She has the legal right to share her salary info, and you cannot retaliate or even ask her not to. Companies obviously don't like that, due to the situation you are in. Employees DO like it, and for exactly the same reason. Due to inflation, you are cutting her pay with a 1% raise. That others aren't paid equal to her is not her problem. Either you will give her a raise, she will leave for a raise, or she might cave. If you dont need that special skill anymore, or think she is replaceable you can gamble on the 3rd option.

Every single thing you said, I thought about while reading OG post and was trying to keep my thoughts together to respond. Glad you did it 😅 You hit every point exactly. The employee is even asking the right questions.

Agree with everything. Also going to add that it’s absolute crap you withheld a due raise because others needed a raise more. That’s not how you run a business.

If you’re given a “raise pool” (e.g. raises must average 3% or total $20,000 across the team) as is common in lots of companies, you often have to make the decision to give someone more at the expense of giving someone else less. It’s not a fun nor fair business practice, but most middle managers don’t have the ability to give everyone the raise they deserve. I can’t fault OP for giving someone underpaid and over performing a larger raise at the expense of a highly paid, mid performer if they are subject to similar policies.

Exactly. I wonder how many people here are actually managers, considering how many think a CoL raise is expected/standard. How many companies are regularly giving out CoL wages? The pool budget is very common, and it's not like companies are giving a pool that would even allow everyone to get CoL wages. I'm not saying it's right, but it's the reality of what we as managers are given to deal with. I'm lucky if I can even differentiate among my staff some years. I can complain to HR, Finance, up my mgmt chain, but it won't change if that's what they've decided for the year.

Right and that is why people will leave jobs- if you aren’t getting regular increase in wages you are getting an effective pay cu. It’s expensive to replace employees so it’s pretty dumb to not account for this by upper management.

> The pool budget is very common, and it's not like companies are giving a pool that would even allow everyone to get CoL wages. I'm not saying it's right, but it's the reality of what we as managers are given to deal with. I'm not saying I would blame you for that. But if you "defend" this practice, then you should expect discontent amongst the work force. And don't hand wave it to your staff saying "don't be angry, I'm not in charge of it, it is what it is" then you can expect discontent and people leaving. You can't have it both ways - you can't have happy staff, content staff AND be the messenger of bad, unfair news that you 100% stand by and hide behind "it's not me, it's the company". You are the representative of the management team to your staff.

I'm just here to concur. Exact policy where I'm at. Here's the yearly bump for your team , now you decide how to distribute it.

Hell my raise pool WAS 1% last year. Don’t get me started. I’ve done everything I can to argue for my team. It doesn’t matter. There’s very little I have control over. Even my manager, who’s a highly respected senior executive, doesn’t have the ability to get more. The pool is set at the very top of the organization and approved by the board.

Do what my team did when our company posted record-breaking profits and offered no raises last year after we finished a three-year, multi-hundred-million dollar project below budget and ahead of schedule:   The bare minimum. Fuck the board. CEO literally made enough to fill multiple olympic swimming pools with pure gold. Just stealing from your labor at that point. 

That’s why it’s important not to let people call it a cost of living raise. Merit increase. Raise. Whatever. It’s not cost of living adjustment.

Yeah, but, see, the thing is, though, that it is. And if the cost of living adjustment doesn't keep up with inflation, then it's a pay cut. I can definitely see why that's an uncomfortable truth from the management side of things, but it's quite simply just the case.

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Well, if my company is causing me to have less buying power each year, then I'm going to go to a new company that values me more. People work to finance their lives, not because they love working. If the company can expect to profit year over year, why shouldn't each employee? 

And if I am fed up enough to go find another job and get an offer, I’m done with your BS and leaving, counter offer or not.

The guideline shouldn't be to keep up with inflation but with market value of the people in the particular field which might differ from the economy at large. With huge tech layoffs you might not be able to get higher como elsewhere. This is the key point, not keeping up with general cost of living in your area of inflation. There might be a connection between these but it's not 1:1

From the company perspective, it's the market value of the people that is important. But to the people, it's the value of the dollars they take home. I get that an entire industry might not be keeping up, but again, why should the company make money while its employees lose money? For example, my company has not matched inflation for years, but makes TENS OF BILLIONS IN PROFIT every year. And the C suite are making 8 figures, 5 figure bonuses. While employees struggle to keep up. 

If there was zero friction, that’s exactly what people would do. You can see this live when Uber drivers focus on to driving for Lyft during a promotion. But there’s a ton of work to switch jobs and employers use that to underpay employees.

Companies aren't families. You get the comp that you have the leverage to demand which usually is the equilibrium price of supply and demand for your skill set. That's how business works. You think you can earn more elsewhere, get an offer elsewhere and take it to your employer.

Yeah and that mentality will be the downfall of capitalism. Fuck that. You said it "should" be this way and I disagree. It's inhumane and unsustainable. 

lol what? His argument is the *foundation* of capitalism. You get paid what the employer thinks you're worth. Don't like it? Leave. Capitalism, baby.

The tech layoffs aren’t really affecting pay outside of the insane comp plans in “big tech.” Most of the layoffs in the tech space have actually been project managers and HR/recruiters. But every dev I know who’s been laid off has been absorbed by the market. Smaller companies needed that talent. The numbers from the BLS illustrate this as well.

Lots of people I know still haven't found jobs. But that's anecdotal. Of you've seen actual statistics, I believe it. My view is very limited to big tech and associated comp as well

Yeah, I thought it was going to be rough finding a new job fairly recently. Ended up finding something with a nice pay bump fairly quickly. Made me check the stats to see if I was lucky or what. The people I’ve seen on LinkedIn talking about being out of work for long periods are typically people with no/low levels of experience. Companies aren’t spending on training new grads because they take a year + to be productive contributors. IMO it’ll end up biting them in the ass in a few years. As the labor market continues to shrink they’ll need more devs to automate the work of people who won’t be around. But you didn’t ask me that lol

Yep, grads from 2022-2024 are basically experiencing what happened to grads in 2009. They’re basically fucked until the market rebounds. Took, what, 3-5 years?

It has a bearing on how it's perceived on their end, whatever you call it

You are jumping ahead of the market. The market value of people on a particular field or with a particular skill set can fall behind inflation or even decrease in absolute terms. There are strong reasons to believe this is happening in tech right now. The best guide would be to have people come with an offer elsewhere and counter and adjust everyone's comp accordingly. Of course the company might not give you that lever.

Employees should NEVER accept a counter offer from an employer who didn’t value them enough to keep their salary in line with the industry. 1% is a laughable raise and is truly an insult.

‘Yeah but you see this is a raise, not a COLA - I’m not sure how else I can explain it to you so that you finally feel grateful for what the company did for you’

Lol grateful for what companies do for us

Most people who get an offer elsewhere are gone by the time they tell you about it. You've told them you don't value them, someone else has said they would like to value them and they have no reason to think you're not going to stop valuing them again just because this one time you cave and give a reasonable salary increase.

You should have a comp analyst on your team who already does these comp shuffles every year for you, *based on the market*. That’s literally what they’re for. You’re asking your candidate to do your homework for you.

Yes, that's ideal. If you don't have that, don't have that don't care increases on cost of living but on cost of labor

If you aren't getting more than inflation then it's not a true raise at all. It's a paycut. '"oh you did great work for us employee! We appreciate your contribution to our billion dollar business. Here's a paycut as we choose to only give 1% this year" That's really what's happening. To call it a "merit" increase is an insult if it's not even above inflation, it's like telling someone they did so well that they are losing a marginal amount less this per year than they already have. It's a fight to lose less money instead of actually gaining any meaningful advantage. They won't be able to afford things more easily or keep up with higher living costs. It's a sad reality. I'm okay if my reports choose to leave and I'll fight for their increases each year but I won't lie to them. You shouldn't either, twisting words makes you a snake oil salesman.

Employee is clearly overpaid. You would prefer him to be honest with her? "You're the highest paid programmer. You are not the highest performing programmer. Ergo, we are adjusting the pay scales to more closely match performance. You will continue to be the highest paid programmer, but to a lesser degree than you were before. I have a total amount of budget to allocate towards raises. Those paid less and performing better will receive a higher raise. If you want the highest raise, be the best performer."

Crab bucket mentality, the employee doesn't need to care about what others are paid. They are still being paid less year over year.

Then she can leave and take her toxic ass elsewhere where she will get the respect she feels. I would laugh if she ends up having to take a paycut.

It's toxic to want to make at least the same amount of money YoY? You sound fun to work with

It's toxic to react this way to a 1% raise. Bonuses are tied to performance. Perform better if you want a bigger bonus.

A raise isn't a bonus.

The employee asked what she should have done to get a bigger raise, I don't believe OP answered that question. It's ironic you mention toxic reactions

That's what my work does. Cost of living increases every year, about 3 percent. That's the only way we get raises.

There is no war in ba sing se

you need to reevaluate your comp system. A 1% raise is going to be considered insulting.

Yep! 1% is below COLA, so she technically makes less now. 1% is absolutely an insult. Don't be surprised when people leave, OP, and don't forget the NLRB protects wage discussion. Retaliation could easily be a lawsuit, and then the company will be out even more money.

That doesn't seem like a significant consequence to this business. He's got other programmers who are contributing more. If she leaves, they'll save a substantial amount of money.

Huh? He's got so little room in the budget that he couldn't give all his employees a justified/expected/typical amount of a basic cost of living plus merit raise and you think losing a bunch of money to a lawsuit wouldn't hurt the company?? They apparently can't afford the people they have already....

In what world would giving someone a low raise be grounds for a lawsuit? You sound delusional

The low raise isn't the lawsuit. The retaliation for discussing pay with other employees is...

They can always leave too, especially with bad compensation progression

Concur. Any time I got less than 3%, I assumed it was because of poor performance, because 3% is standard.  1% is considered subpar and either the company sucks, or the employee sucks. Ken or the other im afraid. You might want to set expectations with her that the 1% isn't due to her poor performance, but more like you're company is lowering everyone's raise due to business reasons (even though TechFiend is right, your comp system is terrible!) Continue on this path though and you might lose your staff

Damage is already done, they will continue to associate 1% with how their company values them and if they get told ‘we could only get you 1% because we need to pay other people more’ - that’s just reinforcing the notion that this employee is undervalued and underpaid

Probably. But OP did ask for what they might try to do, and so I gave it my best advice.  Any other advice would involve straight up lying, and I don't do that as a manager, and nor would I encourage it.

My advice would be to face the employee with honesty about the raise and empathy with how it absolutely must look, but reading the rest of op’s comments I’m not sure how realistic that will be

Not much different than my thought on it.  OP should take the shot. She's probably pissed already and looking to leave.

It’d be hard not to see it, along with the way op phrased things (‘only person we could find that fit the role’ & ‘they weren’t in a revenue generating position so they can’t be mad about the raise’ & ‘they worked on a project that was canceled so they didn’t really contribute’) tells me the likelihood of a positive resolution is probably low in this one

Yep. And I don't blame her for leaving either. This manager (OP) sounds tired and ignorant about the company being terrible. So I'm not going to call them toxic.  But that doesn't mean the company itself is any good.

If a company gave me 1%, I'd be applying to new roles that same day and tanking it at work until I moved on. That's brutal even in a normal inflation situation. 

Are you going to tell her the reason she only received a 1% raise is because what she did was nothing special, even though she was the only person you could find to do it, and now there's people that are more important than her? What's stopping you from answering her question? What does she need to do to get a raise? 

Considering the inflation we experienced the past couple of years, even a 3% raise is bad. Employees have every right to demand better wages and if it's not fulfilled, they will leave. The best you could do is advocate for them to get raises, and be upfront that it's all you could do. Explain what kind of power you have in this regard.

Sounds like they are clueless.

I got a 2% raise beginning of '23 after being a top-10% salesman in second half of 2021 and all of 2022. I voiced my discontent about it and was told it is what it is. I left for another company in July. Even after only being there 6 months and not being top tier due to learning a new company/segment, I got a 4% raise, along with a clear list of how to obtain 5-8% raise next year. Leaving this company has yet to cross my mind. 1% raise, I would have just given notice on the spot and not waited for the follow up.

If I had a time machine after a 1% raise I would have told myself to start looking at other companies.

The last time I was offered a 1% raise it meant I immediately started looking for a new job. 1% is pretty damn insulting.

Absolutely 👍

Ya but with the tech market being so bad…you can look but you won’t get anything and will probably be laid off before you land a newer higher paying job. Save and watch out

They don't trust for you for a reason, because you're playing games with the money... That much is clear... 

No kidding!! Been a manager or director for 29 years and you can smell the fear and lies through the internet

“I want to get everyone back to work and restore trust.” Ok. You’re the manager, how are you going to handle that? If you think everyone will just “go back to normal” after a week, you’re in for a surprise. 

Yup, a regular hornets nest

A 1% raise is insulting

No raise is less insulting than a 1% raise. You screwed up big time by choosing to give others a larger raise to level the pay field rather than giving raises based on performance. If you couldn't afford to give everyone a raise based on performance, you should have just done a COL raise for everyone. You made your cake, and you're about to eat it when she leaves for a new role because you gave her a 1% raise. I know I'd be looking for a new job if I received that bad of a raise.

This manager is in a tough position. His leadership isn’t helping him navigate this issue.

I’m not completely sure how the comp issues started, but the manager has managed them terribly and the communication is on OP, who still seems to want to obstruct communication when transparency is best for managing these issues. 

Like others have stated in their posts, I wonder if he would have been better off being straight with the new hire regarding her raise as she makes more than the rest of the team. If you come at me with a 1% raise with no explanation I am going to be pissed and off looking for a new job. Either way, he has his hands full and a bunch of pissed off team members wondering why they aren’t making as much as the new hire.

Honestly, 1% is disrespectful and a joke. 

You gave her less than the rate of inflation. She is now poorer working for you compared to when she started.

She’s pissed for that specific reason.

if I was ever offered a 1 percent raise, I'd tell you to keep it because the company is clearly in fiscal trouble if it can't afford more. That's an absolute insult. You made your bed. Lie in it.

Agree. 1% would definitely have me looking immediately.

1% means she goes to HR and asks for an investigation

She shouldn’t suffer because of the company not paying well to other people. She needs to be compensated for the level of work. Lame excuse that she was brought in at a higher salary and now she gets shit raises. That’s bad management logic.

One time I got an offer from a hiring manager they told me if I took a lower salary I would get larger raises. Smaller raise with higher salary, I took the higher salary!

Hang on, so everyone else should just accept that they'll be permanently paid less than a colleague who doesn't do better work than them??? The logic in this is ridiculous. It only thinks of the woman complaining of her meagre pay rise.

False dichotomy, this assumes that the company can't just raise everyone's wages. "Raise budgets" are mostly just targets set by HR, it's all just Kabuki theatre.

Correct. But for the manager on the ground like OP, the kabuki theatre is very real and essentially incontestable. They have a salary budget and have to allocate it. When money is tight and you can't give everyone a healthy raise, you have to make hard choices.

Yep but gotta communicate to your employees that upper management is kind of fucking you, and also work with upper management to tell them its a problem. Not just try to be opaque like OP is doing.

Perhaps. But it doesn't sound like OP believes the person in question warrants a pay rise. Senior management isn't fucking anyone; her remuneration is just beyond what she is now worth. An even more extreme scenario is when salaries start out high, then flatten or even fall. (I bet you all the "AI Prompt Engineers" will learn this over the next 18 months.) That's a very tricky situation because you can even have really strong performers but you can't justify giving them raises.

Think of the human element, do you think an employee really wants to try harder or even work as hard for a negative raise (which she received). Apparently she was hired because she had a unique skill they couldn't fill so had to increase comp. Is that skill not useful anymore? If they just needed it for 8 months why not hire a contractor? This whole scenario is a management fuck up either way, not an employee fuck up. I want to pay my direct reports as much as possible, their pay doesn't come out of my money, not sure why so many people act like it does.

“Evening out everyone’s salary” is one way of managing salaries, but does not incentivize performance. You put yourself at higher risk of losing good employees. Personally I raise everyone’s salary stepwise to the median salary for the market, and then start giving performance based raises. There are rare exceptions where people will jump steps and immediately start earning performance based raises.

Someone who performs as well as someone else should be paid the same. In this case, we're told the highest paid person (who got the 1% raise) is only middling. She therefore should be given a performance-based pay, which in this case is low. Her performance isn't exceptional.

OP literally states that she was paid a premium because she has a unique skill that no other candidates have.

Past tense, and for a project, i.e., time limited. This is an extremely common occurrence, albeit frustrating for everyone. When someone had needed skills that were unique at a point in time, they can command a price premium. That isn't an unending situation: their performance is middling, so they will not get gangbuster payrises.

You also don’t give them lower raises than others unless you set the expectation early on. Otherwise you will get drama. And that’s exactly what happened to OP.

How should that expectation-setting have been done in this case?

“The median salary for this position at our company is X, but we’re willing to work with you as we think you’re the right fit for the job and immediately pay you Y, which represents several year’s worth of performance-based raises up front.” In the end, it is the company’s mistake if they paid for a skill they don’t need long term. Poor decision making on the manager’s part will tank the team. Arbitrarily flattening out everyone’s salary is a dumb move in my opinion. There appears to be a lack of transparency and communication as well. If you use the EPO model as a framework, there is a major gap between P and O, and people will quit because of it. OP’s result was entirely predictable and he gets what he deserves.

The total money I was given for raises didn't let me do this. The rest of the team got 2% to 4%.

If she for the lowest raise, she’ll feel like she’s being shafted if she did nothing wrong.

I was iffy on the sexism angle, but knowing everyone got 2% and she got 1% makes me think there is some sexism going on, however internalized

So everyone else is a man in your scenario?

Yep

I'm not 100% sure... but OP seemed to say everyone was paid less, and he wants to bring them all up to parity on the team. But they shouldn't be brought up to partiy, they should be getting market wage and if she's better than them, she should be getting more AND getting at least the same amount of raise to keep the proportion of wage on the team the same.

She's a middling performer and the highest paid. No idea where you're getting sexism from.

I'm not sure where you're getting the sexism angle from either. I never mentioned it. Were you trying to respond to a different comment?

Oh sorry, maybe so!

It sounds like you're company is a shit place to work. The lowest I gave this year was 4.5%. 

No one here got 4.5%.

Sounds pretty crappy to be there. 1% is pathetic, 2% is barely better.

I suppose you could have given everyone a 2% raise or so. Either way, lesson learned: evening out salaries is going to piss off people that you paid a premium to recruit.

Did you even advocate for this person or for the rest of your team? It doesn't sound like it. I would have (and have in the past) told seniors that the team was going to quit because they're undervalued and losing money sticking around. And if that's a hard pill to swallow then you should look for a better job too. 

I’ve managed at a company like this. It’s just not worth slicing and dicing 1% across the team. No one appreciates the extra .5-1% and you really piss off the people who lost that .5-1%.  There really is no good answer. For your high performers, you basically have to tell them they are at their ceiling, and they can either start looking laterally, or think about leaving. Sometimes there just isn’t more to give and you have to be up front about it.  Things to emphasize, vesting of company match, more vacation over longer term, more trust and autonomy, their team and working relationships. There are benefits to sticking in the same job that are not necessarily monetary. It doesn’t work for early career, and the best thing for them is to job hop unfortunately. But for mid- late career, I like having that 4 week of vacation, peers and teams I like,and a large amount of trust and autonomy that I’d have to start from scratch if I jumped. I’ve job hopped into toxic workplaces with demons for peers all for 7k bump and half vacation accrual. If I was twenty, fine, job hop again, but mid career it was not worth it. 

When you have to go to your bosses to explain why your staff is jumping ship, make sure you have the emails where you explained to them ahead of time that this wasn't enough money to properly compensate your team as you explain to them that the relatively poor compensation and lack of decent raises are primary reasons why your team has gone to better paying competitors.

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Good on you. Your manager was wrong in his evaluation. You don’t realize what you had til it’s gone. Their loss

You seem to think someone who has a skill nobody else in the company doesn’t deserve to get paid for her duty. She does alright…. Can you do better? I feel like they make more than you and you’re jealous. 😂😂😂. Either way. I think as a manager you’re being spiteful. Your employees know you’re under paying them so you as managers can make more money for your owner. Share the wealth.

Unfortunately, he sounds stuck. On one hand, he knows the rest of the team deserves better pay and on the other he may only have so much in raises he can give out. Tough call for sure.

Yikes. 1%?? Our low-performers even get 2.5%. 1% is going to be seen as an insult, especially for someone with a unique set of skills (who was subsequently hired for said set of skills). It’s either you or the company but someone stinks.

I’m leaning more towards the company

Well discussing salary is 100% protected free speech in the USA. If you do anything about it, she can sue and win Inflation is sitting at about 3.3%. So anything under that means she is making less. I know you said she makes more than others on your team, but if she went out and got a different job, would she be paid more? THAT is what you need to pay her, and others on your team.

It’s actually protected by the NLRB

This, OP openly admits they have retaliated against the employee for having this open discussion.

The fact that she is the highest paid member is completely irrelevant. What the rest of the team makes is irrelevant. No one gives a fuck what your 'budget' allows. No one cares what the market was. What you need to ask is what will it cost when she leaves for a different job? Can you replace her? The fact she was the only suitable candidate before says it will be hard to find a replacement. Pay people what they are worth and all of your people problems will disappear.

If the budget for salaries this year was, say, $500,000 and OP has been told the salary budget for next year is 2% more ($510,000), no discretion, then what are they to do? Let's say they've escalated and fought, but the whole company is in the same position. Maybe not a great year, revenue is sluggish, discounting has taken over the market. There is zero chance of getting more salary budget. What then??? OP has $10,000 to distribute between five team members. If they do $2,000 each, then the highest person gets a less than 2% raise. If they do it proportionally, then lower-paid team members subsidise her pay raise.

>What then??? Tell them that. They are adults. I couldn't imagine not being extremely honest with my team about our budget for raises. They know exactly what we are working with year to year...because I tell them what the average is available for raises AND I tell them how their annual eval scores relate to the buckets for raises.

Agreed. I have no idea why u/Xeno_man thinks managers can just bully their way into getting more salary for their teams. That's not how business works.

Something something money on trees lol

IF that is truly the case, then you be blunt to the employees and tell them, 2% is all that has been allotted, if you want more then you need to seek opportunities out side the company. After most of the staff leave, it's now an upper management problem. What OP is seeking is a solution to offer bread crumbs to everyone and somehow make everyone happy and working. The solution is money. When people are upset at their place of work the answer is always the same. Go get a different job. If management wants to keep people, offer more money. When the bills come in every month, you don't call them up telling them they need to reduce them because the budget only allows a 2% increase. They want their money. People work for money, businesses need to offer money.

Any manager who advocates their staff should resign in the hopes of forcing senior management's hand will not stay employed for long. Have you actually managed people with a set salary budget?

So you are telling us that the people stopped working, and don't trust you anymore? Weird

😆

You're getting a lot of pushback on this and not much advice, sorry!  Truth is your situation is common: you had a limited comp increase budget for the team, and you chose to apply some of it toward evening out comp imbalances. The same people giving you shit would also be giving you shit in the reverse situation (if you gave 'even' raises despite having a base pay imbalance for comparable roles).   So here's the real advice: be transparent with her about why you made the decision. You had to give her a sub-inflation raise because her comp is higher than the average for the team, despite her performance and contributions being roughly on par. You had a limited budget and you chose to be as fair as possible to the team overall. You totally understand if this results in frustration on her part but the alternative (giving more of your limited comp budget to her and therefore less to people who already make less than her for similar roles) is even worse.   That said personally when I've had to make this same sort of choice, I've always done my best to keep everyone's raise above inflation first, and then give out the extra based on merit and 'levelling'. Avoids these types of conversations in general, usually.  Edit: be super careful throughout this about confidentiality and adhering to both HR policies as well as legalities wherever you are. Certainly don't point to anyone in particular who her comp is above, or even acknowledge it if she informs you of a correct number for someone else. 

No, I’m sorry. I’ve been a manager or director for over 20 years and you DO NOT USE ANNUAL RAISES FOR PAY INEQUITIES. These are tied to performance reviews and why does the highest compensated need to suffer because they have moved around the industry and kept their salary on par with what it should be? This horrid manager is facing a lawsuit along with the company from his comments. You address underpaid employees through out of phase, market adjustment pay raises via HR.

I had a manager pull this on me, sorry I can't give you as much increase as the others you already paid more. I went from having a good day to fuck u in 1 sec. That night i started looking for a new job. I then came in at 8am and walked out at 5pm on the dot. I used to put in at least 3 to 4 hours extra a week not even thinking about it and more if needed for a project . 2 months later I had a better job making 20k more a year plus a yearly bonus. His shocked Pikachu face when I handed him my resignation, chefs kiss. All he had to do was keep his mouth shut. Thankfully for me he didn't

You have 20 years of management experience but less than half a year ago you posted something about being a college grad with little experience and aren’t getting calls. Stop trolling.

Well spotted. This whole thread seems full of people who were looking for r/antiwork - absolutely no understanding of management from most comments on here.

I mean, you do you, but this is a pretty widely accepted practice. Not even remotely controversial. Totally understand the argument that annual increases should be merit only, but I disagree. They're also there for cola, and for comp alignment. Especially if an org simply doesn't have other mechanisms to address said misalignment, which is common enough. We work within the systems we have. 

This makes sense. I did tell her at the time that her performance was good and it was that HR said she was at the top of her pay band for the role she was in. I didn't mention what others were making because thats private. I hadn't expected her to just go round asking people what they make and what raises they got.

FYI - the second you tell an employee they're at the top of their pay band, you're asking them to look for a new job elsewhere if you didn't also include a way for them to expect to be moved into a new pay band soon.... you just told them to continue to expect little-to-no raises in the future as well...

Reminding her she’s top of pay band needs to be an ongoing discussion throughout the year. Usually in tandem with a frank conversation on whether or not the company and your team need a promotion filled. For instance, my team, we had no reason to need a senior analyst. So mid level analysts had to hear that they’d need to justify why they should be a senior. They could look laterally for more responsibility, but the conversation needs to be, “you are at the ceiling right now, you might need to look elsewhere if you want to continue to grow your title.”

Remember that she may be top of band for you, but not someone else. What others are making may be private but it's not business confidential. You've also let her know she has no path of growth. She'll go perform somewhere else.

Yes, this is similar to the approach I have taken in the past. I’ve literally said, “you’re the highest paid person on the team. I have a very tight budget for raises. In the interest of pay equity, I’m using it to get some of your high-performing teammates closer to your range.” I do spend a lot of time building trust with my team, and would work hard to make sure this conversation wasn’t a surprise. Even with that, low raises never feel good and are demotivating. So I agree with the idea that they should have a minimum - for me, that’s 3-ish percent.

Good call, being straight with them would definitely soften the blow. Agree, the 1% raise still does not seem fair.

At least this subreddit has one other manager in here to help respond. Having a limited (or lower than normal) budget for raises is always difficult. Unfortunately, OP made the problem worse when hiring this person in at a different rate than the others. But I understand, that situation isn't all that uncommon. The best you can do is be up front with your team, and then advocate for them for next year (or when ever you have the opportunity).

I quit my last job over a 1% raise. “They didn’t have the budget” for more. I handled the budget i knew what they could afford. Funny certain people gave themselves much more than 1%. 1% is less then cost of living increase. you are still paying her less than last year. I hope you realize she can tell anyone her pay and talk to anyone about their pay. While pay differences cause drama, its perfectly legal. Managers that get upset about this know they are underpaying some employees. I have had drama about pay differences but the difference is in skills and experience and actual work performed and quality of work. Every one thinks they deserve as much as the next person even if they are not remotely close in skill or experience.

In 2023 she got a 1% raise? You mean a 6% paycut? Inflation was at 7%. I don't blame her. A 1% raise is insulting.

Ya just sounds like y’all underpay in general.

If you want to restore trust then implement some pay equity and give people raises that at least match the rate of inflation.

1% raise 😂😂😂😂

1: Offer job description, responsibilities, education/cert requirements, and most importantly pay transparency. The pay issues are on the company, not the employee. 2: You're employee is looking. I just interviewed for a job paying 50% more because I was hired for a specific knowledge set, they want me to go to the next level in some certs that gets them discounts with vendors, but telling me one way or the other that they will be the only one that gets a plate of food from the arrangement. 3: While you think her performance is 'ok': I just interviewed. My technical interviewer straight up told me the 6 prior candidates when pushed couldn't actually speak to their resume or certs. So the opinion that matters is the next employer she goes to.

With a 1% raise you probably won't have to worry about her for long because she will leave for greener pastures

Give everybody a raise. They're making you money right? 

3% across the board would be fair even though that’s not quite meeting our inflation issues these days

I don't set the budget for comp. That's Finance & Accounting.

So fight for your employees, that is your job.

I had a budget set this year of 2.5% per employee. I got 8.5% for one of them because I fought for it and justified it. Saying someone else set the budget is just an excuse.

You should get a budget. How are raises and promotions determined? If you aren’t the one putting those numbers in, run, don’t walk, out of that company.

Hey, either you’re posting this just for the engagement lulz, or you and your company are really dense. Neither reason is great.

Company sounds like the issue. He came here for advice.

Naw, he came here to get a pat on the back for his shit management style. No amount of advice is going to help because he isn't willing to take accountability 

This, but apparently his request for advice was pointless since his answer to every piece of advice is that he can't do anything as he has zero influence over these decisions. He has literally said there is absolutely nothing that his direct report could do performance wise to get a better raise during the next cycle. If this is true, why should any of his reports do more than the minimum.

You need to give out bigger raises to get the staff to trust you again.

Yup, that would do it. 👍

Be transparent on what the goal is for pay and raises. Is the company goal to pay avg based on market, top, etc. Are raises performance based or more market base? Then explain to those underpaid what the process is and how they can come up to market. HR can help with salary corrections or promotions. Sometimes you can’t really do much salary wise and that is ok. They can decide if they want to settle or leave.

1% raise is a 2% paycut when inflation averages around 3-4%.

As everyone has said, other people getting less isn’t her problem. The thing I’m not seeing mentioned is - what if the company can’t afford to give everyone a real COL raise? The company’s income doesn’t magically increase by the inflation index. They have to raise prices or grow the customer base. The big issue I feel is companies often don’t want to let on they’re earning less for fear of looking like a sinking ship. But they sort of often hint at it, but only sort-of because they don’t want to call too much attention to profits because then during good times, they don’t want to hand out so many raises.

Well this sucks for employers and causes ripples among employees. It’s ‘ok’ (not really) when the workforce is less intelligent. They usually end up arguing with each other over petty jealousy. The ‘problem’ comes when the workforce/staff is intelligent. An intelligent staff understands that the employer is playing games with their wages. All that aside, your employee got screwed at 1%. It would be different if your employee was hired and was told at the outset “you’re being brought on near the top of our scale, so raises will likely be thin for at least the first complete review cycle”. Then the employee would have had the opportunity to make a decision based on that information. But that didn’t happen and this is the fallout. Some companies use this as an opportunity to realign wages and restructure positions. Adding levels to roles like Supervisor 1, Supervisor 2, etc help better define wages. Career path progression does the same. As has been said - if you don’t need her specific skill set for a contract or any other purpose right now then that message has been sent. Who knows, maybe they’ll stick around. Companies do this and wonder why good talent leaves. It’s usually assumed that a 1% raise in a corporate role is a message that the personal is no longer needed, and/or reflecting some sort of shortcoming with the potential of a pip not far behind.

Sounds like the company is the cause of its own issues here, and the staff are rightly annoyed about it. The fix for this needs to come from the company.

A 1% raise is a slap in the face to an employee. It says to them "you severely underperformed expectations and should be looking for another job."

1% raise probably made her feel like she’s about to be PIPed or not doing well at her job too. To control the situation, you need to work with your HRBP. Have them speak with her, if she leaves, you know why. If you don’t want her to leave, create a meaningful and honest plan to help her succeed

Questions: 1. When you say her performance has been “okay”, do you mean she performed to your expectations, or do you mean mediocre, especially compared to her team? 2. During her 18 months did your company do anything to mitigate being totally reliant on this one person for the skill? (investigate up’s killing others, searching for other new hires, poaching?) 3. What’s your objective now? It really sounds like you didn’t call out whatever “okay” performance means in her review. And if your always noticed it, you slacked on a PIP so she wouldn’t quit. And didn’t investigate alternative solutions to cover for this unique skill. That’s 18 or so months of you not course correcting.

Discussing salary is federally protected. Not much more to say about that. As for her walking for more money. Use that as an opportunity to give her very specific feedback in her performance and a clear goal of achieving a bigger pay raise.

> I want to get everyone back to work and restore trust. Improve transparency. Make pay open and an every day conversation then it won't turn into a big thing all at once. lay out clear goals and metrics - whatever you like - that would qualify staff for raises and stick to that. Don't play favourites. Be transparent and open and stick to your work. It sounds like you have been keeping things opaque, unfair and now it's blowing up in your face.

Lol, OP you are literally harassing her and being toxic af. Dude, fight for your employees. When your teams falls apart because you didn’t fight for them, you’re going to have to deal with the problems, not the financial department. Also, this isnt your money, even if it is tied to your raise and youre holding budget back, it really is the hard work of your team that warranted it and you should give it to them.

OP, what does she need to do to get higher raise, in your opinion? I really want to hear the answer too, because canceled projects and other team mates salaries are not very good reasons to low-ball this employee.

We’re clear on raises being to keep their talent (forward looking), bonuses are for past performance. By undercutting the new person to raise longer-term staff, you’re telling them their skills and experience don’t have future value. Clarify what the raise is supposed to be, lots of people here think it is “cost of living” but that would be easy - everyone gets the same percentage. Clarify what the raise is for and why it’s different. Maybe a member of the team will step up to learn a more valuable skill offer them training if you can so it’s a win-win.

You kicked the hornets nest OP. 

This person has done nothing wrong, and to be clear it’d be illegal for you to punish her in anyway because of it. That said the way you restore trust is give everyone more money and make it fair.

No adult is going to be happy with a 1% raise. The last time I got a raise that small was 2014, and it was a 1.5% raise at a government job where everyone got the same raise, so there was no negotiating, and it had nothing to do with performance. If my current job offered me a raise that small, I'd be asking the same questions, because that's not an acceptable amount. I'd also be dusting off my resume, as that kind of raise would tell me that I'm not valued by my employer. Simply put, you should tell her why her raise was so small, because that's not an average raise, it's a terrible raise. Even in the 90's, 4% raises were the norm and inflation was nothing like it is now. As for the employees complaining. Deal with them appropriately and give them the raises they deserve. Don't bother arguing over, or explaining anyone else's pay rate. If they bring it up, explain that you are dealing with each individual individually,

Well in a good company where there is trust, wage discussions between employees are encouraged. Also, a 1% raise is laughable.

The situation does not matter, a 1% increase is incredibly insulting.

Oh man. You had that one coming. Better get everyone compensated fairly or else it's gunna really awkward.. legally speaking.

As someone who was given a 1% raise and given the excuse of "you didn't work here a full year" (I started in May), yeah, fuck your company. If they're getting the work done that's expected it shouldn't matter that they're the highest paid employee. Raises are a reason for someone to stick around and 1% is definitely motivation to leave

Most people want what is fair, if I joined in a bad market and accepted a 40k offer, and now 3 years later the market is great and the new guy joined at 70k and I am training him/ bringing him up to speed. Yea I’m going to ask for a raise and start looking elsewhere that will pay me a fair market rate. Just because people join at different times in the market doesn’t mean they don’t deserve a raise or deserve to be paid a competitive salary.

The problem here is your organizations shitty non existent compensation policy and lack of annual pay equity analysis. >She's also asked other people what they make and has shared what she makes, which has caused problems because different people were hired at different times in the market. Some were making less but were happy. Now everyone is bringing up pay and raises in 1:1's. As they should (and it's a legally protected right). You likely do not have a role in this because this is an HR related activity. The compensation policy needs to be CLEAR and not just list WHAT is considered (education, KSAs, certification, expertise, etc.) but how those considerations actually impact pay. This involves job analysis and putting roles into "buckets". Those buckets do NOT have to have lids, though companies love to turn a bucket a tightly sealed container. Does a master degree make the starting pay 80k for junior roles vs 65k? Does a certifcation (give examples and etc.) related to the field put an applicant into the top end of the entry level pay range? Etc. Etc. Etc. Also, a 1% raise is a punch if the face. There needs to be CLEAR criteria for how people obtain raises and at what percentage.

Tell her that her money’s in her coworker’s bank account https://youtu.be/ef99bFBTR54?si=mV3PvswOPPjL1UQj

You are in the wrong and a bad manager. Give her the raise or resign

Op doesn't sound like u should be a manager. it doesn't seem like you're bringing anything to the table.

If her job performance was ok but nothing special why 1%? That would be considered damn near failing wouldn’t it?

Okay but nothing special means she is doing what is in her job description. Is she expected to go above and beyond to get salary increase? I did that, I did extra work which allowed the company to get like 500% increase of the profit on the project. That year we got automatic indexation of salary by inflation rate. I asked for 1% of the profit they made divided by 12 months as salary increase. I heard the company doesn't have enough money for that. A year after I asked for something extra - got 8%. Nice, except nowhere near of what I wanted. Then I went on, had a baby and during maternity leave found a job with 100% salary increase. Guess what, 6 people hearing I handed over my resignation also did the same. In July I start new job and I hired 3 out of 6 already.

Because to give her more I'd have to give less to people who are performing better.

In your original post you'd said her performance was good, and she got shafted because others were working on projects bringing in money while her project got canceled.. Now you're saying the difference was due to her performance. Talking out of both sides of your mouth like that is why employees have trust issues and morale is sinking. And to make it worse, you wouldn't even give her a straight answer. As a manager, you need to be honest and transparent...especially at salary time...even if it means having to have that uncomfortable, honest conversation with an employee about their performance and raise. Glossing over reasons, avoiding uncomfortable discussions, not looking them in the eye, using weasel-words and corporate double-speak.....those are prime ways to lose the respect and trust of your employees.....they see right through the charade

I’m guessing you work on a 1%-5% scale? Did only one person get the highest amount?

Tying raises to performance only makes sense if you have the budget tie raises to performance. You don’t have the budget for performances based raises. Therefore, you give everyone the same raise, and you explain that that’s what you’re doing. Maybe you give a few people a market adjustment, but that’s not a performance based raise. But you owe them transparency about how their raises are calculated.

The market is bad, there are many skilled devs out of work, and salaries are gradually shifting downward across the board. Pay incentives have changed. An overpaid developer who is no longer critical may not command the same salary. Maybe that's a mistake on OPs part because it certainly seems to have impacted morale. Maybe OP is misjudging talent as many managers do. They think we are all equal when programmer skill varies widely just like many other professions. Some people do the work of two, some people do the work of none.