Why Do Companies Rethink Annual Pay Raise?

Companies Rethink Annual Pay Raises The subtitle of the article, Companies Rethink Annual Pay Raises, gives a prime example why employers are now questioning annual across the board pay raises. “Some experts contend that giving larger and more frequent bonuses might spur better performance” (Silverman, 2016). All employers want top notch employees and want those employees to perform at their best. No employer wants to think that they have hired someone who may be inadequate to help the company move forward. No employer wants burnt-out employees who have no drive, but in order for employees to feel vested and appreciated within their companies, employers must do something to motivate them.
Money is a phenomenal motivator for most people. …show more content…
She goes on to say that some managers and pay experts say that annual pay raises are “often so small that they do little to motivate or differentiate employees” (Silverman, 2016). “Laura Sejen, of Willis Towers Watson, urges employers to eliminate merit raises as we’ve known them and focus on meaningful bonuses for high performers” (Silverman, 2016). From someone who has worked in state government for the past 10 years and a husband who has worked 20 years, I can say that we don’t work in public service for the annual pay raises or the bonuses. If I had to really assess why I do what I do, and why I choose to work for the public instead of the private sector, it’s probably for the retirement and the benefits. Annual pay raises for the past seven years have been virtually non-existent. We’ve gotten some bonus time off, and a couple one-time $500-$700 allotments, but nothing of significance to really drive our annual base wage in the positive direction. In fact, a few years back, we actually lost money every month because they increased our insurance premiums. “Kris Duggan, the chief executive of BetterWorks describes the “annual raise as like smearing peanut butter one millimeter deep for everybody. It’s better to smear the peanut butter where you see really strong contributions …show more content…
In fact, they are mediocre at best. Often, we joke about wanting to vote them off the island. I’d rather work with someone who isn’t quite the best in their field, but wants to work and tries every day and doesn’t just show up to collect a paycheck. Second-rate employees who are there just taking up space do nothing to motivate me and the fact that they receive the same annual pay raise or bonus that I do can be very disheartening and discouraging. My favorite quote from the whole article says “some top-performing employees have earned pay increases of 10% or more and with low performers, you are obviously going to experience some healthy turnover” (Silverman, 2016). Fantastic; sign me up! I could go for a 10% pay raise and would willing participate in a “healthy” dose of voting a few off the island. Bye-bye, bye-bye