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Home  > Article

Must I settle for a 3 percent increase?

Salary.com

Could you be falling further behind every year? Typical raises vary with the economy, but on average have been about 4.1 percent per year. If you regularly get less than that, you could be falling behind in your earning power.

Q. I work in a hospital in Florida as a computer operator. Before this I was a computer operator at another company for almost 20 years. I am paid a salary of $19,406, well below the Computer Operator I salary quoted in the Salary Wizard, $25,310. I really like the company, the job, and the people I work with.

The hospital management does not seem to care about what they pay their staff. They are giving only 3 percent raises, and I don't think they'd try to stop you from leaving if you asked for more. I am a good worker, I work most of the overtime they ask of me, and I am not out sick very much.

A. Your employer may have some catching up to do.

If your employer is paying 3 percent raises in a down market, it's nothing out of the ordinary. But if a 3 percent merit increase is typical for your employer, you've been falling behind every year. Salaries move at different rates every year, but typically by about 4.1 percent. Inflation is low, but a 3 percent increase just barely keeps pace with the changing cost of living.

It seems to me that no one has recently adjusted your salary to reflect a competitive market rate. Jobs have a fair value on the market, just like a car has a Blue Book value. Your employer is paying less than the market rate for your job.

There are several reasons why an employer might pay less than market. First, the employer may not know the market rate. That's unlikely, since most employers use salary surveys to price their jobs, but it's possible. A second explanation is that the employer's pay philosophy may be to economize on labor. The organization may have severe budget restraints, or be in financial trouble. The organization may keep raises down if it is hoping to encourage voluntary terminations. Sometimes the reason an employee is paid below market is that he or she is a poor performer.

For whatever reason, you are being paid below market. The good news is, when the HR department makes a market adjustment to a job, it doesn't usually come out of the same budget as the annual merit increases. You might be able to negotiate for more without upsetting the internal pay structure.

If you'd like to try, approach your human resources department and ask to see their numbers on what your job should pay, and if their number is comparable to the figure in the Salary Wizard, ask why you're being paid less. If their number is lower, make sure to ask what year the salary was benchmarked.

If your employer simply won't pay more, you may have to decide which is worth more to you: the pleasant working conditions you described, or the potential to earn what your job is worth in another organization.

Good luck.

- Erisa Ojimba, Certified Compensation Professional


Copyright 2000-2004 © Salary.com, Inc.






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