A reader sent me an email asking if a “1.75 percent raise” was appropriate for salary in the 90k range. “It’s like giving a waitress a $7 tip on a $300 meal,” he wrote.
First of all, wouldn’t it be awesome to get a 15-20 percent raise each year? Second, if any of you leave a $7 tip on a $300 meal, you deserve a good smack down, but raises and tips are not the same things. The reality is a 1.75 percent raise can be an awesome raise, and it can be a terrible raise. Here’s what is going on behind the scenes.
Budgets. Unless you’re reporting to the CEO or maybe the CFO, your boss didn’t set the budget for raises. The executive team determined what the budget would be. This was based on numerous things-not just what the cost of living would be next year compared to last year. If the company doesn’t have tons of money to spare, budgets are going to be lean.
To keep reading, click here: Your Manager Loves You. Here’s Why Your Raise is Awful.
I think it’s all in context. Many times, especially in small businesses, there is no money for raises. But also too often there is no money for raises, or a tiny raise, but somehow there is money for a booze cruise for management, or a new yacht, etc.
One of your best articles!
The range thing is stupid. How can it be the midpoint of the range if no one can get a raise above the midpoint? This has always seemed ridiculous to me even though many do it.
As an aside, thanks for pointing out that leaving a $7 on a $300 deserves a smack down and that there is no comparison to the issue of a raise and a tip.
Beyond that, the self pity in that question is pretty rank. How main wait staff do you know that come home with even HALF of what you are getting? Even with “full” tips, plenty of waiters barely hit minimum wage.
It’s a funny attitude to think that because you earn more you ought to get a higher percentage raises. Surely the fairest thing would be for everyone to get percentage raises. If anything award higher percentage raises to those earning the least – it costs the company less to do so and means so much more to them.
Hey, in retail we used to get $0.07-0.80 cent raises and that was at best. Hourly workers get much less. Some better companies offer up to $1-$2/hr per year.
It’s all in perspective.