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I have been working at the same large company (over 5K employees) for ~20 years. They do "merit-based" raises each year in January, based on the prior year's performance. Each year I have gotten outstanding performance reviews, and thus have been given an "above average" raise, which has still been pretty low (in the ~3% range). So I'll get told something like that my performance was excellent, so even though the average raise this year is 2.6%, I'm getting 3.1% (and I should be happy that I'm getting an above average raise). The way they company does raises is that they give a certain "raise pool" to each department, and they have to divide it up among employees. We don't really have any slackers in our department so it's hard to argue for a bigger piece of the pie when everyone is deserving.

They do their own salary surveys for each job category to make sure they are paying competitively. They say they aim to pay on average 105% of the industry average (adjusted for location, I believe). In the past, my managers have been vague about where I stood relative to the average, and I didn't push hard enough to find out. This year I found out that I am being paid 90% of the industry average for my job category. So I asked my manager why, given my very high performance rating, I wasn't being given a bigger increase to get me up to at least the industry average, and got the same fixed raise pool story. I asked why the department couldn't get additional funds if they have high-performing employees being paid below the industry average, given the company's goal to pay above average. He said they might be able to do that in an "out of cycle" action in the spring, and I should ping him again at that time. But he said that even then it would probably be done in small increments and could take years to get me up to the average. He said that there were people in our department being paid closer to 80 or 85% of the average, so they were the top priority this year for any extra funds they could get for that during this pay raise cycle. He did say that if I had other offers, he could bring them to upper management, but I don't really want to play that game. (I like the job and don't especially want to change jobs.)

Should I be more aggressive about this? I've been pretty passive about accepting whatever they gave me in the past, but I'm beginning to feel taken advantage of. (I'm a woman, which I mention because I know women are traditionally less aggressive about this kind of thing than men in the same roles.) My manager admits/agrees that I am underpaid given my role and performance, but claims "his hands are tied".

Although related to Is it standard for big companies to be inflexible on raises and promotions? I don't think my question is a duplicate (though you may disagree). The primary difference in my mind is that the company has a stated policy to pay above average, and admits they are paying me below average despite excellent performance. So I feel like I have the data to support asking for more, I just don't know how to handle it in a large bureaucracy.

  • I'm currently paid $120K with a Master's degree in CS (from a top engineering school) and over 20 years experience. The average for my job level is $132K according to my employer (which honestly I believe is likely a low estimate -- I know kids getting offers in the 95-110K range straight out of Bachelors degrees in CS). – mathmom Jan 7 '15 at 4:59
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    Why was this downvoted? Is there something I can do to improve the question? – mathmom Jan 7 '15 at 5:00
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Should I be more aggressive about this?

Yes.

You are in a typical large-company situation. I happen to work for a company almost exactly the same size, with what sounds exactly like the same pay structures.

Arguing "why doesn't the company do things differently" isn't likely to be fruitful. So asking "why the department couldn't get additional funds if they have high-performing employees being paid below the industry average" probably won't help. Nor will pointing out the company's stated goal of paying 105% of the industry average.

Big companies are slow to move. And when the standard practice is to give your manager a fixed percent of salary to disburse to the team, it's quite hard to get exceptions. (I've tried for years).

That said, the squeaky wheel gets the grease.

You should continue to remind your boss of the great work you are doing, particularly at the end of a successful project, and ask when you can expect to get those out-of-cycle raises. It may not be the immediate jump you are looking for, but over time could get you to a better position.

Make sure you continue working hard, and with a positive attitude. Managers like to do things for great performers, particularly those who are upbeat and positive.

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I think that you have to decide whether you are willing to switch jobs before you can choose a course of action. If you are open to new opportunities, I would take the temperature of the local job market and see if the grass is potentially greener somewhere else. If you've been at the same company for a while, and salary is very important to you, you really have to switch companies to get paid what you're worth. In large companies, it's much easier to bring someone new in at the going rate than it is to raise a current employee to that rate. It's stupid, but that's the way it is.

I keep my resume updated on LinkedIn just to see if there is a lot of demand among the recruiters for my skill set. From what I see in my inbox, I am almost certainly paid below the average in my local job market, and I could probably find another job quite easily. On the other hand, I have a lot of other intangible benefits at my current job that I think make up for the difference in pay so I'm not willing to leave for a modest pay increase. I really like my manager and my team, my commute is easy, I have a lot of flexibility in my work schedule, etc. I think that the average pay in a region is driven up by salaries that are high to compensate for a crappy work environment, so I don't care much if I'm a bit below it as long as I'm not miserable at work.

Knowing what is out there and understanding that I'm choosing to make the trade-off between pay and work environment makes me a lot more content with my 3% raises (we have a pool system similar to your company's and I'm also on a team of high performers). If you don't want to switch companies right now and you truly believe that your manager can't get you the pay raise you deserve, maybe you could negotiate for some other form compensation that your manager does have the power to provide, like allowing you to shift your hours to be able to work a half day on Friday or allowing you to work from home one day a week.

It's good for you because you get some sort of consideration for your hard work, and it's good for your manager because it gives him the opportunity to give you some tangible recognition that is within his power to provide. Right now all he can do for you is document your high performance in your reviews.

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    +1. The "intangible benefits" point is key. Your pay is just one component of your total package, along with how much you like your colleagues, how interesting your work is, how bad the commute and how much of a hassle changing jobs would be. The OP mentions she likes working at this place and does not want to change. It seems like at this point in time, this plus outweighs the minus of a lower salary. Look at the big picture. – S. Kolassa - Reinstate Monica Jan 7 '15 at 11:07
  • Thanks @ColleenV - your point about whether or not I'd actually want those higher paying jobs is a good one. I accepted Joe's answer but yours was also helpful to me. – mathmom Jan 7 '15 at 16:15
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Looking at the facts:

  • Each year I have gotten outstanding performance reviews, and thus have been given an "above average" raise
  • So I'll get told something like that my performance was excellent, so even though the average raise this year is 2.6%, I'm getting 3.1%
  • The way they company does raises is that they give a certain "raise pool" to each department, and they have to divide it up among employees.

You've done better than your peers and are being rewarded as such.

  • This year I found out that I am being paid 90% of the industry average for my job category.
  • They say they aim to pay on average 105% of the industry average

Yet you want a 16% pay rise. Based on an average from where exactly? Are you an above average worker, and are you able to justify why you should be able to command an above average salary? Keep in mind that averages (assuming this is a mean average) are very sensitive to outliers in small samples.

If you can justify such a large pay rise, then articulate that to your boss. Otherwise, the 105% is an aim, not a promise, and will likely only apply to above average workers.

  • According to my performance reviews, I am performing well above average for my job class, but being paid below average. My manager thinks I "deserve" to be paid above average, but doesn't have the ability to make that happen. – mathmom Jan 7 '15 at 4:01
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    Ok, if your manager can't swing it, you have two choices: stick around and wait for the business to have more money,or go job hunting, get a good offer at a job ypu would be happy to take, then give the company a chance to pay you to stay. If you aren't willing to walk, you have little leverage and all you can do is continue being a top performer and selling mgmt on the idea that they want to reward that. You may need to change assignments internally to achieve that too. – keshlam Jan 7 '15 at 5:19
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    My take hopme from the discussion is that the salary you started with on your positition years ago is (most of the times) the biggest influence on your salary now. – mart Jan 7 '15 at 9:19
  • You are right about that @mart. And others are right too that staying in the same company for a long time isn't good from a salary point of view, which is most people in the computer industry don't stay in jobs very long anymore. Which is a shame because there is a lot of (specific project history) knowledge that gets lost when people leave. – mathmom Jan 7 '15 at 18:46

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