Posted: by HRNasty in Climbing Career Ladder, Company Culture, Manage your Manager, What HR Really Thinks

Cost of living

Don’t be a can of SPAM

Cost of Living Raise question from a reader

HRNasty,

I have been working at a company for the past 4 years and the first 2 years I was here, everyone in the company got a “Cost of Living” raise.  These past 2 years, we didn’t, and I think that the company is just trying to cheat us.   My last cost of living raise was only 2.5% and that was two years ago.  I haven’t had a raise in 2 years.  The company is saying that the economy hasn’t seen enough inflation to justify a cost of living raise.  Gas is more, food is more.  How can they say there is no inflation?

Thanks,

Deserves A Real Increase Now

Darin,

Yes, at first glance, this sounds like a pretty shitty situation. That being said, let’s put this into perspective.

If you are collecting Social Security, there was no COLA (Cost of Living Adjustment) in 2010 and 2011 because the CPI (Consumer Price Index), as determined by the Bureau of Labor Statistics in the Department of Labor, for those years did not increase above the level of the third quarter of 2008, the last year COLA was determined. Before 2010 the COLA increase every year since 1975.

I realize you are not collecting Social Security, you are working.  Point taken. I provide it as a reference point. Here is how I really feel.

I personally don’t believe in “cost of living” raises. I think they just promote apathy, indifference, and a passive work ethic. Just because the cost of living increases doesn’t mean that the company owes you a raise. The reason a company should give you a raise is because you are WORTH more to the company. If you know you are going to get a COLA for just putting in the minimum effort, why put in anything more than the minimum year after year?  You can do nothing and get a COLA and the guy next you to you puts in 60 hours a week and only gets 4 or 5%. I get that gas, food and clothes cost more money, but if you are not doing more for the company than when you were first hired or given your last raise, why should you be paid more?  For those of you saying “I have been with this company for 5 years”.  Just stop right there. Time with the company doesn’t mean that you are worth more.   You have had plenty of time to PROVE your worth more but you still need re prove it every quarter. Time may equal money, but not with your career. It may mean that you have more institutional knowledge, but it doesn’t mean you are doing anything with it.  You gotta DO something with that knowledge. Make a Move Son!

EG:  You are one of 10 people starting at a company doing job “x” and we are paying everyone 50,000 each. If we give a 3% cost of living raise every year for 5 years, at the end of those 5 years, everyone will be making $58,000.  (I get that this is a large cost of living number, but this is just a math exercise) At the end of 10 years, everyone is making $67K. If you are not adding more value, are not more efficient, or are not more productive than you were on Day 1, then how are you worth more? I might as well just get someone with the same amount of experience we hired you with 5 years ago, and save the $17,000 a year. Multiply that number times 10 employees and we are wasting 170K a year.

I didn’t hear you were doing more for the company or providing more value. I heard you complain about “you”. Tell me what you did for the bottom line of your department.

If you still don’t agree:

If you have two cans of SPAM at the grocery store and one is mis-marked an additional 10%, which one are you going to buy? You are not going to buy the more expensive SPAM. You are going to go to the Store Manager and ask some questions. Same can, two different prices. Of course you are going to pick the one that is 10% less.

If there are two cans of SPAM, both the same price and one is 10% larger than the other you are going to probably buy the larger can. If you want to be paid more, provide more value to your buyer.  Be the larger can of SPAM.  Provide more SPAM.

Yes, I just called you a can of SPAM.

So, this probably isn’t what you want to hear. But I started this blog to tell you what I really think, and personally, I just can NOT wrap my head around a Cost of Living Raise. I can wrap my head around a raise for providing more value. If you are producing 10% more revenue, spitting out 15% more widgets, shaving time off of a work flow. . .these things are adding to the bottom line. My advice to anyone that works is to NOT rely on the COLA because you can work yourself right out of a job and you will have a very difficult time finding a similar job with the same pay.

See you at the after party,

HRNasty

nasty:  an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone that is good at something.  “He has a nasty forkball”.

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  • I get your point, and it really makes sense.  

    However, in my case, our company makes this exact case, and does it quite convincingly.  They sell that raises can be asked for at any time, and a mini-review might be done to add to your salary if you are WORTH it.

    However, in our group, about 120 people, for the last year, NOT A SINGLE RAISE was granted.  I would argue that if your human capital, at that scale, is not improving, and demonstrating more value, you are really not measuring their abilities, and matching compensation to it.

    I know for a fact that our company budgets 2.5% per year for raises, and that they are given, but where they go is a mystery.
    Talk about a morale destroyer.

    • Dude,
      Thanks for stopping by.  I checked out your blog thepmdude.com and like what you are doing.  Here is a thought.  It is very different to go to a manager and ask for a raise for work that was done in the past.  Working Girls ask for the money up front, not after.  There is a reason.  Here is a suggestion that sometimes puts managers in a very different frame of mind.  Propose what you are going to look like and what you are going to accomplish over the next 6 or 12 months that will make you worth an additional 2.5%.  Even if they don’t agree to the raise, just get them to agree that someone who “does these things” is WORTH x + 2.5%.  Negotiate the tasks needed.  This way you at least KNOW what 2.5% looks like.  Meet monthly and give them progress up dates.  As the list of accomplishments is checked off, they will feel pressure to get you more money.  You aren’t asking for a raise with hat in hand.  There will be an elephant in the room, but it will be your managers, not yours.     Hope this helps,  HRNasty