If you're counting on a pay raise for next year, you might be in for an unpleasant surprise.
That's because despite greater competition for workers and a steadier economy, employers are re-thinking just who should get a pay boost -- and why.
According to an Aon Hewitt survey of 1,062 companies, an average of 12.5% of payroll is targeted for incentive and bonus pay in 2018. Two-thirds of the employers surveyed report they will use merit pay to reward workers who are doing a good job or those who need to improve. But 40% of those same employers say they plan to trim or eliminate pay boosts for low performers.
Further, some companies are going to raise the bar for high performance, with 15% of organizations say they will set higher targets for bonuses and incentive pay.
While some employers will continue their standard 2% to 3% annual pay raises for all employees, it may only be a matter of time before more organizations start to tie all employee raises directly to performance.
The message is clear: If you want a pay raise every year, you're going to have to ensure you hit important targets and make sure your boss knows it.
Here are some things to keep in mind as you go to work every day:
- Be part of money conversations. Any time money is discussed, whether it's how to bring in new business, budgeting for a new project or cutting inefficiencies to save money, you need to take part. It doesn't matter if you're part of a key development team or a customer-service representative, you grow in value the minute you can help your employer make money or save money.
- Solve a problem. Companies like Uber and Netflix were born out of a desire to solve a problem (finding better ways to get a ride or rent movies) and that's the kind of attitude that can quickly propel you into pay bonus land. What is a problem you deal with every day that irks customers, slows down processes or makes life more difficult for your boss? Try proposing ways to solve those problems -- even if the idea may seem a bit outlandish -- and you'll be seen as someone who has the company's best interests at heart.
- Start shaking hands. Get out from behind your computer or work station and get to know people in other departments. Ask them what they do and their biggest problems. Could you do something to help? Could you collaborate to develop a better process or project? Use the same process with customers. What problems do they face that you could solve in the long term? Begin asking "why" questions and listen carefully -- do you hear a common theme that could lead to new opportunities for your company?
While such strategies may not lead to a performance bonus overnight, it's a good investment of your time that will help your company and enable you to develop the kind of skills that will certainly help your career now and in the long run.