Yearly job performance review vs pay raise

[kdonnel]

So much time is wasted doing performance reviews at my company. The process starts in November and does not finish until April. No one is allowed to excel on the review and because they want to normalize everyone, a poor performer who is currently lower on the pay scale will receive a larger percentage raise then a high performer who is higher on the pay scale.

I think they would save a lot of money if they just let us draw our PA score out of a hat and then we drew our raise out of a different hat.

The whole process could be done in a matter of minutes.

 

[soccerdad72]

We pretty much all get 2% pay increases each year, but in the last few years, they've added a performance-based bonus to the yearly process. That being said, the vast majority of staff get a pretty minimal amount and the ratings all seem to end up around the same score, so I don't know how much difference it makes.

As a manager, I try to have my staff develop realistic goals and expectations - but in the end, unfortunately, it doesn't really matter. And the folks I have reporting to me really hate it, because their salary is based on the contract negotiated, not anything performance based.

 

[Skippy918]

In my old company, raises were based on the company performance and your rating was used as a factor in getting a raise. There were a few years where there were no raises because of the recession and they kept using it as an excuse even though the recession was over. When we did get raises it was 1-2%.
Current company bases raises on performance rating. My past 2 raises have been at least 3% which for me is awesome! Bonuses are impacted by company performance plus your rating.

 

[low-key]

The Man wants more money

 

[manning]

we have the yearly Performance Review.
It's pointless ( I suppose it's THEIR PAPER TRAIL)
The raise never reflects the PR

These reviews are useless. Were I worked we had something called 'result management' you and you're manager agree on goals and you are reviewed quarterly.

The boss never caught on. I would pick my GOALS after I accomplished them.

 

[DebbieB]

At my company, there are annual bonuses and pay raise opportunities. If your performance review is not "above the job requirements", you are not eligible for a bonus. Of course most people are "meets the job requirements", so no bonus. Then the pay raise is discretionary by management, sometimes get one, sometimes don't. This year most got the Trump tax cut bonus (separate from the regular bonus) but then when the annual pay raise review came shortly after, nothing there.

 

[LYSE]

I guess it depends on the industry...I would have thought that annual raises in the 1-3 percent range + possible COL increases were standard (depending on performance) as that's been the case for me everywhere. But I'm in the technology field where employee retention is quite important.

A good review at my company now gets you 3 percent + a set amount of equity, but I had a very good review this year and was given 4 percent + 50 percent more equity than is normal for a "good" review.

 

[FlightlessDuck]

Hi
I've got a lot of years in the work force. Four years ago I started at A greAt company. Yet every year I get the weirdest discussions around the performance reviews . Here it is in a nutshell. The performance review is merely a chance for mutual feedback and it has no bearing on the possible raise. Yet the performance reviews has to be completed before the raise discussion. I welcome your thoughts and arguments on either side. I'm having a hard time grasping this concept . Thanks for listening...

My company says the same thing. Although our bonus is based on the performance review.

 

[Mrs. Ciz]

These reviews are useless. Were I worked we had something called 'result management' you and you're manager agree on goals and you are reviewed quarterly.

The boss never caught on. I would pick my GOALS after I accomplished them.

I kind of do that too. I'm a teacher. I have to set three goals. For two of them, either I pick something that I already planned to do over the summer, or I pick something I have to do for my job anyway. The third, I try to make a real improvement goal.

We also have to do our own reviews. Since we moved to an online document, I finally got smart and saved my old reviews to a word doc. Now I just cut and paste from the old one to the new one each year and tweak a couple of the ratings/comments/evidence.

Each year we get a small COL raise. I think last year it was 2%. We don't get any merit/performance raises or bonuses. Unfortunately for the teachers who use the district health care plan, the 2% didn't even cover the increased cost of the health care premium this past year. So they ended up with less take home pay this year than they did last year.

 

[OhMari]

Pretty standard in industry these days.

I was just listening to a financial analyst the other day on the radio. He had an interesting perspective (not saying he is correct, just interesting) that regular pay raises are a thing of the past. Market will now determine pay and raises. If a company needs to keep their most valuable talent due to a tightening market for their skills, they will raise their pay. But to just give yearly raises for good performance to all employees is a thing of the past.

Then utilities, cable and food prices should stop increasing and be the thing of the past. Why should we pay more for a product since it should cost the same to produce the product.

 

[mamacatnv]

My employer wanted to get rid of the review format that was all written feedback because everyone was using the same verbiage year to year and there was no creativity in the reviews (they were useless). Cut and paste was alive and well when it came time to write a review.

So I implemented a rating numerical rating review system. We discussed the pitfalls and issues of such a system at length but they all were convinced they were better than the statistics and they would exceed expectations.
The new system is a 1-5 scale and lo and behold, just as I predicted the new format tells us nothing. I sat down with all the managers, we went over the criteria for each number and we still have issues as everyone is suddenly very average. A score of 3 reigns the process with an occasional 4 thrown in for a pat on the back (usually in attendance).

Every single employee given this review over the past year since it was implemented is scoring between a 3.4 - 3.6. Every.Single.One. Even the known non-producers who are just average. Ugh

Example, an employee was given a list of goals last year, that employee accomplished all and then some with substantial impact to the company fiscally, yet was given a "3" for completing those goals as it was "expected" therefore not given a 4 or 5 for exceeded expectation or proving excellence. This employee was very upset at the average review score. This review was one of the first under that particular manager and the manager kept saying to the employee "as expected" as if that somehow justified a field of 3's which IMO are "average".

Now, based on this, one would expect that merit increases would all be same but they are not, they have ranged as high as 10% while the "budget" was 3%.
Its making this HR dept a bit crazy as there is no consistency. I am really pushing to get rid of the whole annual review process and work towards regular communication between employees and management with raises based on budget and market demands.

 

[Shelley Chiarats]

I worked at one place with the 1-5 rating system and got mostly 3s like mamacatnv said. But I was pretty upset by it because I looked at it as getting all C's. When I was in school, I was not satisfied with C's and I was not then either. Especially something like Attendance where I had a 3 even though I had perfect attendance, never late, never missing. I asked them if Perfect gets a 3 then a 5 is not possible now is it?

 

[runwad]

I am really pushing to get rid of the whole annual review process and work towards regular communication between employees and management with raises based on budget and market demands.

My place of employment just moved to this, yay! They must've read this thread

 

[aprilgail]

never worked at anyplace that had a yearly review- we got contractual raises- you get the same as the next guy so doesn't matter if you are excellent or not you get what the other people get.

 

[clutter]

.

 

[pryncess527]

Um... So what incentive is there to be great if you get the same raise as average ?

While I agree it may not be ideal, as someone who works for the State, I've gotten exactly 3 raises in 13 years, none of which covered cost of living increases. State employee raises are almost never based on the quality of our performance review, or handed out individually, since they are voted on by the Legislature.

I manage to be great because I love what I do and take personal pride in doing it well. It would be nice if I got a monetary incentive to be great, but a lot of us exist in jobs where that's not even on the table.

 

[Ben E N]

I manage to be great because I love what I do and take personal pride in doing it well.

This is so key to staying happy at work. As a teacher on summer break, I am excited for the start of the next school year. Not because I am getting a raise or because of some review by an administrator, but because some of my students told me how much they enjoyed being in my class on the last day of school.

 

[cabanafrau]

I know of a few people who work in corporations who are using the model where managers are given a ranking system they must follow and apply when reviewing their reports -- 1/3 of team is outstanding/exceeds performance goals; 1/3 of team is satisfactory/meets performance goals; 1/3 of team needs improvement/hasn't met performance goals. Apparently it's not uncommon in these systems for managers to randomly rotate segments of the team through each ranking during the review periods so that all employees work out to essentially the same average annual ranking or score overall. Often upcoming plans for headcount reduction is signaled if you do not receive the highest rating at all during a year, despite there being no correlation in actual job performance.

 

[GreatLakes]

Below C and director level our reviews are all tied into our payroll system. The reviews have to be in and completed before a certain date or the payroll freezes. It is a way to ensure they get done on time. I suspect if they weren't they would override the freeze since we aren't going to actually stop paying someone because their manager didn't get their payroll done but it is a way to scare the employees into doing their portion of the process (self evaluation and setting goals for the following review period).

Below C and director level all our raises are predetermined with a base rate and then adjusted based on review. Let's say that the rate will be 5%. Everyone starts at that 5% increase and is then adjusted depending on how their review falls around the mean. The lower reviews will see a raise lower than 5% while the higher reviews will see one higher than 5%. Anyone put on an improvement plan has their raise frozen until they successfully complete the plan and is not eligible for a retroactive raise at all, they get their increase starting in the pay period they complete their plan.

Once you are at director or above you are judged by performance against your strategic plan. It is a more complicated review as it should be at that level.

I will never understand the planned raises or contract adjustments based on anything other than performance. Do better get more money. I despise the notion that you are paid more simply because you managed to not get fired for a longer period of time. I have direct reports that make substantially more than their peers that have been here decades longer because they are worth more to me.

 

[Forevermarypoppins]

I worked at one place with the 1-5 rating system and got mostly 3s like mamacatnv said. But I was pretty upset by it because I looked at it as getting all C's. When I was in school, I was not satisfied with C's and I was not then either. Especially something like Attendance where I had a 3 even though I had perfect attendance, never late, never missing. I asked them if Perfect gets a 3 then a 5 is not possible now is it?

Did your score get changed to a 5 for attendance? if not, did you bring this HR's attention? Unbelievable yet not surprising. I had a manager tell me once that they were told to NEVER score anyone the highest score EVER!!
I think I've been a nonbeliever in them ever since.