Two questions: 1- Do companies usually give a raise of at least the inflation rate or it's whatever they feel like it even if it's pretty low?
2- I feel I want to have a talk with my manager before the next year raise particularly saying I wasn't happy with the earlier raise. How do I communicate to the manager that if the company is going to give low raises again, I am going to be pretty unhappy. I want to let him know that I will consider leaving the job without telling this directly to him.. or should I tell him? They like my work but I don't know if I am dealing with a company that has the attitude of "If you don't like it, leave the company". It's a big public company.
I like the company and it will be pretty hard to find something better. Better to me are a few things other than salary. My salary is above average and it will be hard to find companies with matching or better salaries. So I feel I am kinda stuck. I don't want to move to another city. If they keep keep giving me such raises, I will feel they are using me.
What do you guys do in such situations?
Usually the only way to increase your pay is to get another job or threaten to leave your job if you don't get a raise. Threatening to leave is generally a one-shot deal and will probably paint a permanent target on your back.
My sad advice to maximize earnings is to stay at a job for 2-4 years then move on for a 15-20% pay raise.
1. You may find yourself doing work you enjoy and have a great boss but realize the pay is no longer competitive (and has no potential to ever become competitive). There's risk in leaving and landing in a place where the work sucks and you make a lot more money, but is it worth it? It's sad to leave work you enjoy knowing your boss desperately wants to reward high performers but is stuck playing a shell game with an arbitrarily fixed award pool.
2. I've come to realize that, even to engineering companies, doing good work is rarely the thing that leads to rewards (promotions, bonuses, raises, etc.). You'll do great work that is very valuable but watch some idiot politic his or her way into a position of influence and get rewarded for it. I used to think this was just an isolated incident but now that I'm on job #3 I understand this is just how the world turns. So when you go to look for a new job to get your 20% raise, unless you have a source to tell you how it really works on the inside, there's no way of knowing if doing good work is the thing that will be rewarded at this potential future job.
3. If you're good at getting things done and leading others you'll inevitably accumulate leadership tasks. So you'll be doing your work but also naturally end up leading the team around you. Many companies have specific slots or job titles allocated to "team leads" or similar. Unfortunately, these positions rarely go to anyone who is new (<5 years at the company). Of course everyone knows that it's rarely worth ($) staying at a job for more than 2-3 years, so who gets the leadership positions?
People who:
(1) Stay because they like their job and don't care to make more money (these people may or may not have any leadership ability)
(2) Want to leave to make more money but cannot find a job anywhere else
(3) Have some arbitrary characteristic, unrelated to actually doing any real work, the current leadership finds very important (Example: The VP of a large division wants more clout at conferences so they hire and promote PhDs into leadership positions. Why? Because within their award framework the only way to reward them is through promotions.)
This is sad because if you'd really like to stay in that "team-lead" position, or move into project management, every time you take a new job you have to start over. You get better at convincing your new boss/coworkers you're capable of this work but it's difficult to go from engineer at one company to team-lead at another. And realistically, if you never stay at a job for more than a few years is it worth promoting you into leadership positions? It's a catch-22.
I would be pretty happy if I were in your situation.
It's completely possible to be overpaid and also unhappy with your salary. Inflation exists, and nothing is immune from it. A pay cut is still a pay cut.
Step 2. Take the new job.
Rationale for not making a stink with your current employer or negotiating with them once you have an offer:
1. right now you likely feel some combination of under appreciated, used, taken advantage of, etc. and that feeling likely won't change as time goes on. You are likely not wrong for feeling that (even if you suck and are lucky to not be fired). The compensation system didn't meet your expectations and there is really no way to remedy that.
2. Current company will likely not match a 20% bump and if they do it will further the aforementioned feeling of being taken advantage of.
It's time to move on.
It sounds like you might not have known this before, so at least now you do. It doesn't help to complain about it to your manager. They know what they are doing. And they'll know why you left when you do.
If you are better now than you were when you started, then it might be time to start interviewing. Take a new gig that pays more. Repeat every couple years until your market value is where it needs to be.
It's a sad state of affairs, but in absence of any way to change it, the best thing to do is act accordingly.
I stayed with a company after they gave me a 0.25% raise in a year. I stayed because I loved the company. As soon as that was not true, I started looking for a place with a similar benefit package but a higher salary, and I found one. Talk to your boss very casually. Don't demand more money, but let them know you expected more and ask what you could do to earn a better raise in the future. If there is nothing you individually can do that will impact your future earnings potential at the company, that company is just a short-term step on your long-term career roadmap. Enjoy it while it lasts, and keep one ear to the ground for better opportunities in the future.
My second job after graduation actually meant almost 100% pay raise. After that it slowed down but I still usually get extra 10-20% every time I switch jobs.
So finding a new job that will pay 20% more is probably unlikely...
The question is do you like the people you work with, do you have fun at work?
If yes, try getting other benefits, like going often on paid training/conferences to improve yourself, maybe company paid MBA or my favorite: working from home - for me this and my team is what keeps me from early retirement...
If you don't like it anymore, find another job, but the grass is not always greener on the other side...
it's hard to find an answer to question 1, as those who know the answer don't want to make it public, but my guess is it's "whatever they feel like" depending on many factors. Those factors can be out of your control or not (budget issues, crappy project where your skills didn't shine, or you preferred taking it more easy because of your life choices)
If you salary is above average and you won't find companies with better salaries, then you're probably one of the highest paid in town, you should feel good about this. But if you know other companies around who pays better, then one course of action is to apply to those in hope of a better salary. If you have friends in those companies, try gathering information about their past year raise and their salaries. Try gathering information about friends in your current company too, but not close co-workers, as they might feel uncomfortable discussing this. Instead, since you're in a big company, ask people in a team far away from you, you don't need the exact number, but at least an approximate that you can use in your talk with your manager. Try to find the policy at your company, if they say somewhere (could be in your offer letter) the yearly raise is between 0 and X%
Regarding question 2: yes you want to make it clear that you want a bigger raise, but you don't want to appear greedy. You can mention cost of living in your town, the raises that your friends in your company got, or it's even better to mention the raises your friends got at the other companies, this will give a cue to your manager that you know you could get a better deal somewhere else. Don't say "I want more money", but instead show that there's a sound reasoning about why you want more money : The cost of housing is going up significantly, you want to start putting money aside for a future down-payment, inflation rate is X%, etc. Since you did a good job you think the You today is a better asset to your company that You last year, because you now have expertise in X, Y, Z, and delivered A, B, C ... , so you'd expect a raise that reflect this, accounting for inflation of course. Assuming you know the policy about raise between 0 and X%, and let's say last year you only got X/3% , you could say that you've made a lot of progress this year, try to make your manager acknowledge your accomplishments, and once he does, say that as an above-average you expect at least X/2% given the annual raise policy is between 0 and X%. Since inflation was pretty strong this year, you'd expect even more to catch up.
Finally, you might find useful advice on how to approach these kind of situation, better written, in the book "Getting to Yes"
