##Executive Summary

Often the people who perform the reviews (direct management) do not control the budget (which determines raises/bonuses). The only way to know these are to ask:

1. How the review process works after the direct manager conducts it
2. How changes to pay are controlled on a team/group/department/company level
3. Express your specific concerns to your direct manager during the review process

##Swimming Upstream

Most companies over a certain size do not have any direct correlation between the quality of your performance review and changes to your compensation. Money is controlled from the top (in the form of budgets), and performance reviews are controlled from the bottom. So you have one end trying to assess how to distribute money that they haven't been given yet, and there are bound to be holes in the process.

Some companies do this by only allowing a manager to give stellar reviews to x% of their employees to get special compensation. GE was famous for letting go the worst 10% of management every review cycle. If your company has guidelines for how many people are going to be spectacularly rewarded, then you need to know how to get in that select few, and what level of management will decide it (will your team get a special budget for that? Are you competing with members in other teams in the same group? other groups in the same department? etc.).

It's hard to win the game if you don't know the rules.

##Trickle-Down Economics

The other thing to understand is how much you should expect to be rewarded. Let's say you're in a giant multi-national corporation with a dozen business divisions, and subsidiaries, and many different products of varying successes. How is the budget controlled?

If your company is controlled centrally, then resources will be pooled and may be redistributed to help out the not-so-successful business units, meaning that even if your division/product is successful and making money hand-over-fist, your compensation may not reflect that success since it has been redistributed first.

If your company is controlled more locally (so each business unit gets a larger piece of the pie and pays a tribute to the parent company of a fixed amount of sales or profit), then you have to understand how the company rewards success internally. For instance, if your division has several products, do they distribute evenly? Do they reward people who work on successful products more? Do they reward with bonuses, pay raises, or even added manpower for successful divisions?

Following the money is important to managing your expectations for what sort of compensation is available even if you do get a stellar review.

##There are Exceptions to Every Rule

There is usually money available that management can free up if really necessary. If you get a stellar performance review, but are disappointed in your compensation package, then feel free to tactfully bring that up your manager (which is covered in this question). If you are worth it, they can always find a way that cuts through some of the bureaucracy that plagues many organizations, but you probably have to be beyond spectacular for them to spend their political capital on.

Executive Summary

Often the people who perform the reviews (direct management) do not control the budget (which determines raises/bonuses). The only way to know these are to ask:

1. How the review process works after the direct manager conducts it
2. How changes to pay are controlled on a team/group/department/company level
3. Express your specific concerns to your direct manager during the review process

Swimming Upstream

Most companies over a certain size do not have any direct correlation between the quality of your performance review and changes to your compensation. Money is controlled from the top (in the form of budgets), and performance reviews are controlled from the bottom. So you have one end trying to assess how to distribute money that they haven't been given yet, and there are bound to be holes in the process.

Some companies do this by only allowing a manager to give stellar reviews to x% of their employees to get special compensation. GE was famous for letting go the worst 10% of management every review cycle. If your company has guidelines for how many people are going to be spectacularly rewarded, then you need to know how to get in that select few, and what level of management will decide it (will your team get a special budget for that? Are you competing with members in other teams in the same group? other groups in the same department? etc.).

It's hard to win the game if you don't know the rules.

Trickle-Down Economics

The other thing to understand is how much you should expect to be rewarded. Let's say you're in a giant multi-national corporation with a dozen business divisions, and subsidiaries, and many different products of varying successes. How is the budget controlled?

If your company is controlled centrally, then resources will be pooled and may be redistributed to help out the not-so-successful business units, meaning that even if your division/product is successful and making money hand-over-fist, your compensation may not reflect that success since it has been redistributed first.

If your company is controlled more locally (so each business unit gets a larger piece of the pie and pays a tribute to the parent company of a fixed amount of sales or profit), then you have to understand how the company rewards success internally. For instance, if your division has several products, do they distribute evenly? Do they reward people who work on successful products more? Do they reward with bonuses, pay raises, or even added manpower for successful divisions?

Following the money is important to managing your expectations for what sort of compensation is available even if you do get a stellar review.

There are Exceptions to Every Rule

There is usually money available that management can free up if really necessary. If you get a stellar performance review, but are disappointed in your compensation package, then feel free to tactfully bring that up your manager (which is covered in this question). If you are worth it, they can always find a way that cuts through some of the bureaucracy that plagues many organizations, but you probably have to be beyond spectacular for them to spend their political capital on.

##Executive Summary

Often the people who perform the reviews (direct management) do not control the budget (which determines raises/bonuses). The only way to know these are to ask:

1. How the review process works after the direct manager conducts it
2. How changes to pay are controlled on a team/group/department/company level
3. Express your specific concerns to your direct manager during the review process

##Swimming Upstream

Most companies over a certain size do not have any direct correlation between the quality of your performance review and changes to your compensation. Money is controlled from the top (in the form of budgets), and performance reviews are controlled from the bottom. So you have one end trying to assess how to distribute money that they haven't been given yet, and there are bound to be holes in the process.

Some companies do this by only allowing a manager to give stellar reviews to x% of their employees to get special compensation. GE was famous for letting go the worst 10% of management every review cycle. If your company has guidelines for how many people are going to be spectacularly rewarded, then you need to know how to get in that select few, and what level of management will decide it (will your team get a special budget for that? Are you competing with members in other teams in the same group? other groups in the same department? etc.).

It's hard to win the game if you don't know the rules.

##Trickle-Down Economics

The other thing to understand is how much you should expect to be rewarded. Let's say you're in a giant multi-national corporation with a dozen business divisions, and subsidiaries, and many different products of varying successes. How is the budget controlled?

If your company is controlled centrally, then resources will be pooled and may be redistributed to help out the not-so-successful business units, meaning that even if your division/product is successful and making money hand-over-fist, your compensation may not reflect that success since it has been redistributed first.

If your company is controlled more locally (so each business unit gets a larger piece of the pie and pays a tribute to the parent company of a fixed amount of sales or profit), then you have to understand how the company rewards success internally. For instance, if your division has several products, do they distribute evenly? Do they reward people who work on successful products more? Do they reward with bonuses, pay raises, or even added manpower for successful divisions?

Following the money is important to managing your expectations for what sort of compensation is available even if you do get a stellar review.

##There are Exceptions to Every Rule

There is usually money available that management can free up if really necessary. If you get a stellar performance review, but are disappointed in your compensation package, then feel free to tactfully bring that up your manager (which is covered in this question). If you are worth it, they can always find a way that cuts through some of the bureaucracy that plagues many organizations, but you probably have to be beyond spectacular for them to spend their political capital on.

##Executive Summary

Often the people who perform the reviews (direct management) do not control the budget (which determines raises/bonuses). The only way to know these are to ask:

1. How the review process works after the direct manager conducts it
2. How changes to pay are controlled on a team/group/department/company level
3. Express your specific concerns to your direct manager during the review process

##Swimming Upstream

Most companies over a certain size do not have any direct correlation between the quality of your performance review and changes to your compensation. Money is controlled from the top (in the form of budgets), and performance reviews are controlled from the bottom. So you have one end trying to assess how to distribute money that they haven't been given yet, and there are bound to be holes in the process.

Some companies do this by only allowing a manager to give stellar reviews to x% of their employees to get special compensation. GE was famous for letting go the worst 10% of management every review cycle. If your company has guidelines for how many people are going to be spectacularly rewarded, then you need to know how to get in that select few, and what level of management will decide it (will your team get a special budget for that? Are you competing with members in other teams in the same group? other groups in the same department? etc.).

It's hard to win the game if you don't know the rules.

##Trickle-Down Economics

The other thing to understand is how much you should expect to be rewarded. Let's say you're in a giant multi-national corporation with a dozen business divisions, and subsidiaries, and many different products of varying successes. How is the budget controlled?

If your company is controlled centrally, then resources will be pooled and may be redistributed to help out the not-so-successful business units, meaning that even if your division/product is successful and making money hand-over-fist, your compensation may not reflect that success since it has been redistributed first.

If your company is controlled more locally (so each business unit gets a larger piece of the pie and pays a tribute to the parent company of a fixed amount of sales or profit), then you have to understand how the company rewards success internally. For instance, if your division has several products, do they distribute evenly? Do they reward people who work on successful products more? Do they reward with bonuses, pay raises, or even added manpower for successful divisions?

Following the money is important to managing your expectations for what sort of compensation is available even if you do get a stellar review.

##There are Exceptions to Every Rule

There is usually money available that management can free up if really necessary. If you get a stellar performance review, but are disappointed in your compensation package, then feel free to tactfully bring that up your manager (which is covered in this question). If you are worth it, they can always find a way that cuts through some of the bureaucracy that plagues many organizations, but you probably have to be beyond spectacular for them to spend their political capital on.