Hey Boss, Can You Spare a Raise

Hey Boss, Can You Spare a Raise

Don't count on getting much, even if you're doing a great job

The heady days of chunky annual pay raises went out with the greedy 20th century. The typical raise for a job well done these days is about 4 percent, not much more than a cost-of-living increase. Twenty years ago, the spread between the average raise and the consumer price index was a slim 1,7 percent, and it's projected to get slimmer still, to mere 0.8 percent in the next years. And workers shouldn't expect a pay raise just for doing satisfactory work. You're going to prove you've done a spectacular job.

So who's making out like bandits? The guys in the corner office, that's who. The income gape between chief executive officers and average workers keeps getting wider. In 1999, according to Business Week, the average CEI earned 40 times what the average worker makes. Fifteen years later, the chiefs were earning a staggering 150 times more than the troops in the trenches.

The bigger the company, the bigger the bucks for the guy at the top. The income gap between chief executives at big corporations and those at smaller companies grow, according to many studies by human resources consulting firm. Total salary plus bonus for heads of small companies rise just 3 percent every year. Bu contrast, a Mercer survey of 350 Fortune 500 companies show that they increase cash compensation for their CEOs by 8,1 percent.

Widening pay gaps are, in part, causing companies to look anew at how they reward employees. Traditional tier party pay structures are fading fast/ On the rise are more flexible “broadbanding” pay systems that cluster job categories into a handful of layers and consequently produce flatter and less hierarchical organizations. So far, only 8 percent of employers surveyed recently  by Mercer use broadbanding of salary ranges, buy 31 percent are considering a switch.

Companies also are experimenting with “skill-based pay,” evaluation systems that determine raises by skills, not job title. Part of the reasoning is that this way workers will take more responsibility for their own career development. Many companies that are adopting skill-based or competency-based pay also are helping retrain employees.

“In this new world where skills and knowledge are what really counts, it doesn't make sense to treat people as jobholders. It makes sense to treat them as people with specific skills and to pay them for those skills,“ say experts and proponents of skill-based pay.

Updated regularly by the Bureau of Labor Statistics, the Occupational Outlook Handbook is a treasure trove of useful information The book covers the training and education needed, earning, working conditions, and employment prospects for job from accountant to zoologist. In real life, of course, salaries can vary considerably by region, level of experience, and other factors, but the list does give a good comparison of average incomes. Photo by Elena.

So far, the approach has worked best with factory workers, but it also is spreading to white-collar jobs. Part of the problem: skills or competencies are not easy to measure at the managerial level. Still, many companies are giving it a shot; over half the Fortune 1000 companies now use skill-based pay in some form, according to a few studies.

Another innovation: the boss no longer is the sole judge of performance in many offices. Companies are calling on co-workers, customers – even subordinates – for so-called 360-degree feedback. By one estimate, a quarter pf a;; companies now tap peers to review an employee. Some companies, like Honeywell, base raises on such reviews. Others, such as Sprint, use them, to spawn ideas about how to improve skills.

Not everyone is pleased with 360-degree feedback. Critics say that sometimes being reviewed by so many people sends unclear or conflicting messages about an individual. One piece of advice from the experts: Demand anonymity if you are reviewing your own boss.

Seven Guaranteed Ways to Get a Raise

Just kidding. But, hey, why not give them a short? Here's the best of the advice that's out there. Your particular strategy will depend on your spot on the totem pole.

Don't be shy, claim credit: The farther down the rung you are, the more you need to do to make sure your boss knows about you.

Make yourself indispensable: Spread your skills in a number of areas within the company. Your market value is tied to your particular set of skills.

Convince others of your talents: Prove not only to your boss but also to customers, peers, and subordinates that you have special skills. Don't make threats: Your bluff may be called if you threaten to quit. But courting real offers from other firms can be an effective ploy in winning pay increases.

Stress quality and efficiency: Mangers hold on to talented staff; those who use assets wisely are most apt to be rewarded.

Don't compare yourself to a better-paid co-worker: You're setting yourself up to be put down and have your co-worker's praises sung.

Choose the right industry: A company that's downsizing isn't likely to hand out generous pay hikes. More often than not, pay raises are linked to industry-wide performance variables. Working extra hard in a floundering industry won't help.