It happens every year. Complaining. It starts in December and will continue until February and maybe longer. Why do you ask? Annual compensation reviews. Managers dread this time of year. It is budget season, and your managers are fighting for a pile of money to distribute to their direct reports. They do their best. They propose their budget number and make their case. Then the amount is cut and then cut again.
The money pile is enough to destroy most of the employee's expectations and is set on a predetermined baseline percentage. For our arguments, let's say 5%. So, if someone gets more than 5%, then someone else gets less than 5%. There is this idea that the manager has all this leeway, but they don't. But they do get the joy of numerous meetings that piss off their people. What to do, what to do? Keep reading.
Long ago or not so long ago, you accepted the position at your current company. Your acceptance letter is the only agreement you have with the company. That may have been five roles/titles ago or a week ago. There are exceptions to this, but it is rare. This agreement is the only thing you and your employer have in writing. They don't have to give you a raise. So you and your employer and in a financial dance. They want to keep you, and you want to get paid more. Now that we have set the baseline, let's talk about having appropriate expectations.
There is a collective belief among employees that we are worth more. It doesn't matter if the company is profitable or struggling. Winter is a time for managers and employees alike to fall into seasonal depression.
Why do we get disappointed when it happens every year? Expectations. Let me share how this works with a demonstration. Take one hand and place it at your belly button. This hand is "reality." Place your other hand just above your head. This hand is your "expectation." See that space in between your hands. That open space is "disappointment!"
Setting Your Expectations
- Don't mentally spend money until you it hits your account. I've done it. You've done it. It's never good.
- Expect what has happened in the past. For example, if the company pays 3%, then expect 3%.
- Assume your boss did what they could.
- Don't expect the company to take care of you. That is your job.
- Your most significant salary increase will NOT come with annual reviews. Instead, they come when you change roles or companies.
- The Market determines your salary.
- Complexity, scarcity, and difficulty determine the Market's salary
- Remember that your salary is only one part of your job satisfaction. Don't forget vacation time, retirement, bonuses, insurance, and friendship (working friends can be one of life's forgotten joys).
Set your expectations, and also own your career. It isn't a case of picking one or the other but picking both.
So how do you get a better raise? First, play the long game focus a year or two out. Then, partner with your boss and have a long-term plan.
- In your annual review, thank your boss for what he has done.
- Figure out the market value of your position and others like it.
- While you are at, find the market value for your next position
- Look for positions inside the company that could be the next step.
- Start that conversation with your boss.
- Interview people inside your company who have jobs that interest you.
- Be patient. Building a career takes time.
- Always build your professional network. The better your network, the better your potential career growth.
Take ownership of your career. Be patient while building your network. If you can find a position you like, a position that the market pays well, and a position you are good at, you are a lucky person.