> Honestly a few percent raise a year for a competent programmer is insulting, assuming you're increasing your skill set all the time.
This is wishful thinking. Your skill set (learning new technologies + critical thinking) is unlikely to improve over time. Furthermore, you're constantly competing against new graduates in a world where your "skills" are a generic commodity.
The only skill you need is to read man pages. I don't think you'll become a better reader every year. But if you master this, you could change jobs tomorrow without worry about adapting.
If you're calling technological knowledge a skill, you've already lost.
> Honestly a few percent raise a year for a competent programmer is insulting, assuming you're increasing your skill set all the time.
Huh? Expecting raises of any sort from an employer is insulting to them, unless you're increasing the value you bring. There are loads of devs I know 'increasing their skills set' yet not bring any actual value to the business they're employed in. The two points can be quite orthogonal, and the business is really only going to care about what value you're bringing to the table.
"Additionally team and corporate culture are valueless, so retaining these things is unimportant."
Honestly I've never felt all that connected to any of the forced attempts to create a corporate or team culture where I've worked. I'd much rather be motivated by money.
Though I recognize that likely means I'm not an ideal employee.
I would argue any "forced attempts to create a corporate or team culture" signal poor culture. I've worked at "good culture" and "bad culture" places and the "good culture" places had events but they were never labeled as such - they were just "events".
Shocking that that doesn't work. And I don't understand how people take seriously the "need to be passionate about x industry". No, you just need to pay money and the employee needs to do acceptable work
That's a fundamental misunderstanding of what corporate culture means (and that misunderstanding is, in my experience, a sign that the culture is actually pretty bad). Comparing my previous and current positions, there's clear differences in what sort of behaviour is acceptable, what sort of behaviour is frowned upon, and what sort of behaviour is praised. This both in terms of the work product itself, and in the way we relate to each other as colleagues. I can also tell you in no uncertain terms that a culture I'm happy with is much stronger than money at producing the sort of motivation that keeps me producing "acceptable work".
De-sarcasming your comment, I get "Recruiting people is expensive and difficult, and maintaining company culture is important, therefore this proposal is a bad idea."
However, I don't see how the conclusion follows from your premise. Are you saying this idea would lead to recruiting difficulties, or that it would increase unintended turnover? Are you saying it would destroy company culture because of employee departures, or in some other way?
I think that this would increase the turnover of employees who are are not strongly motivated by reward vs. the current practice because the current practice is aimed at preventing reward from being a key issue. People join at a level that provides a lifestyle that they find liveable, they remain or try to upgrade. Those that remain are rewarded with the maintenance of their lifestyle and some small increments. If that goes then long term employees will see a decline of their lifestyle and likely will then be moved to churn.
In addition the provision of reward by bonus will increase competition between employees and corrode team relationships. That's fine for sales, where team is nowhere, but ruins everything else.
This article discusses the benefits of providing few significant raises to high performing individuals rather than a nominal raise to all.
From the employee's (my) perspective:
* If I get a small nominal pay raise, I might stick around for up to the rest of the year, depending on how recently I started at the company. I don't know if this is a good idea, but sometimes promotions and raises aren't on the same schedule.
* If I get no raise, I'll be leaving ASAP.
* If I get a significant raise, I'm more likely to stay stay until next year's raise.
Having nearly doubled my salary in a short time by "hopping" at good offers, there's little reason to stick around in companies that value manager bonuses over employee retention.
Additionally, in BigCo, metrics versus actual performance continues to be often a toss-up, at best, and not infrequently just wrong.
My stomach still clenches at the memory of managers greenlighting all the goals on their own performance reviews.
Basically, if they liked you, you "passed" your review. If they didn't, they'd find something or other to pick at.
The whole process was so weasel-ly, and in HR's pocket, that it was hard to find a place to start challenging it.
Manufacture paperwork to "substantiate" whatever result we've already picked.
P.S. If you start feeling this way about your own workplace, it is a primary sign to GTFO. Even if you are one of the "favored", if you're smart and a straight-shooter, you are not going to enjoy the dis-function around you.
I have never seen this be a serious consideration in this industry. IMO that is a fairly "old school" outlook. Anecdotally I have never had a job for more than two years and it hasn't been an issue for me yet.
An exception to this would be someone who has had a lot of contract work without a lot of FTE, that is definitely a red flag.
> I have never seen this be a serious consideration in this industry.
You've been lucky - I've been turned down for positions I was otherwise qualified for because of "too many job changes" (and yes, they told me so). I've also seen hiring managers (from the other side) not even consider resumes with too many jobs of too short a duration. I don't think it's the kiss of death, as long as you're competent; I've never been out of work, in spite of a four-year period where I held four different jobs, but it's worth keeping in the back of your mind.
That is almost a bigger warning sign than listing your multiple jobs. It certainly isn't an effective way to 'fool' any reasonably competent hiring manager.
I agree. I realize that I'm in a field (software development) that is still a great market and this strategy might not apply everywhere but I do believe there are a lot of other industries where this attitude can still work. Most of my "non-tech" friends just don't try to look for other opportunities. I don't know the reason. Possibly my anecdotal experience is just full of outliers? Or is that in general, the software industry "culturally" breeds workers that value their own work more than the average worker. Or is it simply that as a software developer, I am sent requests from recruiters for new jobs on a near daily basis.
"For most of us, yearly pay raises are a fixture of corporate life"
Was this article written in 1955 and then accidentally drawn out of the archives and posted in 2016? The annual pay raise died a few decades ago. There were countless articles about it. You can go back and re-read early issues of FastCompany, from the 1990s, where they talk about "you" the worker needs to make themselves essential to the company, because annual raises are dead and only real promotions bring real money any more.
And of course, at some point there emerged in the USA the odd habit of top managers, such that to get a pay increase an employee needs to quit and go elsewhere, or at least has to get a real offer from somewhere else, and only then will "your" company give you a pay increase, to match that competing offer.
UK here - agreed. I don't know anyone working at a corporation where annual raises aren't a thing, they might be small(3-4% if you aren't doing well on your performance review) but they almost seem mandatory.
UK as well, pay raises have fluctuated between 1.5% and 15% during my career. Only one year (2009) did I not receive a raise and that was down to the small agency I was working for at the time having a mortgage lender as a primary client. Not the easiest of years for them.
AFAICT, despite the hype, it really didn't, it just became less significant.
> You can go back and re-read early issues of FastCompany, from the 1990s, where they talk about "you" the worker needs to make themselves essential to the company, because annual raises are dead and only real promotions bring real money any more.
Its true that in private industry, reliable annual increases that are much greater than inflation (and so represent real advancement) are far less common than they used to be. They still happen in some places where people advance within broad pay bands without a change of position or title, so it isn't strictly the case that all real (significant) pay increases come from promotions, but its not a bad approximation.
But even so, annual nominal pay increases that are at least near or slightly higher than inflation seem to remain common in private industry.
I think it's safe to say that whether annual pay raises died or not depends highly on the company/industry/country. I'd say it's been a thing at maybe 50% of the (U.S.) companies I've worked.
Everywhere I worked at in the past 20 years - from startups to fortune 50 companies this was/is a thing.
Large companies do this "by the book" with HR-imposed bell curve type quotas (that they are trying hard to hide) with ~80% of the employees getting an average rating/raise, ~10% getting below average rating/raise, "top" 10% or so - getting a higher but also capped raises.
Smaller/less "formal" companies tend to reward/"punish" (you're still getting a raise but it's small) based on individual contributions.
So yes this is definitely a reality of the "corporate life".
depends on if there is still inflation. I'd say the Weimar Republic had a worsening economy, but when you need a wheelbarrow of money to buy a loaf of bread, raises should probably be given, lest your employees become bakers...
I have had some 0% years during the early 2000's. A couple times I've seen companies slash 5% across everyone to not do layoffs. Just nit happening right now in the US, enjoy the good times while they last!
Any year that the purchasing power of the currency in which you are being paid goes down, and in which you don't get a raise to accommodate that loss ("cost of living raise" or whatever), you have effectively been given a cut in pay.
I can't speak to other countries, but the USD is intentionally inflated as a matter of monetary policy and it has done so consistently in good times and bad for my entire adult life (I'm over 40)[1]. If the company is not doing well, and they choose not to give me a raise each year, that is still an effective cut in pay so long as the consumer price index is rising. Your reaction to that is yours to make, but you need to recognize it for what it is.
Bonuses aren't taxed higher. They are, when paid separately, subject to a different (flat) withholding rate, which is often higher than your average withholding rate and, when paid together, they are subject to a higher withholding rate than your average withholding rate because regular withholding rates are shaped by progressive tax structure.
They are actually just regular taxable income, and are taxed exactly the same as additional non-bonus income.
First of all, cost of living goes up gradually, so at the very least, it makes sense to have your satisfactory performers not literally lose purchasing power in their base salary year to year. Or if that's not compelling because a corporation doesn't concern itself with its employees' finances, at the very least, it should be tracking the market, which is liable to change from year to year.
When it comes to me, policy is whatever; at the end of the day, no matter how my comp package is arranged, I'll be looking after my bottom line. If I'm not happy, I'm confident in my ability to seek a better deal. I'd have to really believe bonus-based comp is likely to work out in my favor, at least on the timescale of a few years. Longer than that, it's not appealing, due to the lack of compounding of bonuses.
But I feel like as a developer, I'm a bit insulated from concerns of the mainstream labor market. I just worry that for people without a whole lot of mobility, this is just another step toward institutionalizing wage stagnation.
> Moreover, managers are reluctant to increase base pay further because higher payroll costs could result in heftier prices for customers, says Tom McMullen, a senior compensation partner with Korn Ferry Hay Group.
That x% inflation increase is already what most employers have right now. I get a ~3% raise every year in November, my manager has the ability to +/- it to distribute the total allocation based on merit to an extent, but everyone gets roughly between 2.5-3.5% which keeps up with inflation - this is fairly standard practice from what I've seen.
I can't speak for other large corporations but Oracle does not follow this practice. My experience with small businesses (which employ more Americans than large corporations) is that they too have not followed a practice of guaranteeing a minimum wage increase every year to keep pace with inflation.
This probably works for C-levels, but for rank and file up to first and second level manager it's just more friction in the job search and recruiting areas. Because now, besides salary, you have to negotiate bonuses.
B.F. Skinner has demonstrated in his famous experiments that animals react much stronger to rewards that are highly unpredictable. Recently this principle has been applied with much success to the design of addictive online games. Time to apply the same principle to employee motivation?
If you want people to not always be looking around to hop to the next salary tier, then ideally people's salary should be ratcheted yearly to "what they could get elsewhere", not blindly based on some simplistic formula like starting * 1.xx^year + performance. Labor is a market just like any other service, and prices (compensation) are set by what the market can bear.
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[ 4.0 ms ] story [ 69.4 ms ] threadAdditionally team and corporate culture are valueless, so retaining these things is unimportant.
Finally we can observe that consultants and executives are the fundamental creative loci in our economy.
Otherwise, people may think you honestly believe what you say.
Honestly a few percent raise a year for a competent programmer is insulting, assuming you're increasing your skill set all the time.
This is wishful thinking. Your skill set (learning new technologies + critical thinking) is unlikely to improve over time. Furthermore, you're constantly competing against new graduates in a world where your "skills" are a generic commodity.
Good luck.
IMO, being a commodity ain't so bad.
If you're calling technological knowledge a skill, you've already lost.
Huh? Expecting raises of any sort from an employer is insulting to them, unless you're increasing the value you bring. There are loads of devs I know 'increasing their skills set' yet not bring any actual value to the business they're employed in. The two points can be quite orthogonal, and the business is really only going to care about what value you're bringing to the table.
Honestly I've never felt all that connected to any of the forced attempts to create a corporate or team culture where I've worked. I'd much rather be motivated by money.
Though I recognize that likely means I'm not an ideal employee.
Shocking that that doesn't work. And I don't understand how people take seriously the "need to be passionate about x industry". No, you just need to pay money and the employee needs to do acceptable work
However, I don't see how the conclusion follows from your premise. Are you saying this idea would lead to recruiting difficulties, or that it would increase unintended turnover? Are you saying it would destroy company culture because of employee departures, or in some other way?
I think that this would increase the turnover of employees who are are not strongly motivated by reward vs. the current practice because the current practice is aimed at preventing reward from being a key issue. People join at a level that provides a lifestyle that they find liveable, they remain or try to upgrade. Those that remain are rewarded with the maintenance of their lifestyle and some small increments. If that goes then long term employees will see a decline of their lifestyle and likely will then be moved to churn.
In addition the provision of reward by bonus will increase competition between employees and corrode team relationships. That's fine for sales, where team is nowhere, but ruins everything else.
From the employee's (my) perspective:
* If I get a small nominal pay raise, I might stick around for up to the rest of the year, depending on how recently I started at the company. I don't know if this is a good idea, but sometimes promotions and raises aren't on the same schedule.
* If I get no raise, I'll be leaving ASAP.
* If I get a significant raise, I'm more likely to stay stay until next year's raise.
Having nearly doubled my salary in a short time by "hopping" at good offers, there's little reason to stick around in companies that value manager bonuses over employee retention.
My stomach still clenches at the memory of managers greenlighting all the goals on their own performance reviews.
Basically, if they liked you, you "passed" your review. If they didn't, they'd find something or other to pick at.
The whole process was so weasel-ly, and in HR's pocket, that it was hard to find a place to start challenging it.
Manufacture paperwork to "substantiate" whatever result we've already picked.
P.S. If you start feeling this way about your own workplace, it is a primary sign to GTFO. Even if you are one of the "favored", if you're smart and a straight-shooter, you are not going to enjoy the dis-function around you.
Watch out, though, because there's a catch-22: if you hop too many times, you can end up being rejected for too many hops.
An exception to this would be someone who has had a lot of contract work without a lot of FTE, that is definitely a red flag.
You've been lucky - I've been turned down for positions I was otherwise qualified for because of "too many job changes" (and yes, they told me so). I've also seen hiring managers (from the other side) not even consider resumes with too many jobs of too short a duration. I don't think it's the kiss of death, as long as you're competent; I've never been out of work, in spite of a four-year period where I held four different jobs, but it's worth keeping in the back of your mind.
Or just put down a large early timeperiod as "software engineer" without elaborating on it to much, and only focus on recent experience.
Was this article written in 1955 and then accidentally drawn out of the archives and posted in 2016? The annual pay raise died a few decades ago. There were countless articles about it. You can go back and re-read early issues of FastCompany, from the 1990s, where they talk about "you" the worker needs to make themselves essential to the company, because annual raises are dead and only real promotions bring real money any more.
And of course, at some point there emerged in the USA the odd habit of top managers, such that to get a pay increase an employee needs to quit and go elsewhere, or at least has to get a real offer from somewhere else, and only then will "your" company give you a pay increase, to match that competing offer.
This is the first year in my 14-year career I did not get an annual raise.
AFAICT, despite the hype, it really didn't, it just became less significant.
> You can go back and re-read early issues of FastCompany, from the 1990s, where they talk about "you" the worker needs to make themselves essential to the company, because annual raises are dead and only real promotions bring real money any more.
Its true that in private industry, reliable annual increases that are much greater than inflation (and so represent real advancement) are far less common than they used to be. They still happen in some places where people advance within broad pay bands without a change of position or title, so it isn't strictly the case that all real (significant) pay increases come from promotions, but its not a bad approximation.
But even so, annual nominal pay increases that are at least near or slightly higher than inflation seem to remain common in private industry.
Large companies do this "by the book" with HR-imposed bell curve type quotas (that they are trying hard to hide) with ~80% of the employees getting an average rating/raise, ~10% getting below average rating/raise, "top" 10% or so - getting a higher but also capped raises.
Smaller/less "formal" companies tend to reward/"punish" (you're still getting a raise but it's small) based on individual contributions.
So yes this is definitely a reality of the "corporate life".
I can't speak to other countries, but the USD is intentionally inflated as a matter of monetary policy and it has done so consistently in good times and bad for my entire adult life (I'm over 40)[1]. If the company is not doing well, and they choose not to give me a raise each year, that is still an effective cut in pay so long as the consumer price index is rising. Your reaction to that is yours to make, but you need to recognize it for what it is.
[1] https://en.wikipedia.org/wiki/Consumer_price_index#/media/Fi...
They are actually just regular taxable income, and are taxed exactly the same as additional non-bonus income.
When it comes to me, policy is whatever; at the end of the day, no matter how my comp package is arranged, I'll be looking after my bottom line. If I'm not happy, I'm confident in my ability to seek a better deal. I'd have to really believe bonus-based comp is likely to work out in my favor, at least on the timescale of a few years. Longer than that, it's not appealing, due to the lack of compounding of bonuses.
But I feel like as a developer, I'm a bit insulated from concerns of the mainstream labor market. I just worry that for people without a whole lot of mobility, this is just another step toward institutionalizing wage stagnation.
> Moreover, managers are reluctant to increase base pay further because higher payroll costs could result in heftier prices for customers, says Tom McMullen, a senior compensation partner with Korn Ferry Hay Group.
That's rich.