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Annual merit raises, etc10/31
How are you guys handling pay raises and such? Currently our system is in need of something less ambiguous, and we've implemented in the past 6 months systems of tracking performance in more concrete ways than previously. I'm able to walk into an annual team member review with more data on how well they've done than previously.
I know there are a LOT of variables that could factor into this.....but overall, do you guys give a certain percentage raise?
If someone is excelling and being assertive, 4%? 5% raise?
If someone is "acceptable" but not exactly stellar, 2% to keep up with cost of living?
Just for context, we are about 20 people in size, locally owned. Custom cabinet manufacturing/installation.
That sounds about right. If their performance isn't that great there is no reason you're obliged to give an increase
Cost of living just to stay on par. But fixed percentages every year? Watch it - 5% every year for 10 years will give over a 50% increase.
David, you bring up some good points to consider.
We try to stay above par for pay wages, so far that's helped us keep more reliable people on staff, it's rare that I need to cut anyone loose during their 90-day eval for being unreliable or unteachable.
We're trying to avoid the expectation of a certain amount of raise every year, for precisely the reasons you've stated.
Stocks and or performance bonuses. Stocks can only be sold back to the company! Stocks create a vested interest in the well being of the company. Other workers(stock holders) won't tolerate inefficiency from their co-workers.