My company did a 5% across the board raise late last year to make-up for inflation, since before then raises were ~2%, roughly keeping up with inflation from previous years(in Canada). This raise was on-top of the additional raise we will be getting this year in March, so it does seem like my company currently cares about ensuring we at least keep up with inflation. The expectation from talking with some coworkers is that they will continue this trend and at least give us a raise that's keeping up with inflation, although I have no proof of this. I do think you're getting screwed over here, getting a sub-inflation raise when you're exceeding expectations sounds awful. Maybe compensation works differently when you're higher up (maybe because you have far more equity/bonuses), but it couldn't hurt entertaining other offers to see what's out there.
This is a slightly controversial opinion, but I'm opposed to company wide percentage increases. 5% for someone on 100k is 5k. For someone on 500k it's 25k. So there's an unintended consequence of increasing pay inequality between the lowest and highest paid staff, increasing any gender equality, etc.
If the intention of an flat company-wide increase is fairness it should be a fixed dollar amount that's the same for everyone. I've never seen a company do that though.
They're not aiming to be fair. They're aiming to reduce turnover. If they gave a flat amount to each person that would matter more to the lowest paid. They would in effect be penalising the higher earners. That's not "fair" either.
I don't really agree. There's no good reason why "5% for everyone" should be considered fair while "$15k for everyone" isn't. They're both justifiably and rationally fair. The only difference is that one is calculated based on existing inequality, and furthers that inequality, while the other doesn't. People who benefit from that inequality like to argue that its fairer, but that doesn't make it true.
I'm sure that any company that implemented a policy like that would lose some senior staff (maybe not such a loss if they're people who think perpetuating inequality is good), but the junior staff would be much more likely to stay. If the point is staff retention, then you have to consider which staff you want to keep.
You want to keep the higher paid staff more than the lower paid staff. That’s why you pay them more.
Which staff you want to retain depends on a lot of things other than seniority and pay, but that's not the point. More senior staff are already being paid more.
Let's reframe this problem slightly. Imagine you have two people, one on 100k and the other on 500k. The difference in 'value' is measured as 400k. If you give both of them 5% raises, so one is 105k and the other is on 525k, the difference in value is now 420k. Why has the pay differential between junior and senior staff increased by 20k now? If you don't fix it, over a couple of decades you're going to be paying your junior staff an order of magnitude less than the seniors. How do you justify that?
Here's another example. Imagine there's a company where seniors are paid slightly different amounts despite doing the same work. One is on 200k and another is on 180k. If you give both of them 5% that's really giving the higher paid one 1k more (10k vs 9k). You can't claim that it's fair to give someone a bigger pay rise on the basis that they already earn more. That makes no sense.
Blanket percentage-based pay rises don't work. Companies should be more intelligent and work out more nuanced solutions.
> You can't claim that it's fair to give someone a bigger pay rise on the basis that they already earn more. That makes no sense.
That it does not accord with your intuitive sense of fairness is not an argument that other people have to bow to. Treating everyone the same according to a blanket rule, uniformly applied, is absolutely a kind of fairness.
Fairness is a subjective judgment, not a property of the universe. Which criteria to be used in making decisions is a choice, not something immediately obvious.
Interesting perspective, haven't thought about it like that. I think this % increase across the board was just so everyone is still making the same amount relative to the price index, so might not be applicable here for that specific increase. However, I believe my company still does approximately the same raise % for everyone in a particular org/department every year, which has the troubles that you mentioned.
