Raise decreased due to earlier Promotion

Question

I've had a great couple of years at my company and, 6 months ago, I was promoted. The promotion came with a base pay increase of 6%. My manager and I both felt this promotion was long overdue.

At the end of the year our company determines our yearly raises and bonuses. My raise this year is just 1% (way below the usual yearly raise of 3%). This is after a brilliant year in which my team and I delivered some major new features for the department and the company itself.

I have been told that due to my being promoted and given a raise 6 months ago my yearly raise has been effectively canceled.

Regardless of policy, this doesn't seem right to me, giving a significantly smaller raise than usual sends a message that my work was unsatisfactory (or not appreciated). I've decided to speak to my boss's boss (decision maker in this area) but I'm having difficulty phrasing my argument.

If anyone has dealt with a similar situation, I'd love to hear what you did and how it turned out for you.

Answer 1

Let’s say raises are done on Dec 1st.

If you were promoted in November you would get 6% due to promotion, maybe 1/4% raise for the month, and 3% a year from now. If you were promoted in January you would get 3% raise, then 6% for promotion, then maybe 2.75% a year from now.

If you put it this way to the boss, it doesn’t look fair so you might change his mind. However, the boss could say that the 6% was actually 4% for promotion and 2% for the normal raise. It’s worth a try, but may not succeed. So the boss could say “If you had been promoted just after your annual raise, you wouldn’t have got 6% but only 4% for the promotion”.

Answer 2

In my experience, it's fairly common for annual raises to be prorated based on the portion of the year you were in whatever your current position is. So, for instance, if you get a promotion halfway through the year, you expect your annual increase at the end of that year to be half as big. Many employers bake-in a partial annual increase when doing promotions partway through a year. In your case, the job-title based promotion may have only been worth 4%, and you got 6% because they were giving you the promotion's 4%, and a partial-year annual increase of 2%. Then when you finished the second part of the year, you got another partial-year annual increase to bring you fully up to par.

In addition, some employers scale annual increases based on where you are in a given position's pay grade. For instance, my current employer reduces increases for people that are over the midpoint of their grade. This essentially helps normalize pay among employees that are supposed to be "equivalent" (in the same grade) over the long run.

So, in essence, I don't see this behavior as unusual. But, of course, these rules I have observed may or may not play into your specific situation. So, that said, it seems you have to decide if you feel you are currently underpaid. If so, you should follow the standard advice for discussing such a situation:

• First, do your research. Determine what specific skills or accomplishments of yours feel the most valuable. Tie those skills to your job position (literally, reference your job description if you have one). Be ready to show that you are "worth" a certain amount.
• Second, make sure you understand the rules. Some employers are very tight lipped about how raise decisions are made, and some employers don't actually have any rules and just make things up as they go. But many employers have specific and detailed guidelines to help managers make decisions about raises. Talk to your manager about whether or not your employer has guidelines, and express that you are interested in understanding them. Many managers will be glad to share, because sharing the rules takes the pressure off everyone.
• Third, once you understand your own value and you understand the rules for how decisions about raises are made, tie the two together if possible, and ask for an additional increase. For instance, if annual increases are scaled according to performance reviews, talk through your review and why you feel it justifies a higher number. Or take whatever other path you are presented with based on the first two points.

The key to making your case for a raise is understanding the system you're working in, and making a clear argument for your own personal value. Ideally, salaries are based directly on an employee's contributions and value. Good employers understand that and will make decisions accordingly, if presented with the right argument.