
Got 1.5% raise after a year at job. Now what? - tony2016
I am a software developer and I started work at a company and after a year got a raise of about 1.5%! Manager&#x27;s reason: company performance&#x2F;department performance. That&#x27;s lower than inflation. So basically my purchase power is less than last year.<p>Two questions: 
1- Do companies usually give a raise of at least the inflation rate or it&#x27;s whatever they feel like it even if it&#x27;s pretty low?<p>2- I feel I want to have a talk with my manager before the next year raise particularly saying I wasn&#x27;t happy with the earlier raise. 
How do I communicate to the manager that if the company is going to give low raises again, I am going to be pretty unhappy. I want to let him know that I will consider leaving the job without telling this directly to him.. or should I tell him? They like my work but I don&#x27;t know if I am dealing with a company that has the attitude of &quot;If you don&#x27;t like it, leave the company&quot;. It&#x27;s a big public company.<p>I like the company and it will be pretty hard to find something better. Better to me are a few things other than salary. My salary is above average and it will be hard to find companies with matching or better salaries. So I feel I am kinda stuck. I don&#x27;t want to move to another city. 
If they keep keep giving me such raises, I will feel they are using me.<p>What do you guys do in such situations?
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jotux
I'm on job #3 since graduating from college 10 years ago. The average raise
amount I've gotten each year staying at a job has been 3.7%. The average bump
in pay I've gotten changing jobs has been 15%. This is despite receiving an
excellent performance rating every year, for 10 years, at each of the jobs.
The reality of the job market today, especially at big public companies, is
that the framework in which they operate does not allow them to give large
awards to good performing employees.

Usually the only way to increase your pay is to get another job or threaten to
leave your job if you don't get a raise. Threatening to leave is generally a
one-shot deal and will probably paint a permanent target on your back.

My sad advice to maximize earnings is to stay at a job for 2-4 years then move
on for a 15-20% pay raise.

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marssaxman
Why do you feel sad about this advice?

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jotux
For a couple of reasons:

1\. You may find yourself doing work you enjoy and have a great boss but
realize the pay is no longer competitive (and has no potential to ever become
competitive). There's risk in leaving and landing in a place where the work
sucks and you make a lot more money, but is it worth it? It's sad to leave
work you enjoy knowing your boss desperately wants to reward high performers
but is stuck playing a shell game with an arbitrarily fixed award pool.

2\. I've come to realize that, even to engineering companies, doing good work
is rarely the thing that leads to rewards (promotions, bonuses, raises, etc.).
You'll do great work that is very valuable but watch some idiot politic his or
her way into a position of influence and get rewarded for it. I used to think
this was just an isolated incident but now that I'm on job #3 I understand
this is just how the world turns. So when you go to look for a new job to get
your 20% raise, unless you have a source to tell you how it really works on
the inside, there's no way of knowing if doing good work is the thing that
will be rewarded at this potential future job.

3\. If you're good at getting things done and leading others you'll inevitably
accumulate leadership tasks. So you'll be doing your work but also naturally
end up leading the team around you. Many companies have specific slots or job
titles allocated to "team leads" or similar. Unfortunately, these positions
rarely go to anyone who is new (<5 years at the company). Of course everyone
knows that it's rarely worth ($) staying at a job for more than 2-3 years, so
who gets the leadership positions?

People who:

(1) Stay because they like their job and don't care to make more money (these
people may or may not have any leadership ability)

(2) Want to leave to make more money but cannot find a job anywhere else

(3) Have some arbitrary characteristic, unrelated to actually doing any real
work, the current leadership finds very important (Example: The VP of a large
division wants more clout at conferences so they hire and promote PhDs into
leadership positions. Why? Because within their award framework the only way
to reward them is through promotions.)

This is sad because if you'd really like to stay in that "team-lead" position,
or move into project management, every time you take a new job you have to
start over. You get better at convincing your new boss/coworkers you're
capable of this work but it's difficult to go from engineer at one company to
team-lead at another. And realistically, if you never stay at a job for more
than a few years is it worth promoting you into leadership positions? It's a
catch-22.

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rubyfan
Step 1. Start quietly looking for another job that pays 20% more than you
currently make. You'll likely find something.

Step 2. Take the new job.

Rationale for not making a stink with your current employer or negotiating
with them once you have an offer:

1\. right now you likely feel some combination of under appreciated, used,
taken advantage of, etc. and that feeling likely won't change as time goes on.
You are likely not wrong for feeling that (even if you suck and are lucky to
not be fired). The compensation system didn't meet your expectations and there
is really no way to remedy that.

2\. Current company will likely not match a 20% bump and if they do it will
further the aforementioned feeling of being taken advantage of.

It's time to move on.

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jasonkester
You get raises in this industry by changing companies. Nobody will ever give
you more than a few percentage points as part of a standard end-of-year
review.

It sounds like you might not have known this before, so at least now you do.
It doesn't help to complain about it to your manager. They know what they are
doing. And they'll know why you left when you do.

If you are better now than you were when you started, then it might be time to
start interviewing. Take a new gig that pays more. Repeat every couple years
until your market value is where it needs to be.

It's a sad state of affairs, but in absence of any way to change it, the best
thing to do is act accordingly.

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sharemywin
Somebody up the food chain had xyz budget for raises. They made a spreadsheet
with 3 column last years salaries, 2% of that salary and new pay. hten they
started tweaking it. Well, I can't lose jim and he's in the top 1/3 pay band
he deserves 2.5 where's coming from? Peter going to fall below the 20% pay
band range so I need to give him 3% so he doesn't fall out of the range. Shit,
Tony's in the top band and he's doing pretty good so will give him 1.5%
that'll offset bigger raises for jim and peter.

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freehunter
I've taken similar pay cuts in the past. It does suck. The answer almost
always is to let your boss know (very gently) that you expected more. If they
say no, start looking (casually) for a new job. If you can find one that pays
more, either take it or show your boss the offer letter and ask for a better
raise. If you can't find one that pays better, then yeah, you're getting the
best you can. Either increase your skills and build your resume until you can
find one that pays better, or just figure out if money is the ultimate goal or
if there's something less tangible at the company that makes you happy.

I stayed with a company after they gave me a 0.25% raise in a year. I stayed
because I loved the company. As soon as that was not true, I started looking
for a place with a similar benefit package but a higher salary, and I found
one. Talk to your boss very casually. Don't demand more money, but let them
know you expected more and ask what you could do to earn a better raise in the
future. If there is nothing _you_ individually can do that will impact your
future earnings potential at the company, that company is just a short-term
step on your long-term career roadmap. Enjoy it while it lasts, and keep one
ear to the ground for better opportunities in the future.

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richardknop
Find a new job. Biggest raises I ever got were when I quit and looked for a
new job.

My second job after graduation actually meant almost 100% pay raise. After
that it slowed down but I still usually get extra 10-20% every time I switch
jobs.

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btian
Not sure if I understand your situation. You're both not happy with your
salary and you won't be able to get a job in another company that pays better.

I would be pretty happy if I were in your situation.

~~~
freehunter
A raise of 1.5% is basically a pay cut over last year. Sure he may be getting
overpaid compared to competitive salaries, but they offered him a certain
amount of money last year. This year they're basically paying him less than
they did last year.

It's completely possible to be overpaid and also unhappy with your salary.
Inflation exists, and nothing is immune from it. A pay cut is still a pay cut.

~~~
btian
Inflation was 1.3% last year. I wouldn't call a 1.5% raise pay cut.

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freehunter
Hm, you're right. I hadn't realized inflation was so low last year.

I stand corrected, but I think the (corrected) statement holds true. Maybe not
for this particular case, but if you get a raise that's less than inflation
(or no raise at all), you're taking a pay cut and have every right to be
upset.

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BryanBigs
I say this a bit tongue in cheek because a large Corp doesn't think like this,
but did you add more value to the firm in the past year than the first six
months? If not, why would you expect to get a raise above inflation? At
smaller firms if I had the work record to back it up raises were actually
negiotable. Bigger firms not so much. I once worked for a big bank. Before I
started outsiders told me 2 "law's" that ended up true. 1) Get paid as much as
you can up front because your pay will never change year to year by more than
4%. Starting salary is an anchor with very thick chain. 2) The severence
package is awesome than so old timers won't leave voluntarily. Made for a
really unhappy workforce. Good times.

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mahesh_gkumar
Raises are basically useless to depend on these days as a way of increasing
your income. In my 15 year career, I have seen an average of 2-3% raise and
the highest I have seen is 10% when I got promoted. The fact that your salary
is above average also plays against you, as most big companies have a formula
for raises that is based on local market salary for a similar role. If you
want to make more money, moving jobs, or getting promoted is the way to go,
not raises. Another thing to consider, you have been in this role for only 1
year. Establishing trust takes time. If you are a rockstar developer, ask for
more responsibility and get on the promotion track.

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SirLJ
If you are paid above average, it will be harder and harder to get big
raises...

So finding a new job that will pay 20% more is probably unlikely...

The question is do you like the people you work with, do you have fun at work?

If yes, try getting other benefits, like going often on paid
training/conferences to improve yourself, maybe company paid MBA or my
favorite: working from home - for me this and my team is what keeps me from
early retirement...

If you don't like it anymore, find another job, but the grass is not always
greener on the other side...

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vfulco
Universal law of employment: Unless you are a 10x developer, to get a decent
raise, you've got to switch companies. They'll squeeze you for every ounce of
work otherwise.

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wayn3
You have no BATNA, nobody is going to give you "what youre worth" (they
literally do exactly that)

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marssaxman
This is normal. Many employers never offer raises at all. Who cares? The real
raise will come when you take the experience you've gained and move on to your
next job. What's a few per cent here and there when your next job transition
will likely increase your salary by 10-50%?

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fhrow4484
Know the Numbers!

it's hard to find an answer to question 1, as those who know the answer don't
want to make it public, but my guess is it's "whatever they feel like"
depending on many factors. Those factors can be out of your control or not
(budget issues, crappy project where your skills didn't shine, or you
preferred taking it more easy because of your life choices)

If you salary is above average and you won't find companies with better
salaries, then you're probably one of the highest paid in town, you should
feel good about this. But if you know other companies around who pays better,
then one course of action is to apply to those in hope of a better salary. If
you have friends in those companies, try gathering information about their
past year raise and their salaries. Try gathering information about friends in
your current company too, but not close co-workers, as they might feel
uncomfortable discussing this. Instead, since you're in a big company, ask
people in a team far away from you, you don't need the exact number, but at
least an approximate that you can use in your talk with your manager. Try to
find the policy at your company, if they say somewhere (could be in your offer
letter) the yearly raise is between 0 and X%

Regarding question 2: yes you want to make it clear that you want a bigger
raise, but you don't want to appear greedy. You can mention cost of living in
your town, the raises that your friends in your company got, or it's even
better to mention the raises your friends got at the other companies, this
will give a cue to your manager that _you know_ you could get a better deal
somewhere else. Don't say "I want more money", but instead show that there's a
sound reasoning about why you want more money : The cost of housing is going
up significantly, you want to start putting money aside for a future down-
payment, inflation rate is X%, etc. Since you did a good job you think the You
today is a better asset to your company that You last year, because you now
have expertise in X, Y, Z, and delivered A, B, C ... , so you'd expect a raise
that reflect this, accounting for inflation of course. Assuming you know the
policy about raise between 0 and X%, and let's say last year you only got X/3%
, you could say that you've made a lot of progress this year, try to make your
manager acknowledge your accomplishments, and once he does, say that as an
above-average you expect at least X/2% given the annual raise policy is
between 0 and X%. Since inflation was pretty strong this year, you'd expect
even more to catch up.

Finally, you might find useful advice on how to approach these kind of
situation, better written, in the book "Getting to Yes"

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watter
Find a new job!

