Tuesday, February 9, 2010

You Make Your Money On The Hire, Not The Raise

Booyeah!  You’ve made it a year now.  A year since you said goodbye to college.  A year since you showed Lake Shasta how a real houseboat party goes down.  A year since you got your last “Party Pics” with your Lil’ Sis (complete with some creepy Asher Roth photo-bomber giving “The Shocker”) at the spring formal.

And yet here we now are.  Me writing, you reading.  Me giving advice, you ignoring it.

A paltry six (6) weeks until the spring equinox, the traditional time of year for hard-boiled eggs, pagan bunnies and the annual reviews at many workplaces.  Generally, the annual review can be a meaningful reflection on all that you have accomplished or added to the organization over the past 365 days of employment.  In some cases it can be the most emotionally painful thing you have ever had to endure.

Unfortunately, given the economic circumstances, most organizations will probably not be making major salary adjustments – especially for low-seniority employees who are still demonstrating that they should belong on the asset side of the T-account and not the liability column.

Either way, don’t sweat the inevitable performance review.  Work hard, your loyalty should pay off eventually.  Even if that loyalty doesn’t pay off this year, you are racking up professional experience on your resume like Madonna collects men (and then eats them in a midnight Kabbalah ceremony).

[Our Dean's mandatory note:  Kaballah doesn't actually include cannibalism as part of the ritual]

In most organizations your manager will sit down with a Word template and proceed to fill in the appropriate areas as they see fit – in many cases without supporting documentation, often based on how they feel you are doing at that very moment, rather than the last year.

There will be a section for your strengths, weaknesses, opportunities or goals for the next year and areas to improve.  Just a head’s up here: if under the weaknesses section it says, “Works well under constant supervision and when cornered like a beaten dog,” you might start to get your resume polished and your portfolio nice and tidy, because you won’t be working there much longer.

Generally there are two ways the review will go.  In the first, you will be totally relaxed because you have the mental certitude that you crushed every goal established for you.  You’ve arrived to work 15-minutes early every day and stayed 30-minutes late every night.  The only sick-day you took was when you ran a 103-degree temperature, puked in your recycle bin and passed out, face-on-keyboard and your supervisor personally drove you home (with the semicolon-key sweat-glued to your forehead the entire ride home).  Tossing caution and common sense to the wind, you continued to work from home and closed the deal for a huge new account that will put the company over its mark for annual revenue targeting.

The second way this will go is more akin to a root canal.  If your supervisor says that they like to give feedback by the “couch” method you should be prepared for this format: Something nice about a very recent project you did, something really unpleasant about your underwhelming performance over the past year and then a really lame form of praise about you, your attire or your personality (on the hopes of making the bitter middle pill easier to swallow).

Try not to cry during the review.  Crying, sobbing and sniffling are uncomfortable for your coworkers and make it difficult for your supervisor to continue criticizing you.  Make their job easier, sack up and take the feedback.

After the review is over, you have two options: Use the feedback and become the employee your supervisor wants you to be (notice we didn’t say, “a better employee”) or start looking for a new employment opportunity where you can start over again with a clean slate.

Some organizations even give you the opportunity to criticize critique offer feedback to your supervisor vis-à-vis the 360-degree review process.  Unfortunately most fields in allied communication do not participate in this format, so you’ll just have to suck up all the so-called constructive criticism in your head.

We recommend that you give your 360-degree feedback about your supervisor to a few good friends, over a couple of beers and then never bring it up again – mostly because that type of language is only appropriate when playing Donkey Kong and guzzling cold, cheap lager at 10:45P on a Thursday.

If you fall into the first group, you should be ready to hear about all of the new privileges, responsibilities and huge raise you are going to get.

Will you have new privileges?  Probably not.   You won’t get an expense account.  You won’t get to come in late.  And you probably won’t get a company car.  You might get a decent parking spot.

Will you have new responsibilities?  Hell yes.  You’ve set the bar pretty high for yourself over the last year and now your employer will expect you to meet or exceed this bar from this point forward.

That bar will now become the baseline from which they will measure all future performance.  You may have new accounts or just be expected to lead the ones you have been on, but let there be no mistake, there will be more responsibilities and expectations.

And now for the fresh cheddar you will be getting <*rubbing hands together like Scrooge McDuck and a gleeful fashion*>…

Realistically speaking, if you kicked total butt over the last year you can expect a raise.  And that raise will be in the 5% range.

Aw haw haw haw! …wait, what?

Yep, 5% is a realistic raise.  In fact some organizations only give out 3% which is about the same as Social Security gives as a cost-of-living-adjustment (COLA).  On top of which, that raise will be distributed across your total pay-periods and, of course, will be taxed by The Man.

Here is how it will break down…

Let’s say, as an entry-level employee, you earn: $28,500

The 5% salary increase (~$1,500) will now put you at: roughly $30,000, or about $125 more per month (pre-tax).  After taxes, that raise will give you about $80 more per month, or close to $20 more per week.  Awesome!

Try not to blow it all at once by seeing Avatar and going for a late night Taco Bell run with your significant other.

Even if you got a $5,000 raise (+ 17.5%), after taxes ($3,000) that is approximately $250 per month. Sure, a nice bit of Parmigiano-Reggiano to add to the old bank account, but will probably not alter much in terms of your lifestyle.

So what should you do?  When you hear about the “raise” you will be getting.  Smile and say thank you.  Tell them you appreciate all the opportunities you have had with the organization and their unwavering dedication to helping you grow.  And then make your ask.

For some of our less astute readers, you are going to ask for a titular <*snicker*> promotion.

If you are an account coordinator (generally the lowest titular rank), see if your supervisor is open to changing your title to assistant account executive.  If you are an editorial assistant, see if you can get that title altered to senior editorial assistant.  If you are an administrative assistant, see if you can get that upgraded to executive assistant.  Whatever it is, try and get a better (or better sounding) title.

You see, this is why a titular change is more valuable than cash-in-hand.

You make your money on the hire, not the raise.

The next position you get hired for is where you will make a substantial salary increase.  That is, if you can demonstrate a strong track record of increasing responsibilities (usually indicated by titular increases) you will have a good shot of pulling down some serious cake in the future.

And why shouldn’t you?  Why would you leave an organization where you clearly kick butt, earn better titles, more responsibilities and are highly valued?  Another organization would have to pull a crazy dump truck full of cash to your house to woo you away.

And they will.  It will happen.  But not for a while, so relax.  In eight (8) to ten (10) years, after you have earned all those titles, that dump truck will come rolling in and will leave a steaming pile of Benjamins right at your doorstep.

So you see, rarely is the money in the raise itself, it’s the title and the experience you’ve earned that will pay off later.  It will pay off in the salary negotiations you drive when a new organization offers you a job.

So forget the little annual raises.  They’re nice and they make you feel good and appreciated, but don’t think you are going to get rich on them.

Set yourself up for future financial success by kicking butt now, earning better titles and establishing a Roth IRA so you can sock away all that upcoming cheddar for a tax-free retirement.

Oh, and if you were counting, we just got away with saying “tit” four (4) times in a seemingly professional advice blog.  BAM!


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