a large semiconductor company - can't say the name, but can you guess? - I'll be posting a "Recommendations on where he should live" thread shortly...)

oops. brain fart.. sorry about that..yes I get it...I misread what you said...Idiot, FLU... But now that you mentioned AMD, I can't help but chuckle at the irony.

Submitted by UCGal on February 16, 2012 - 8:39am.

No clue on raises. We're being acquired and they may use that as an excuse not to give any raises. After a few years of frozen pay - they did give raises last year... and my division is profitable and my review was decent... so hopefully I'll get something.

Merit bonus will be typical according to a formula based on pay grade and review performance. My division did well - but we'll be hammered by the other division's losses. Somehow they always turn the "green lights" reported by the third quarter into "red" or "Yellow" stop lights for the year. I'm skeptical of how they determine this stuff. But I should get something... Nominally about 10%. It's not distributed till June, though.

Equity grants - they changed the distribution for that last year - now you have to be a "chosen one" to get any. It used to be a pretty standard part of our total compensation... Not anymore.

Submitted by The-Shoveler on February 16, 2012 - 8:39am.

First: Doesn’t anyone get a cost of living wage increase anymore?

Of course I mean everyone knows there is no plan to keep interest rates at 2% while inflation is 4% or anything like that so there is no cost of living increase really.

Ok end sarcasm.

Got 4% last year , expect 4% this year as well.
not counting stock options.

Submitted by kev374 on February 16, 2012 - 9:20am.

I haven't got a raise since 2007, I work in IT as a Sr. Software Consultant.

Actually the contracts rates have plummeted around 10% since '07 but somehow I have managed to hold on to what I was making BUT that means in REAL terms my pay has actually fallen 10-20% in the last 4 years.

THANK off shoring and L1 visa abuse for that. The problem is getting worse with IT wages falling and the HUGE influx of cheap L1 labor, the government does nothing about this.

The lucky ones are the full time employees of companies that have managed to avoid layoffs, they have gotten cost of living raises over the years and it's become so out of wack that at the company I work the total compensation package of full timers now exceeds what consultants make!

Submitted by sdrealtor on February 16, 2012 - 9:19am.

I'll tell you on 12/31/12 when I know

Submitted by dumbrenter on February 16, 2012 - 9:35am.

I pay IT consultants for their services and always thought their rates are too high for what they do. The worst are the IT service companies.
Agree about rates plummeting since '07 but I am not complaining.
I know it is not a politically correct thing to say these days, but I wish the government does nothing about it. Actually, I am betting on MSFT, GOOG, QCOM and AAPL lobbying to make sure government does nothing about it.

kev374 wrote:
I haven't got a raise since 2007, I work in IT as a Sr. Software Consultant.

Actually the contracts rates have plummeted around 10% since '07 but somehow I have managed to hold on to what I was making BUT that means in REAL terms my pay has actually fallen 10-20% in the last 4 years.

THANK off shoring and L1 visa abuse for that. The problem is getting worse with IT wages falling and the HUGE influx of cheap L1 labor, the government does nothing about this.

The lucky ones are the full time employees of companies that have managed to avoid layoffs, they have gotten cost of living raises over the years and it's become so out of wack that at the company I work the total compensation package of full timers now exceeds what consultants make!

Submitted by Rich Toscano on February 16, 2012 - 9:58am.

SK in CV wrote:
I have a question. Your question begs the question (in the classic sense), by presuming that everyone gets a raise every year. In the industry I've worked in for more than the last decade, nobody gets a raise every year. Almost everyone's comp is based on very objective metrics. Bill more, get paid more. Increased technical skills lead to higher billing rate, leads to higher variable compensation.

So my question is, do you think that another year on the job is a good reason for an employer to pay more for the same services? Shouldn't raises (and compensation in general) be based on more objective measurements, like merit, performance, absolute value, and capped by comparable rates and conditions within the market place?

This presumption that another year on the job is good cause for a raise, absent other measurements, bugs the hell out of me.

The cost of living goes up every year (even in calendar years 2008 and 2009 the cost of living went up). So if you didn't get a raise in a given year, your compensation has actually declined.

Submitted by sdrealtor on February 16, 2012 - 10:39am.

But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.

Submitted by ocrenter on February 16, 2012 - 11:17am.

sdrealtor wrote:
But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.

ultimately that's the downfall of the public sector. the pay increases are all set in stone, regardless of performance.

Submitted by AN on February 16, 2012 - 11:28am.

I won't know til 12/31/12, but if it's anything like last year, I expect to see 3.5-4% raise, 15-20% cash bonus, and 15-20% equity bonus vested over 3 years.

Submitted by harvey on February 16, 2012 - 11:36am.

ocrenter wrote:
ultimately that's the downfall of the public sector. the pay increases are all set in stone, regardless of performance.

Getting raises when everybody else is not?

Doesn't sound like much of a downfall.

Submitted by SK in CV on February 16, 2012 - 12:18pm.

Rich Toscano wrote:
The cost of living goes up every year (even in calendar years 2008 and 2009 the cost of living went up). So if you didn't get a raise in a given year, your compensation has actually declined.

Not exactly. If your pay stays the same, then your pay stays the same. The purchasing power of that compensation goes down. That's not necessarily the same as a cut in pay.

The thing is, if an employer doesn't raise prices (or in the case of industries like tech consulting, where rates actually have fallen), then there has been no inflation in value. Should employers in industries similarly situated be obligated to give cost of living raises? Ultimately, market conditions rule. I'm just not convinced there's any logic to automatic raises, just because another year has passed.

Submitted by ocrenter on February 16, 2012 - 12:26pm.

pri_dk wrote:
ocrenter wrote:
ultimately that's the downfall of the public sector. the pay increases are all set in stone, regardless of performance.

Getting raises when everybody else is not?

Doesn't sound like much of a downfall.

downfall as in it being the ultimate reason why the public sector tend to fail the public it serves. not downfall for the pulbic sector employees.

Submitted by Hobie on February 16, 2012 - 12:37pm.

I think the thinking behind annual raises is to retain employees. Cheaper to pay this than to find/train/retain new hires.

That said, I am a firm believer in pay based on value returned to the employer, which is always a variable, thus a negotiable. Even with commissions, the structure is a moving target.

Now if you want to get into an argument with a public sector person, mention a performance base pay scale or a voucher system for educators. Smile.

Submitted by Rich Toscano on February 16, 2012 - 1:39pm.

SK in CV wrote:
Rich Toscano wrote:
The cost of living goes up every year (even in calendar years 2008 and 2009 the cost of living went up). So if you didn't get a raise in a given year, your compensation has actually declined.

Not exactly. If your pay stays the same, then your pay stays the same. The purchasing power of that compensation goes down. That's not necessarily the same as a cut in pay.

I strongly disagree.

You are trading your labor for the ability to buy stuff. Or specifically, an hour of labor allows you to buy a certain amount of stuff. Dollars are just a medium of exchange in this transaction. If you do the same amount of work, but are compensated with the ability to buy less stuff, then your compensation has declined. The fact that you got the same amount of (now less valuable) dollars doesn't change that fact.

For the record, I am not arguing that anyone should get automated pay increases. I'm just pointing out the fact that if your nominal pay did not increase in a given year, your real compensation actually dropped.

Submitted by harvey on February 16, 2012 - 2:15pm.

Is this an argument about semantics?

;-)

Submitted by SK in CV on February 16, 2012 - 4:15pm.

pri_dk wrote:
Is this an argument about semantics?

;-)

Pedantically speaking.....yes. And I resign :)

Submitted by kev374 on February 16, 2012 - 7:25pm.

dumbrenter wrote:
I pay IT consultants for their services and always thought their rates are too high for what they do. The worst are the IT service companies.

What exactly do you mean by "What they do", IT is a HUGE field, some professionals are worth their weight in gold, others not so much and are indeed overpaid but that can be said for any field. Why do lawyers charge $200/hr to file paperwork? Why do real estate agents make 3-6% per deal, which amounts to tens of thousands, for work that *I* personally think is ridiculously easy. Is driving guests to a house and blabbering about it's features worth a $15,000 commission? Exactly!

Secondly, IF you think their rates are too high then why aren't you getting cheaper folks? It's the open market right? You are not paying these "too high" rates because of your generosity correct?

There is an old adage...you get what you pay for ;) I know some ignorant people in management think that Software Engineers are nothing but glorified typists and these are the folks that waste millions trying to cut costs by sourcing underqualified and cheap resources resulting in wasted efforts... bottom line, there is NO free lunch! Many learn this the hard way!

Submitted by CA renter on February 17, 2012 - 1:45am.

ocrenter wrote:
sdrealtor wrote:
But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.

ultimately that's the downfall of the public sector. the pay increases are all set in stone, regardless of performance.

I'm pretty familiar with a number of public employers and their compensation numbers. Of the ones I'm familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.

Submitted by CA renter on February 17, 2012 - 1:51am.

CA renter wrote:
ocrenter wrote:
sdrealtor wrote:
But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.

ultimately that's the downfall of the public sector. the pay increases are all set in stone, regardless of performance.

I'm pretty familiar with a number of public employers and their compensation numbers. Of the ones I'm familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.

To your point about merit-based pay, though public employees are paid on the same scale, those who work more hours, have more training, education, etc. tend to get paid more.

It depends on the particular employer and type of position, but the best employees are usually paid the most because they are also the ones who tend to get promoted. There is less nepotism/favoritism in public employment, so the ones who get promoted (not including political offices) are usually the the best employees, and are paid more as a result.

Submitted by ucodegen on February 17, 2012 - 2:25pm.

Rich Toscano wrote:
I'm just pointing out the fact that if your nominal pay did not increase in a given year, your real compensation actually dropped.

Provided that there was inflation during that year. If there was deflation, then their compensation increased - the dollar bought more.

Submitted by ocrenter on February 18, 2012 - 1:25am.

CA renter wrote:
ocrenter wrote:
sdrealtor wrote:
But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.

ultimately that's the downfall of the public sector. the pay increases are all set in stone, regardless of performance.

I'm pretty familiar with a number of public employers and their compensation numbers. Of the ones I'm familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.

But that's looking at a short term deviation from the norm secondary to budgetary crisis at all levels of government. Overall, the government employees are significantly overpaid.

http://www.bls.gov/news.release/pdf/ecec...

Submitted by CA renter on February 18, 2012 - 3:36am.

ocrenter wrote:
CA renter wrote:
ocrenter wrote:
sdrealtor wrote:
But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.

ultimately that's the downfall of the public sector. the pay increases are all set in stone, regardless of performance.

I'm pretty familiar with a number of public employers and their compensation numbers. Of the ones I'm familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.

But that's looking at a short term deviation from the norm secondary to budgetary crisis at all levels of government. Overall, the government employees are significantly overpaid.

http://www.bls.gov/news.release/pdf/ecec.pdf

Where does it say that?

From your link, on page 4:

"Comparing private and public sector data
Compensation cost levels in state and local government should not be directly compared with levels in
private industry. Differences between these sectors stem from factors such as variation in work
activities and occupational structures. Manufacturing and sales, for example, make up a large part of
private industry work activities but are rare in state and local government. Professional and
administrative support occupations (including teachers) account for two-thirds of the state and local
government workforce, compared with one-half of private industry."

------------------

Here are some articles and studies regarding compensation in the public vs. private sectors:

http://abcnews.go.com/blogs/politics/201...

And this more "mixed" analysis from the Reason Foundation -- hardly a "liberal" or "pro-union" organization:

http://reason.org/news/show/public-secto...

And from Mother Jones (to get all sides in here), another "mixed" bag:

http://motherjones.com/kevin-drum/2012/0...

------------------

One comment I have to make about the higher pay for the jobs with fewer degree requirements -- many of which are public safety jobs -- there are no similar jobs in the private sector with which to compare them.

Not only that, but they mention the much lower turnover rate in many public sectors jobs; this is very important to public employers. The (necessarily) bureaucratic hiring process and extensive initial, and ongoing, training required for these employees is VERY expensive. They cannot afford to have high turnover rates. IMHO, even if they were to go to defined contribution plans (as many suggest), I don't think they'd end up saving very much (anything?) in the long run. One of the main reasons people are attracted to these jobs is the benefits packages. Take that away, and the turnover rates -- and related costs -- would be much, much higher.

Submitted by blahblahblah on February 18, 2012 - 7:26am.

dumbrenter wrote:
I pay IT consultants for their services and always thought their rates are too high for what they do.

Their rates seem high because:

* They pay DOUBLE SS/MDCR tax
* They pay for their own health insurance
* They pay for their own life insurance
* They don't get 401K matching from you
* They don't get any bonuses
* They don't get a yearly raise
* They don't get paid vacation
* You can get rid of them at anytime, and they may be unemployed for a period of time with no income
* They have a lot more paperwork and taxes to deal with at the end of the year.

With consultants you are paying for the convenience factor. My experience is that most of them do not make any more money than your typical 9-to-5 employee at the end of the day and many make less.

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