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My company has insanely long times to approve raises (mostly due to it being a branch of a multinational company whose headquarters are in another continent). Also, raises usually start being applied in April every year.

After working here for two years, in May (during a scheduled performance review) I asked for a 10% raise.

Six months later (so, end of November), I had another performance review, which went well, and at the end I asked about my raise. My boss told me that the best that the company could do was 5%, and that I would get that starting from next April.

First things first, I find it really convenient for the company that performance reviews are conducted in May, when the last window for a raise every year is in April, so that they can string along employees for a year without doing anything (what a coincidence!).

Secondly, I feel incredibly disappointed, and almost like I've been betrayed. I was expecting this raise, and quite frankly, I think I deserved it. My boss explained that the company isn't doing too well in this period, there's a veto on new hirings and travel expenses, so therefore raises have been blocked to 5% max for everybody and blah blah blah.

My immediate reaction to this was that I brushed up my CV and started applying to jobs, literally the same evening as all of this happened.

The problems is, apart from this issue with the raise, everything else is going pretty well with my job. My team is nice, company culture is good, and it's an industry I love.

So my question is... am I overreacting? Should I just "suck it up" and wait for better times? Or am I doing the right thing and it's time for a career move? I am very well aware of the fact that the best way to "get a raise" is finding a higher paying job.

As a funny (or sad) side note, a few days after this happened we had a call with a big head honcho from overseas (basically the head of our whole division) and during that call he said that the company has been struggling with "retaining younger talent" and that "there's been a lot of turnover among Millennials and Gen Zs"... gee, I wonder why! Maybe paying people more would fix the problem, has that ever occurred yo you, Mr. Genius Bossman?

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    There’s no point wondering if you’re underpaid. Go and find out! Get yourself another offer somewhere else and then decide if it’s worth leaving for or not. Until you have another offer in hand you’re never going to know what you could be getting elsewhere and if it’s better than what you have now.
    – Kaz
    Commented Dec 5, 2022 at 11:12
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    “My boss told me that the best that the company could do was 5%, and that I would get that starting from next April.” - The fact the raise was capped shouldn’t concern you, what should concern you is a raise for your work from 2021, won’t be seen until 2Q2023. And the only reason your getting that raise (let alone the one you probably should get for 2022), is because you asked about it.
    – Donald
    Commented Dec 5, 2022 at 12:33
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    Most people are status-quo biased. Most people get comfortable and rationalize negatives. Most people are change-averse. Most people who think maybe they should leave should have left by now. Discount your feelings and intuition about how well everything but the pay is going for known and expected biases, and act accordingly. Commented Dec 5, 2022 at 18:43
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    Did you get any raise for the last 2 years or since you join the company ? If you have not get any raise for 2 years, it is time to get 10%. Commented Dec 5, 2022 at 23:26

5 Answers 5

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I think the only mistake would be to make an emotional decision. Write out the pros and cons of your current job. Then start to look at other positions and make a rational decision on if they offer something better.

If you feel shafted on the raise but your salary is still at the higher end of what you could be earning. Is it really worth abandoning a job you like? Especially if it offers a good work life balance.

I've been 'screwed' in the past on pay increases but my direct boss was great on things like letting me WFH when my kids were sick or leave early to go to things.

So, really my advice is to take a deep breath, clam down and make a sensible decision for you.

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So my question is... am I overreacting?

Only you can decide the appropriate level of reaction.

You wanted and expected 10%, and were offered 5%. Certainly that's disappointing. But only you can decide if that's disappointing enough for you to leave.

As far as "got shafted" or this being a "betrayal", I suspect you are taking this too personally. It's a business. And it sounds like what happened to you is standard practice there, not something aimed at you personally.

So you should weigh the job factors and decide if it's time to move on or not. You like the team, company culture, and industry. You don't like the way raises are handled.

Consider your alternatives. Decide if you can find a new job with equally good team, culture and industry but a better process for raises. Then act accordingly.

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My experience has been that if your company really wants to retain someone, and there's a serious pay gap that makes this company un-competitive compared to the market -- then when push comes to shove, they will find a way to fix pay rates faster than a year from now.

That said "push come to shove" is not someone complaining about the lack of a raise or asking for it. There are plenty of folks out there who will do this, regardless of the fairness of their pay, the market rates or whether or not they are willing to leave over it... so as a manager, I've generally taken the tact of being honest, making a note of how upset the person seems and then waiting and seeing.

There could be a number of reasons for the bad pay:

  • this is an expensive site and the company isn't super interested in retaining people at your site, because they've found a way to do the work cheaper elsewhere.
  • in their opinion, you're already paid fairly and they won't make any special exceptions.
  • they are deeply messed up and have no real way to grant raises, especially out of cycle raises.
  • your boss doesn't have the leverage for some other reason.

Note, almost none of these are personally about you - at most, they are making an assessment about your work, and your skillset's value to the company and then making a cold hard business decision from there. At worst, they simply don't consider you at all, because you are just 1 data point on a large balance sheet.

My advice would be - always be looking, at least a little bit. Do 1-3 interviews a year, get a sense of what you could expect as a market rate in another position. Also get a sense of what other teams & companies would be like. Usually in the first 1-2 meetings with a recruiter, you can get a sense of the pay range you could expect, so you don't have to go all the way through an interview to get this sort of info. Don't make it your only priority, just keep the effort on a back burner.

Only when you have an offer in hand would it be reasonable to consider moving, and that offer will give you a strong sense of how underpaid you may be... I would counsel most folks not to leave if the pay increase is small relative to your salary or your needs - since it's really hard to judge whether the overall employment experience would be better than your job which is already good.

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This question borders on Opinion. Only you can make the decision as to whether the 5% difference between what you want (a 10% raise) and what you are offered (a 5% raise) is offset by the other aspects of your job that you like.

However, there is some generic advice that is applicable here:

1: What is the current Market rate for your industry and your skills and experience. If this is greater than the 10% you would like, then it would seem you are being definitively underpaid and it would be a good time to brush up on the old CV and see what Nibbles you get.

2: What is your reason for wanting 10%? Let's say for example it's merely to offset the Inflation rises of recent times, then whilst a 5% raise is still a 'raise' you are still at a net-loss from where you were. If your reason for wanting 10% is that you just want more money (and there's nothing wrong with that...) then 5% is still more money.

If you can't negotiate a higher increase, then perhaps you can talk to your boss about other options:

"Boss, I know the company offered 5 and you know I wanted 10 - I understand the reasons why you can't meet me at 10% - however, would the company consider an extra 5 days of PTO to cover the difference?"

(PTO is probably easier to negotiate, but there may be other perks you could consider)

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RIGHT NOW is not the best time to leave. Right now is the time to take a deep breath and think about the situation for a few days. If you decide with a calm mind that your company is indeed intentionally shafting you, then it is time to start looking for a better job, and when you find a better job and sign a binding contract, then you give the minimum amount of notice, and at the end of the notice period, that's the right time to leave.

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