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A while ago I asked this question and have also reviewed this other one.

Now here is the situation:

  • I live and work in a city that depends on oil, the unemployment rate is high and almost no-one's job is secure!

  • Our company has frozen raises and hires for more than two years now.

  • Even asking for extra vacation in lieu of a raise has been rejected.

However, in the past couple of years we have been working so hard to develop two new technologies and it seems like that it has been paying off. We are getting new orders and projects are coming in. When few months ago I asked for a salary review, I was told (again) that the budget is still very tight and we are now getting farther from the panic situation into a more stable position. However in the past couple of weeks I have seen these changes:

  • Hiring two new secretaries and a new sales manager

  • Several new super expensive equipment that IMO are not necessary (new cars, TVs, etc)

Now, in management's point of view these maybe completely justified decisions. But my Performance review is next week and I think there is going be the same old "No money in the Piggy" argument.

What is the best way to point out the obvious improvement in the financial situation without being to pushy?

What if I ask for the status of Hire/Raise Freeze policy?

Edit:

Please note that:

  1. During the meeting, my main strategy is to maneuver over my own performance and how it has helped the company to come out of the tough times during as its my best bet.

  2. I just wonder if it helps my case to bring up the evidence for better financial situation. and I DO NOT want to start my sentence with "Hey! I'm not blind....blah blah new TV set.."

  3. As many people have pointed out, the upgrades may not be necessarily expensive, so I will stick to "point #1".

closed as off-topic by gnat, Masked Man, Lilienthal, Richard Says Reinstate Monica, Chris E Aug 30 '16 at 15:17

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  • 10
    Before you bring it up, make sure you are correct about the money. If the old cars needed replacing, that doesn't mean there is "obvious improvement". If the TV is in a communal area, then the cost of the TV, even an incredibly large one, doesn't amount to much on a per employee basis. Also, new secretaries and new sales manager could be expenses to try to grow the business to create this improvement. – cdkMoose Aug 29 '16 at 19:34
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    If you say something like, "I notice you bought new TVs and Cars and how come I don't get a raise..." will probably result in you packing your bags. – Dan Aug 29 '16 at 19:38
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    Be aware that items such as cars can be zero cost items if they are on lease and the new vehicle is simply carrying on the lease. New technologies paying off doesnt necessarily mean more money to throw around, as there will have been debts incurred during their development - so new income doesnt automatically mean excess budget. – Moo Aug 29 '16 at 19:47
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    There is not longer a freeze for new hires so there is a policy change. I think it is fair to ask where are we on unfreeze salary. – paparazzo Aug 29 '16 at 20:32
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    I could be wrong, but the way I read this is they are just telling you that they can't afford to give you a raise because they would rather spend the money on other things. – Mark Rogers Aug 29 '16 at 23:18
48

I would argue that you don't point out the employer's recent splurge during salary review. You are correct that "in management's point of view these maybe completely justified decisions."

Unfortunately, decisions regarding budget and spending are beyond the scope of responsibility of those of us who are workers, unless we are specifically tasked, directly or indirectly, by owners. When we question those decisions, we risk giving the impression that we don't understand what our responsibilities actually are.

We don't have the big picture. It could be that the new secretaries and sales manager are needed to free up sales people to generate new business. Could be that the TV is intended to impress new clients who visit the office, again, for the purpose of landing new business.

Ultimately, employers do not have a huge incentive to raise employee salary -- employers have, in a sense, a captive audience who will continue to work (not saying this is a good practice, merely that it's not uncommon).

Your best bet is to focus on your specific performance, and how it has helped the company grow, solidify existing business, and generate new business.

Good companies will reward those employees who have remained loyal during tough times, employees who understand that sometimes sacrifice is required.

  • 37
    Good companies will reward employees who remain loyal, but I don't think OP has any assurances that he's working for a good company. As far as sacrifice, unless I have stock in a company, I don't see why I should have to sacrifice for the company. – corsiKa Aug 29 '16 at 20:50
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    @corsiKa agree, only the OP can judge if the employer is honest. As far as sacrifice, the alternative is to change jobs, which is not without risk itself. Sometimes an investment you've made with a company is worth protecting. – mcknz Aug 29 '16 at 20:55
  • @mcknz, what do you think about asking for the status of Hire/Raise freeze policy? I have revised the question. – AleX_ Aug 29 '16 at 21:01
  • @Alex if the company has given you certain reasons why they are unable to give you a raise, it's perfectly fine to ask for updates. I would just avoid anything tangential to that, such as the company spending patterns. – mcknz Aug 29 '16 at 21:04
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    decisions regarding budget and spending are beyond the scope of responsibility of those of us who are worker I think that's only true until the employees are asked to make sacrifices due to budget constraints. At that point, the employee should feel free to ask about seemingly contradictory evidence to the contrary -- and should be ready to leave if the answer is not satisfactory. If you're unable or unwilling to leave, then you may not want to "rock the boat" by asking, otherwise, you should ask questions to find out if you're being unfairly asked to sacrifice. – Johnny Aug 30 '16 at 0:48
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If you're worried about losing your job over asking for a raise, then you don't see yourself as a high value employee and your employer probably doesn't as well, so it's best to wait until the high value employees push for a raise and hope that it's a general one.

Otherwise just ask for a raise, I've done it many times and never been sacked over it. You don't even need to go into ranting about cars and TV's just politely point out that you haven't had a raise in 3 years, the cost of living keeps rising, and you feel like you deserve one. Your boss already knows all this so shouldn't be offended.

The worst they can do is say 'No'.

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    I was/am planning to ask for the raise anyway because I totally deserve it. I just wasn't sure if bringing up the new purchases/hires will help my case. Thanks for the reply – AleX_ Aug 29 '16 at 20:26
  • @Alex: bringing it up will indicate that, should you not get the raise, you will feel worse about their decision than you have in the past. So the issue is, do you want them to know that you feel worse? They might respond by explaining the expenditure to you (in the hopes of you not feeling any worse than in previous years), they might respond by giving you the raise (because they're willing to pay to prevent you feeling there's an injustice), or they might start viewing you as a greater flight risk (disgruntled employee). Expressing dissatisfaction is a tactic to use if you think it'll help. – Steve Jessop Aug 30 '16 at 11:23
  • Even worse than being fired on the spot is if your employer responds to a raise request with "I know you just got an outstanding performance review last week, but here's a Performance Improvement Plan (PIP), which is designed to be impossible to complete. And even when you do complete it, I'm just going to find some other HR-approved reason to fire you." -- Yes happened to me at my first job. – James Adam Aug 30 '16 at 13:39
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Unfortunately you do not know what is happening behind the scenes with the company. Sure the old cars were still working, but they could have been due for major scheduled repairs and your company is getting a big tax break for buying new more efficient cars. Same with the new personnel. Base salary a new sales manager probably isnt costing the company much. People like that often make a small salary and a big commission when they make a sale. Secretary staff is to support the sales that the new sales manager is hopefully going to make.

Also remember that budgets are a real thing, and if they had it in the budget to make capital improvements (cars, TVs etc) they may have had to use it.

My approach to a performance review at this point would be to note the new purchases and personnel as "It looks like we are gearing up for better business, do you have any projections about when we may be able to offer performance raises again".

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    I really like how you spun the cars/secretaries observations into a positive-sounding talk point. That makes them feel far more comfortable, which they like, and if the management likes someone, that someone is far more likely to experience management decide to do something nice for that person. Nicely done, JasonJ. – TOOGAM Aug 30 '16 at 1:28
3

I understand where you are coming from, but I think you would be totally out of line even bringing up the new purchases. As you said, you don't know the entire story there. They may be 0 cost acquisitions, or expenses needed to secure financing. They may be many, many things.

When it comes to new hires, that may be "where the money went" but staffing is very important. It's more important to run at 100% staff then it is to give out raises.

You mentioned the unemployment rate in your area is high. So the fact could be that your just not "worth" a raise. Part of figuring out what to pay an employee is their skills and performance, but part if it is cost to replace. If you're getting paid $20 an hour, but I could hire a new guy for $10 an hour; are your skills really worth $21 an hour? Companies usually do a pay freeze in these situations. It's better to keep an employee to a point, but no further. So pay freeze is a good compromise.

Let me be very clear here. You don't deserve a raise just because you worked there a year. You only deserve a raise if you're bringing value in to a company and replacing you would cost more than the raise. Now you may have had some arrangement, like "it sucks for now but next year double the raises" and that's an entirely different story, but from your post, it seems like you want a raise because you haven't had one in a while.

What you need to do, is show off the reasons why they should pay you more money, over hiring a new guy. Loyalty, is a good reason, performance is a good reason. Focus on those. Think of it like this (put yourself in their shoes), why should I give you a raise, when I could hire a new guy for half the cost? Try and focus on answering that question.

Also remember that not giving a raise is another way to "cut" pay. If your not giving out cost of living increases, your saving the money that would normally go to them. The rest of the economy doesn't stand still. They may not be in a position to "catch up" yet. Remember an extra $1 an hour is around $3,500 a year (or more) when it's all said and done, and that's per employee. That's $175,000 a year for 50 employees. You can get a lot of cars for that, specially on lease.

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    $1 / hr * 40 hours in a week * 52 weeks in a year is only $2,080 – Eric Johnson Aug 30 '16 at 1:52
  • You have to pay benifits, taxes and insurance all of which is based on Pay and added to the companies end, not the employees end. – coteyr Aug 30 '16 at 1:53
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    For example a 6.2% tax and a 1.45% tax for FICA is would add $159ish + there are other taxes, and then there is 401k matching and insurances Workmans comp, unemployment, and usually some kind of liability insurance). Last time I checked a companies portion of taxes for it's employees was around 13.3% total and then the company has to pay the insurances and so on. Never think that you only cost what you get paid, there is always more to it then that. – coteyr Aug 30 '16 at 1:58
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How well the company is doing is of only limited importance to your raise. Your value to the company is the key. The only real effect on how well the company is doing would be if it were truly doing poorly - thus unable to afford even a justifiable raise.

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