Totally agree with this. I'm also an advocate for giving people substantial pay rises every year. It sounds profligate, but the alternative is that people leave for the so-notorious-as-not-to-merit-explaining pay bump one gets from switching company, and all your institutional knowledge ends up churning practically continually. It's probably the biggest thing I learned from my (former) time doing eng management.
(Also, fwiw, it's a non sequitur - I sat in Latin classes for 8 years and I still can't remember the conjugations well enough to explain why, but, long story short, it's a verb and so it doesn't obey the familiar rules of (even Latinate) English noun endings.)
((Also, that was a very classy and magnanimous response to a – speaking of the comment as distinct from its author – very classless and pusillanimous comment. Chapeau to you. I can't say I'd have managed the same myself.))
Hah, when I was at a big company i took your opposite view in that a salary increase represented recognition for good work done consistently and the expectation of a new normal. It's funny how we interpret the (generally) same system
I'd interpret this differently: The fact that the industry has converged on the "don't give significant raises unless you change jobs or job titles" model is a subtle attempt -- perhaps even an unconscious attempt -- to implement the "up-or-out" model that the original submission recommends.
By not giving substantial raises, you're encouraging the best people to work at your company for a while and then quit. You're even giving them a good face-saving excuse to quit. It's far more amicable for an employee to say "I'm leaving because I can get another $25 an hour across the street" than "I'm leaving because I've been here for three years, I've done all I can for you, and now our relationship has become dysfunctional, and you never listen to me, and I'm bored to death". Similarly, it's easier to tell an employee "I'm afraid we have no budget for a big raise this year -- curse our penny-pinching accountants!" than "You've been around for four years, your value to the company is static or declining, and we all just kind of wish you would leave".
Which of these scenarios is more likely to produce happy "alumni" -- former employees who might be willing to network with you, refer other talented people to you, or even come back and work for your company again (presumably at a somewhat higher rate)?
If you expect your best employees to either move up or move out, pay raises are irrational. If you offer large raises to everyone that stays in the same position for five years, you're basically pouring more money into the metaphorical "dead sea". (This assumes, of course, that the "dead sea" model actually applies to your company and your industry. The model should be taken with a grain of salt...)
Allow me to give a slightly different perspective. When engineers are consistently outperforming their wage, I immediately recognize that with an unsolicited pay increase to match their performance. This has always been met with appreciation, as it demonstrates both that outperformance is actively recognized and rewarded, and secondarily that management is looking out for the benefit of the employees. This has positive cultural impact.
This is more or less difficult depending on the company. In a few cases, I had to go to war with HR to get a deserving employee a raise who deserved it but hadn't asked for it. Other companies have processes that are highly amenable to it.
In many cases, if employees have to ask for more money when they've earned it then it is a management failure.
> your value to the company has increased from experience and institutional knowledge
It's my understanding that regular raises used to be the standard practice in the private sector of the US employment market for this exact reason.
Every year, you'd have your performance review, and assuming it wasn't bad, you'd get some sort of a raise.
I'm not sure where this nonsensical "no-raise mentality" comes from, when clearly it will hurt retention and lose the employer some of its most valuable employees with their knowledge, skills, and experience.
Multiple companies are paying to increase veteran retention, and I've generally been working for these companies, but the complaints here make it seem like it's the exception rather than the rule.
Uh, while I realize the most common method for getting a raise in Silicon Valley is to switch jobs, the idea that it's the only mechanism or the most desirable one is very bizarre.
It also seems to imply that wanting more money is somehow mutually exclusive with wanting to continue working in your current job and/or for your current company.
You're also demonstrating another classic weakness in engineers, failure to recognize social capital. In asking for that information, you put management in the position of articulating their expectations, and when you meet or exceed them, it pressures them further to agree to a raise.
Management isn't just running some simple equation to determine your salary, they're exercising their own judgement as to what you're worth to them and what will keep you working there productively. That judgement can be altered through psychological means.
This is a really interesting take on the article, but not one that I can agree with.
It could just be the culture at the company that I work for, but when my manager tells me that I'm doing great work, I'm a top contributer, etc. but that the penny-pinching accountants won't let me have a raise then I do take that personally. I'm trying to move up but the company doesn't seem to want to let me. This isn't the way to turn me into an "alumni". Instead I'm going to be bitter at the company that gives lip service to career growth but isn't willing to put its money where its mouth is.
If a company wants employees to say for ten or more years, like they claim, then they need to be willing to pay up. Otherwise I would prefer the "you will be here for three years, then move on" talk on my starting day.
Raising everyone's salary serves as a permanent increase in compensation. It's very difficult to back-pedal from a salary increase. Other perks, which may boil down to monetary compensation, can be added/removed at will with far less push-back.
I vaguely remember a story one time about google (or microsoft) and towels that an old manager told me. But I can't remember what it was. :(
You've got it the wrong way around: usually companies have decided for whatever classist reasons that they have some kind of maximum raise per year. This ensures that after a few years people who are actually getting better at their jobs are falling quickly far below market rate for their level of experience. So, those that feel like they can move on, since it is the only possibility for increasing their pay meaningfully.
This is not specific to engineering positions, it is a pretty common fixed policy in many industries.
Everyone is different. I personally don't consider talking about why a raise is important to you, in a human way, is a bad thing. I wouldn't want to work for someone who thinks that what is most important to me in life is irrelevant at work.
I had that bit as optional because some people want to keep stuff like that out of it, which is fine.
The overall gist is that when making your case, if you truly like your company and want to stay, you do not want to come off as an arrogant, greedy asshole who is up for grabs to the highest bidder. You should come across as a loyal, enthusiastic, high performer who simply wants the salary (or possibly promotion) they deserve.
Sometimes getting you a raise will require your boss having to fight a battle for budget, and to do that, it helps if they actually like and respect you as a person as well as value you as an employee.
I have gotten many raises over my career, so this approach has worked for me. However, every situation and person is unique.
The thing I specifically wanted to highlight (which I think most readers missed) was that not receiving a raise is equivalent to receiving a pay cut unless we're riding at 0% inflation. Every year costs go up for employees and keeping them pegged at the same salary prevents them from being able to cover those costs as efficiently.
I've seen workers pidgeon-holed into low stagnant wages too often to accept it as a status quo when the companies employing them are posting profits - in the modern world we too quickly accept the fact that owners are supposed to take out lion's share salaries and profits need to continuously increase. A business can have a healthy existence just making the economic wheels spin and ensuring that employees are well compensated.
Definitely agree. The one time I ever got a significant raise required me to lobby unbelievably hard despite the fact that I was carrying the weight of my whole team and had to do an unreal amount of shit shoveling devops, web service, and data cleaning work in addition to all the machine learning work that was “actually” my job.
I was lucky that my direct manager valued me and guided me through the process of documenting my accomplishments in the right ways to present the case for a substantial promotion.
Apart from this one time, I have always been told the company can’t offer raises or discretionary bonuses beyond whatever the board grants for cost of living, and have to switch jobs repeatedly if I want to earn more.
I don’t get it. I feel like it must be some misaligned incentive problem with HR preferring to make executives believe turnover and constant hiring have to always be the norm, to justify their jobs, instead of cultivating a culture of long tenures by actually offering substantial raises or bonuses.
I generally disagree. I always feel that it sets a bad precedent by relieving those in charge of having to take the initiative to recognize and reward the efforts of their employees.
If they are too busy to make sure I'm not having to question my value, I would rather find another employer that may not have this issue.
Having said that, money is one of the last things that cause me to leave a job. If I enjoy what I'm doing and the people I work with, it usually doesn't matter (as much) what raises I receive.
I also recognize everyone is different. This is just my preference and what works for me.
As always, it comes down to "if you want your employee to stay, give him a raise (salary, title, perks, ...) according to his skill BEFORE he tries to leave with a competing offer".
There was a post on hacker news a few days ago where everyone was saying that in their experience, non-minimal pay raises always came with changing job, not with normal raises within their current position. Same for me, pay raises always meant changing job, with my employer realizing "oh wait, we were paying you as X but you're actually worth Y, now that you noticed let us offer you an appropriate salary". No thanks.
That's why when google started giving huge pay raises to a lot of people a couple years ago to keep them I actually thought it was a good idea, and more people should do that; if your employees are good, giving them a raise is usually a lot cheaper and easier than finding someone of the same skill and experience.
I don't give a shit about titles I just want to be paid appropriate to the value I create, and unfortunately in most companies, the best way to get a big salary bump is to get an upwards title change.
AFAICT, despite the hype, it really didn't, it just became less significant.
> You can go back and re-read early issues of FastCompany, from the 1990s, where they talk about "you" the worker needs to make themselves essential to the company, because annual raises are dead and only real promotions bring real money any more.
Its true that in private industry, reliable annual increases that are much greater than inflation (and so represent real advancement) are far less common than they used to be. They still happen in some places where people advance within broad pay bands without a change of position or title, so it isn't strictly the case that all real (significant) pay increases come from promotions, but its not a bad approximation.
But even so, annual nominal pay increases that are at least near or slightly higher than inflation seem to remain common in private industry.
Bad idea, in my opinion. This comes across as manipulative and underhanded. My personal policy is that if the companies I work for are not able to compensate me commensurate with my value then I 1) have a conversation with the appropriate people about my dissatisfaction with my pay and the value I provide, and 2) begin looking for another job.
If they value me, and respond to my forthrightness then we'll figure out something workable for us both. If not, I find another job and leave.
Alternatively, you can talk to your boss ahead of time (say 6-12 months) and specify what you want and ask what it would take to achieve the goal (promotion, raise, etc.). Then you execute your agreed upon plan. If, at the end of that period, they fail to uphold the agreement then look for another job and leave.
Your recommended approach is akin to being in an unsatisfying relationship, and, instead of talking to your spouse/partner/etc. you go find someone else then go back to your spouse/partner/etc. and say, well, I'm going to leave you unless you do X, Y, Z. Hah! For most of us that approach would not work out very well, and for good reason. It's not the way reasonable, mature, people of integrity behave.
Plus, I don't want to work for anyone who doesn't actively recognize and reward my value, and who requires (yes, there are places like this) you to go through the whole job hunting process and bring them an offer letter to give you a raise. F that. Ideally, the employer recognizes the value I provide and proactively rewards that value. Second best is employers who will give real raises (10%+) when an employee points out how much value they provide. Third best is real, 10%+, raises annually.
The current status quo of 2-5% increases amounts to little more than COL, and is utterly offensive. That's not a performance based increase, that's simply a retainer.
As an employee I'm acutely aware, as year #2 comes to a close, that if I don't get out there and find something better (better title, better pay, better benefits) then, in terms of opportunity cost, I'm losing money. Though my current position my prove to be the exception to that rule. We shall see.
And yes, I run all the numbers on the total value of my compensation package and any improvements/increases which have transpired over the previous years.
But getting other offers and then using them to force your employers hand is just childish, in my opinion.
> I think the problem is largely isolated to companies in decline or stagnant -- which unfortunately is most companies.
I don't think that's the case at all. I think it's just that typical corporate culture (in the US at least) is not accustomed to giving large internal raises to employees based on increases in that employee's market value.
Most companies base their annual compensation on giving people a few percentage points for cost of living adjustment, then a few more percentage points based on performance. They standardize those numbers so they can say, 'you did average, you get 4%' 'you did great this year, you get 6.5%'.
Many, many companies don't factor in at all that employee value on the market can increase much, much faster than 2-8% per year. Even companies making money hand over fist. The usual way of approaching annual raises is wildly unsuited for compensating talent that is in high demand.
Most companies are inclined to think of raises as tiny annual percentage gains, which may keep in step with cost of living increases only if you're lucky. If you ask for more than that, managers are trained to save the company money and not honor the request. They're expected to call your bluff. If you show up with an offer from another employer, they may counteroffer, but may just as well let you go because of your "disloyalty". People can and do often suffer retribution when they ask for raises.
The business world sees things completely differently than the engineering world.
>Don't promote people upwards unless they are willing and already working at this level. Give them a simple raise instead.
I don't disagree, but I don't think there's anything simple about the process at all.
1. this obviously works against the company's interests, if they assume the employee is satisfied. short term business sense says they want to get away with paying as little as possible for labor, whereas employees want to be paid as much as possible. It's an eternal tug of war. And to be honest, one the tech sector has relative advantage over compared to other industries.
2. Even if we get over this short term block, figuring out how to give "merit based" raises can get very tricky, very fast. Especially if you leave the onus to not the developer, but to the manager's perception of the developer to determine.
This not only has bias on how much they/the company values a project (e.g. would working on a "simple" adtech feature be worth more than the labor overhauling a failing product to fail less? The ad product makes the company more money after all). But on their bias as a person. Would Manager give Bob a bigger raise because he goes to Karaoke on Thursday with the company, over John who has to get back to his family after work? Worse yet, would Manager implictly give Janet not a different raise than Bob due to subconcious sexism and not actually doing more work (be it preferential towards or against Janet)?
It's a whole mess, which is why companies try to objectify the whole thing. At least there, there is no room bias outside of who can pitch themselves better (if we assume equal work done).
3. Even if we arrange all of the above, raises aren't typically something a direct manager has easy access oo. It involves several lines of commands to appeal to and approval, beholden to a bunch of budget issues beyond a typical manager's control. Even if they truly want to compensate properly, the company itself may simply decide that they'd rather take chances hiring someone new when/if they need to maintain a potential void, over potentially compensating someone who was
I think the 3rd point is an interesting quandry since it goes against the usual mantra of "People leave managers, not companies".
(Also, fwiw, it's a non sequitur - I sat in Latin classes for 8 years and I still can't remember the conjugations well enough to explain why, but, long story short, it's a verb and so it doesn't obey the familiar rules of (even Latinate) English noun endings.)
((Also, that was a very classy and magnanimous response to a – speaking of the comment as distinct from its author – very classless and pusillanimous comment. Chapeau to you. I can't say I'd have managed the same myself.))
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