Ask Sheri

Insulting Wage Increases

Jun 28th, 2014

I currently work in a leadership position within a growing division of a profitable organization. I've been with the organization just shy of 10 years and continually surpass my annual objectives year after year. During annual merit time, I regularly receive what I would call insulting wage increases. Although the annual bonus has been healthy, I'm quite frustrated by the measly salary percentage increase, which resides just over the cost of living. Although I have several confidants (peers) whom I would trust, I'm rather embarrassed with my merit and have decided against comparing notes. I'm curious though, as to whether this was a sole issue directed at me or one that spread throughout the company. What might be the best way to address the situation?

Sheri's Response

First off, you should be commended on your loyalty and tenure within your organization. In today's world, valued contributors possessing organizational human capital rarely stay beyond 5 years if experiencing this type of frustration. Having said this, I have several questions. One, have you confronted your superior directly regarding the low percentage? What was his/her explanation? Two, do you have any insight into the general merit pool budget across the organization? In mid to large size organizations, leaders are typically provided a merit pool which can be distributed discretionarily. If your department is small however, it may be more difficult for your leader to financially reward strong performance, as others will then have to receive very small increases. The larger the department, the easier it is to provide healthier increases to those justified. Most organizations tie merit payouts to performance and should provide an increase scale based on results i.e. exceeds expectations = 4-5%, meets expectations = 2-4%, meets minimum expectations = 0-1%. Now, other factors may also be taken into account, for example, where your current pay may fall within the wage range.

I would suggest setting up an appointment with your leader to share your continual frustration with your annual increases, and propose that if your solid performance continues, you would like to receive a merit adjustment in six months. Offer that you will in no way publicize this action, however it will make you feel as if your hard work is valued and appreciated by the organization. It might also be helpful to bring in your self assessment (if customary) and/or your key accomplishments, warranting the special wage adjustment. You will be selling your position. In the end, if the organization continually refuses to recognize key contributors such as yourself, it will be eventually reflected in other organizational measures, with the first being turnover.