Does your workplace do merit-based raises, and if so, how?

[midjd]

I've been with my (government) employer for 8 years next month and, during the several years we've gotten pay increases, they've been across-the-board. We don't have annual reviews. While I'm always happy for any increase in pay, I've often wished for more direct performance feedback and guidance (what can I say, I'm a millennial, LOL). 

Next year we're switching to merit-based raises based on metrics from an online performance management program. I went to the software training yesterday and it actually seemed pretty useful as far as being able to compile positive feedback in one place and make it visible to your supervisor. On the other hand, I could see how having an unplugged/uninvolved boss could work against you when it comes time for raises, even if you're otherwise a good employee. (Thankfully both my supervisors are awesome!) 

Do your employers offer merit-based raises? If so, how are they calculated, and do you agree or disagree with the metrics used? Just curious how other places handle raises, since this is really my first encounter with it... 

[NomoreDramaQ1015]

I have to do performance reviews and document every single thing I do all week but the state gets to determine what my raise is and it's across the board from faculty on down to the janitors..  I have the worst of both worlds.

If I get one more email about ow I should go "above and beyond" to "help the university achieve great heights!" I am going to find the person who created them and murder him.  I am tired of being told to give 120% without getting anything in return.

[hoops902]

We get merit based raises.  We also do annual reviews. Essentially the high-level of the merit based raises work like this:

-Company evaluates their financial year and provides a pool of funding for both merit-based raises as well as one-time bonuses.

-Managers evaluate their individual reports on a set of criteria and rate them.

-Each operational area (however they choose to define it that year) gets a pool of merit based raise money dependent upon their total salary and the operational area's performance.

-Managers/executives review ratings plus the current salary of folks compared to what they have determined to be the "market salary" of that position, and dole out merit raises based on that (so someone who is currently $5K below the market point is going to get more than someone who is currently $5K over the market point if they have the same rating).

The part that typically ends up causing issues is when people want to rate their employees as all being "above average" or worse "everyone is exceptional".  Then everyone thinks they're going to get big raises, but only because of the tendency to overrate everyone to spare feelings.  So now ratings have become a lot more structured too.  The top rating can only be given out to a maximum of 5% or something of a group's employees, then the next highest can only be X% max, etc.  It requires a lot of reassurances to employees who are used to being 5-star based on an overrating system that just because they're now 3-star it doesn't mean they're getting fired (or worse, 2-star).  I think our "meets expectations" rating is now a 3...and they push a lot harder on the criteria (used to be that giving someone a "meets expectations" meant you'd like to fire them if you could, it's not that way anymore).

[emma1420]

Kind of.  We don't have reviews, and we get a yearly increase at the end of the year.  However, you never know how it's calculated.  It can be anything from 1% to 5% if there is no promotion involved or 6% to 15% if a promotion is involved.

It's as clear as mud what the criteria is, and there is no differientiation between what is cost of living increases and merit increases.

[kcladyjane]

At my job you fill out a self review...then you either get a 2 or 3% raise....this year my manager didn't even meet with us to go over reviews.  He just called and told me my raise.    That actually makes me happy.  I don't enjoy the awkward review meeting.  I think the only way to get a significant raise is to change positions.

[alabamagal]

I've been in private industry for 30 years. 25 at large corporations. What hoops describes is pretty standard for large corporations.

After years dealing with performance reviews, I will say that there is a component you have control over and a part you don't. So sometimes things do not seem fair every year. If your whole site or division has a bad year that may be out of everyone's control, raises and bonuses may suck. Or if things are good, you benefit. If you are a good employee you will get good ratings, but maybe not the top every year.

At one place I worked, there was a manager for chemistry department who was a total ahole. He would call his employees dumb, stupid imbeciles all year long ( to their face even). Then at review time he would sit in a meeting and say they were top performers. Always got a good chuckle out of that.

[ArchietheDragon]

I work at a small/medium sized employer.  we do annual reviews and we can get merit based raises, but there is no checklist of metrics to hit in order to get those raises.  Recently the raises have been across the board cost of living type increases, with merit based raises given on a case by case basis.   

[Lizard Queen]

Every year, boss would reluctantly do a performance review at the last minute, or just say she didn't have time, but I knew I was doing a good job. 9 times out of 10, not a lot of money cause business wasn't great, so raises and bonuses were 2-3% except for once, one time I got a good raise, a couple times no raises, or temporary 10% across the board cut. Woohoo, good times!

[swasat]

Aug 30, 2017 12:10:33 GMT -5 hoops902 said:

We get merit based raises.  We also do annual reviews. Essentially the high-level of the merit based raises work like this:

-Company evaluates their financial year and provides a pool of funding for both merit-based raises as well as one-time bonuses.

-Managers evaluate their individual reports on a set of criteria and rate them.

-Each operational area (however they choose to define it that year) gets a pool of merit based raise money dependent upon their total salary and the operational area's performance.

-Managers/executives review ratings plus the current salary of folks compared to what they have determined to be the "market salary" of that position, and dole out merit raises based on that (so someone who is currently $5K below the market point is going to get more than someone who is currently $5K over the market point if they have the same rating).

The part that typically ends up causing issues is when people want to rate their employees as all being "above average" or worse "everyone is exceptional".  Then everyone thinks they're going to get big raises, but only because of the tendency to overrate everyone to spare feelings.  So now ratings have become a lot more structured too.  The top rating can only be given out to a maximum of 5% or something of a group's employees, then the next highest can only be X% max, etc.  It requires a lot of reassurances to employees who are used to being 5-star based on an overrating system that just because they're now 3-star it doesn't mean they're getting fired (or worse, 2-star).  I think our "meets expectations" rating is now a 3...and they push a lot harder on the criteria (used to be that giving someone a "meets expectations" meant you'd like to fire them if you could, it's not that way anymore).

Very similar for us too.

We do have to meet with our staff for quarterly reviews before we have the big, end of the year annual review. That annual review is a compilation of all quarterly reviews plus some.

[tractor]

We usually are given a standard across the board raise in the 2-3% range. Our supervisor has at his discretion that ability to adjust that up or down depending upon how he's feeling at the time. My old supervisor was an asshole at times and would deny you a raise based on some perception he had about you last week, even if you went above and beyond all year.

My new supervisor thinks were all underpaid and recommends larger increases, but most of the extra pay comes from changing job descriptions and/roles in the company.

[Ava]

We have reviews, the awkward conversation with the manager, and a merit raise.
The maximum raise you could theoretically get by being a superstar would be 4.5%.

I've gotten goods reviews and for a "good" worker - no superstar caliber-  the raises top at 3%.
The only way to significantly raise your income is by getting a promotion. That should net you a 15% to 20% raise by going one grade level above. In the last few years, however, the company mostly prefers to bring someone from outside. It's very difficult to get promoted. People mostly leave or stagnate.  I've applied for 4 internal jobs in the last 2 1/2 years and nothing. You see the jobs filled with external candidates.

My manager tries to compensate the low raises by giving me the best bonus he can.
I plan to leave this job in the next few months, and I am comfortable with my manager and my team, good work environment and a lot of flexibility, so I don't let the low raises bother me.

[Rob Base 2.0]

At my workplace you have to sleep your way to the top.....which is why I am so low on the totem pole......no one wants to sleep with me

[giramomma]

I'm in sort of the same boat as you,midjd. Our HR is looking at implementing merit based raises. I personally think they are moving to this system to try to make better use of scarce resources, and to retain folks.

In the last decade, I've received one 1% raise. (It was an across the board raise). I'm supposed to get a 2% raise this year, but our state still has not passed a budget.  In that decade, I've gone from just doing my job to doing the work of 4-5 people. I've also had very regular annual reviews. All very favorable.

At my place of employment, pay is not a measure of work out put...nor is it a reward for work output.

The culture has been like that, now for almost 20 years. Between the culture and sentiment with those who hold the purse strings...I don't think moving to merit based raises will put me in a better position than I'm in now. I don't think that I'll be rewarded for working hard and going above and beyond even with access to merit based raises.

[thyme4change]

Aug 30, 2017 14:29:48 GMT -5 Rob Base 2.0 said:

At my workplace you have to sleep your way to the top.....which is why I am so low on the totem pole......no one wants to sleep with me

Be more giving and generous in the sack.

[Anne_in_VA]

Our system is similar to what hoops described.  As far as I know, a manager can't give out a 4 rating (1 - 4 rank), unless you almost literally walk on water.  I don't know anyone who's gotten any better than a 3 and even that is very rare.  Even with a good review, each department is only allowed a set $ amount to give out in raises so most people get in the 1 to 2% range.  It doesn't seem to matter how hard you worked, the entire department only has so much to go around.  I work in a really small department so we each get about the same %.  Sucks, but it's what their supystem is.

[The Walk of the Penguin Mich]

Merit raises were a joke at the university.  They were included with COL raises (when we got them) and totally unfair.

We had annual reviews, and were rated in 6 categories 1-5.  The categories were those major job proficiencies that you and your boss came up with regards to your job, and they were weighted.  I used to get 5s, until they told my boss I had to walk on water without getting my feet wet to get them.  He would rate me as high as he could, but the most it would get me would be 1-2% above the COL.  So a person could get 2s across the board and they'd get 2% and a 4 would get 2.5-3%.  

Didn't really make it worthwhile to bust your butt.

[justme]

My experience is similar to hoops too. My last company did a compilation score of the general company wide areas and your specific goals based on weightings. So you could get a 3.15, 4.75, etc.

My current company doesn't do that. You still have the company areas and goals, but then you pick an overall score. No half ratings. They're also much less transparent on raises. My boss can say up the chain, hey they deserve a good raise, but at the end of the day what I get is based on at least two levels above him if not three which is up at the corporate level across the country.

[plugginaway22]

small employer, annual reviews, merit raises (35 employees)

[nittanycheme]

Enormous employer with a bunch of different sites.  Reviews at midyear and end of year, plus general feedback through year.  Its really the mid year that mostly sets your raise since the end of year stuff is due in October, although they are really supposed to evaluate you over the calendar year, so there is a lot of assumptions on what will get done in Nov and Dec.  Each area gets a certain percentage to give out, say 3%, and lower performers are supposed to get slightly less and higher ones slightly more.  I'm not sure if that is really the case.  I was a manager for 2 years, and no one actually got the target; even people who were "higher ranked".  We would rate people at the site, and then our ratings plus justifications would go up to the home office where they would compare all the sites and "level" the employee rankings using the justifications provided.  I also assume that maybe some sites got more of the $$ than others.  So, its part merit,and part COLA.  But really hard to tell what of each.  Although, I did get a really good raise for last year since my boss got a new job, and her boss left, and I ended up needing to do a bunch of each of their jobs since the other people at my level at my site had only been there a few weeks.  Crazy!

[Tiny]

Kind of. It's called Merit Based raises - but the amount of money and the actual % per person is usually decided by The Powers that Be 6 months before the annual performance appraisals happen. It's generally 2% to 2.5% per person. Each manager has some discretion on how they divvy up the money - so a manager could give some workers less $$ and give loads of money to their favorite or 'high performer' - but that doesn't go over well.

We use to have an informal yearly review system (cause everyone gets pretty much the same raise %) and no one wanted to spend a lot of time/effort on something that was mostly meaningless- but about 5 years ago we transitioned into a more formal system (I guess for the Warm Fuzzies it gives people) It doesn't really have anything to do with your raise - they say it does in a round about way - but really it doesn't.

That said, I've done my best to view the appraisal/review system as something 'good' and have tried to give it good info on what I've accomplished over the year. It can be helpful.

I know the youngsters seem to be more interested in filling out and updating their performance appraisals. The rest of us just find it a giant time suck.

FWIW: There has been some talk about creating a "pool of $$" that the managers could use to reward people who walked on water or who crapped gold. But, I don't think that has materialized.

[Ryan]

We have merit based increases, but it's not really merit based.  They'll allocate a set amount per department based on the pool that year, so it might be 3% of the Director's salaries for his/her area.  They then grade employees and then dish out the raises based on your performance.  If someone gets 4.0%, then someone else is only getting 2%.  It's not really merit based in the end because there are other factors that come into play, such as how much you are making for your particular job e.g. someone that is way at the top of the scale will not get as much as someone towards the bottom.

Some people like it, some people hate it.  Personally, I have gotten big raises on years where I've only "Achieved" results and others have gotten smaller raises when they have performed higher.  In the end, it really comes down to how much your boss values you.  Some of the things we end up getting graded can be chalked up to good/bad luck and the bosses know that, so they don't necessarily just dish out a big raise if they think you are a chump who just got lucky.

 

[quince]

WAAAY back in the day when I worked....

Annual performance evaluation was point based. Plugged into a formula that spat out what % of the maximum salary increase you would get. 0% wasn't a thing, and there was leeway for other bumps if needed.

Behind the scenes, there was definitely a maximum amount each department was expected to be able to give in raises, so things were tweaked before the final scores were shared with employees.

I did like the performance evaluation though. Just keeping tabs on the progress through the year. I think as a tool it's more of an evaluation of the department- if the goals weren't met it usually wasn't an employee issue- it was more of a "we had no idea what we would be doing in 6 months" issue.

[mroped]

I gave raise to the guys that showed potential as an encouragement some that didn't show any improvement over a period of time ( first 2-3 months) I told them that they either improve and make better money or they'd be stuck at the current pay rate forever in which case they might as well quit.
Its quite simple for me since they generaly work on the job alongside with me; you show me improvement and indirectly cover your expenses and make me money, you deserve a slice of that. I think it fair!
This year must be my unlucky year! So far, I had to let go of one of the two I hired in May, second one is just about to receive bad news- slump performance and "I don't really care" attitude.
Hired another one at the beginning of July that shows potential and is more or less running a job with my son. We'll have to see how he behaves in about a week and a half when he will be going with me on the job.
I am testing now another kid that worked with me on the job for two weeks and shows potential but he is a bit of a mystery. Very quiet, rarely smiles, does whatever I ask him and sometimes takes initiative and starts doing things that he'd seen me doing but I didn't really teach him yet. That would be all good and dandy except that there is a order in which we have to do things on the job to have good flow and if you jump the line then it might make it harder.
Id like to keep and train him. He's from a big family, has like 10 siblings and so on, no way to get on the job by himself, no drivers licence or vehicle so for the last couple of days he'd been staying with us.
 Were thinking of maybe have him every week for two or three days as long as his parents drop him off Sunday evening/ Monday morning and then pick him up 2-3 days later

[zibazinski]

DS and another key employee transferred out of a department because their supervisor had 20% to give out as raises so gave each employee 4%. The three that worked hard were furious to get the same as the two slackers. Good luck to that supervisor left with slackers. I'm sure the third one has gotten out by now.

[Deleted]

We supposedly get merit based raises, but I'm skeptical as it seems that most people always end up in the same 2-3% year range. 

[Anne_in_VA]

Sept 6, 2017 9:45:18 GMT -5 minnesotapaintlady said:

We supposedly get merit based raises, but I'm skeptical as it seems that most people always end up in the same 2-3% year range. 

[Bob Ross]

Most merit-based systems I've worked under have been incredibly lacking.  The issue generally was that you had to go extremely above and beyond to get the highest rating, which often only translated to a 0.5% higher raise than Joe Average.  So what's the point?

In my industry, the biggest raises are generally achieved by jumping ship for a new job.

[Anne_in_VA]

Often, people in my company change departments/jobs or jump to another company to get better pay.  I've seen instances where people left to go to another company and then came back a few years later at a higher level making a lot more money. 

[ArchietheDragon]

Sept 7, 2017 13:05:34 GMT -5 Bob Ross said:

Most merit-based systems I've worked under have been incredibly lacking.  The issue generally was that you had to go extremely above and beyond to get the highest rating, which often only translated to a 0.5% higher raise than Joe Average.  So what's the point?

In my industry, the biggest raises are generally achieved by jumping ship for a new job.

Agreed Who needs the union to be mediocre and get constant raises? Just join corp America

[Phoenix84]

I also have a government employer.

We changed to a (in theory at least) merit based system in March of last year.

Basically the principle is your performance should be tied to how much you earn, i.e. if you do X amount of performance that correlates to Y pay.  Your boss evaluates your performance and comes up (by some arcane method not made clear to us) a number that corresponds to how much you should be making based on your performance. So basically they compare what you make now to what you should be making based on your performance and if you earn less than what your performance indicates you get a raise. 

There appear to be other factors at play, they seem to still have vestiges of the GS system because you can't get too high of a raise too quickly, so they still throttle you back, so to speak regardless of how well you did.

Last year was my first year in the system.  I got a much smaller raise than anticipated, but during my performance review my boss had nothing but great things to say about me. I asked why the feedback I was getting didn't correspond to bigger raise and my boss agreed with me and mentioned the "throttling" issue I mentioned above. The fact that I had gotten a big raise the year before meant I was restricted this year. He recommended I appeal it so I did and I got a bigger raise.

We're about to write our own performance appraisals here for this fiscal year in the next couple of weeks.  There's rumors that we're going to switch to yet another merit based system in a year or two.