This is it…the one time each year when we suck it up and ask for more money. It seems reasonable; you work hard, you showed up on time, you definitely deserve more than Charlie, why would you be denied? Could it really be as a simple as “yes” or “no” from your manager? It’s not like you’re asking for a big raise, it’s only a few more dollars per week.
You are not alone. Actually, this time of year it is very common for employees to begin to look at their compensation and wonder what the New Year could possibly hold for them. It’s also the time of year when businesses begin to look at their finances and being to plan for their new fiscal year.
The foundation of employee compensation can be explained in the laws that the government has put into place like this one, that one and this other one. Companies are incentivized to do their absolute best to make sure that their pay practices are fair and equitable. If companies are found to be in violation of these laws, then the consequences can be very severe and expensive.
Working in HR, I often hear the following phrase “This is a big company; they make enough money to pay me another $.50/hr”. It’s understandable not to understand all of the nuances that effect compensation when you do not work with it every day. So, it should be no surprise that there are applicants, employees and even random people who actually believe this statement. These people have come to some sort of random conclusion that compensation is just their base rate of pay, and that the company that they work for or want to work for is just being plain greedy.
Let’s take a look at this logically. If your position is a 40 hour per week position, then a $.50/hr increase to your base rate of pay would be an additional $1,040/year. If your company is nice enough to offer you benefits, then please remember to add on the expense for your benefits. This expense is approximately 15% – 33% of your annual salary (please note that this is an estimated/average cost and the actual percentage will depend on the company). Don’t forget if your employer has a retirement program (pension plan/401(k) or 403(b) match program), then that would be an additional 5%-10% annually (estimated). Also, please add in the increased cost of any shift differential, overtime, on-call pay, holiday pay, sick time off, vacation time, preceptor pay, education pay, etc ……these would all be costs incurred by the company.
Finished doing the math? How much does it come out to be? I bet it’s a little more than you originally thought, right!
When you are finally get up enough nerve to have a compensation discussion with your boss again, just remember to keep in mind what that company invests in you already. I’m sure you are worth that extra money, but make sure you let your boss know that you are appreciative and understand the monetary commitment that the company has made to you at this point.
Besides, Charlie is probably lying about what he’s making, so to hell with him.