What are you Worth?

As I finish up my vacation here in beautiful Miami, I am privileged to have a guest post from Debt Discipline.  Recently having gone through my annual review, receiving my bonus and merit increase it’s a great reminder to see and compare to what your employer views as what you are worth.  Like many of us out there, we always think that we should be paid higher, but is that what everyone thinks?

ddpicWhat are you Worth?

This seems like an easy question to ask in the personal finance world. You’d simply show me your excel spread sheet or your app of choice detailing your bottom line, your overall financial big picture. But when I ask the questions what are you worth? I’m not asking about your overall net worth. I’d like to know what are you worth in terms of your employment and to your employer. Most of us who work for someone else received some type of annual review and along with it an increase in salary or wage, most commonly known as a merit increase.

mer·it

noun: the quality of being particularly good or worthy, especially so as to deserve praise or reward.

verb: deserve or be worthy of (something, especially reward, punishment, or attention)

 

So I’ll ask again what are you worth?

 

Wage Data

I figure the easiest play to find data on the average wage increases would be the Bureau of Labor Statistics.

I was wrong, finding that exact detail on a government site was like trying to find a needle in a haystack. So I quickly moved on to a number of other sites that provided useful information. According to both USA Today and Mercer the average raise in base pay is expected to be 3.0% in 2015, up slightly from 2.9% in 2014, 2.8% in 2013 and 2.7% in 2012. With Top performing employees are earning the highest average wage increases at 4.8% and average rated employees earning 2.6%, just barely over the current inflation rate of 2.1%.

Subjective

In most companies reviews of employees are completed in some type of reporting structure. They are given by the staff members in the higher position of authority say a lead, supervisor, manager, etc. to those in lower roles or with less responsibility. In an idea situation all of the goals, behaviors, that an employee is being rated on would have a measurable component to them. But often many are very subjective and left to interruption of those in charge. Leaving the employee exposed to being judged and rated on things like office politics, and favoritism, rather then work ethic and ability.

This type of subjective nature to a review, could impact your wage increases negatively or positively depending on which side of the popularity fence you sit on. Either way wouldn’t it be nice to be in control of your own salary increase? If so, it might be a good time to start working on a plan B.


How often do you receive a merit increase? What percentage of increase has been the norm for you? Have you ever been exposed to a subjective review?

12 Responses to “What are you Worth?

  • We get our merit raises and bonuses annually. Since I work for a big corporation the process for our mid-year and annual reviews is quite tedious and annoying as expected. We’re rated on a number scale of which our raises and bonuses are based off of. But as I’m not in sales with a sales target or similar, every merit review is 100% subjective. So far it has worked in my favor, but the year it doesn’t I will have my complaints. In my line of work the raises are much higher than the national average as long as you follow the normal course of learning and advancing and taking on more responsibility.
    Fervent Finance recently posted…Managing Your FloatMy Profile

  • My company was targeting 2% for our raises that came out this month. I got 2.4%. Better than a poke in the eye I suppose 🙂
    Mrs SSC recently posted…Commuting takes its’ “Toll”!My Profile

  • I got just shy of 5% but we only got ~85% of our bonus. Kinda hard to compare to the wifey’s 33% raise and ~33% of salary bonus – private company vs public. Sigh.

  • My company gives bonuses and raises yearly, with raises occuring near the end of the year and bonuses occuring in the first quarter. Last year I received an extra raise on top of that so it was almost a 10% raise. This year I basically received a 3% cost of living raise though.

    The bonuses can be boosted by your overall work (mine was) but they can only be a certain % of how the overall business unit did which can bump it down (mine was).
    Debt Hater recently posted…February 2015 Budget ReviewMy Profile

  • January is our official review time for bonus and salary increases. Well we actually pay out bonuses in July and January. Basically you can get 30% of your bonus in July and the remaining 70% in January.

    After only being with the company for 9 months I was able to lock in a 5.5% raise in salary. But I also picked up about 11.4% by making the move to the new company 9 months ago. I also got 100% of my bonus even though I was only here 9 months. In addition to that my bonus increased by 43% for 2015.

    So after everything was said and done I pulled in a nice increase in total compensation over the last 9 months (April 2014 to January 2015) of about 20%.

    Being in Finance I know that our overall target was 2% company wide. So 10X is pretty good, I am feeling worth something 🙂

    Over the past 7 years I have averaged increases of 10-20% a year. I don’t think I have ever had a review that was not at least partially subjective. The shitty thing about working in corporate is that if you want to thrive you will have to play the politics game.

    So although I hate the game, I continue to play it as long as my worth is determined by someone else. But I long for the day where I set my own rates once and for all.

    Cheers!
    Gen Y Finance Guy recently posted…February 2015 – Detailed Financial Report #2My Profile

  • Hate the game, but don’t hate the player…:) Nicely done. Now let’s hope your starting salary was something solid.
    Brian @DebtDiscipline recently posted…Week End Round Up #73My Profile

  • Our raises were suspended until later on this year where they will be revisited. Our bonuses were unaffected though. That being said I would take a raise over an unaffected bonus any day. The long term results of a small raise in the long run will dwarf the results of a bigger bonus when it comes to OT, Benefits like employer match or pension plans.

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