General Question

KNOWITALL's avatar

What is your opinion on across-the-board annual pay increases?

Asked by KNOWITALL (25665points) July 29th, 2019

Do you believe across-the-board annual increases are acceptable or do you prefer a performance review or other formula?

Also, this is not for private sector jobs, but city government jobs which includes Police, Public Works, as well as all other city employees.

If you do not agree with across-the-board annual increases, please tell me why specifically, if you will, as well as your solution.

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45 Answers

gorillapaws's avatar

Due to the nature of inflation, everyone gets an annual decrease in the buying power of their income. Therefore, automatic across-the-board increases that are indexed to inflation is reasonable. Beyond that, I think performance is one factor, but so is experience and mitigating the costs of hiring and retraining a replacement too. It’s a case-by-case basis.

KNOWITALL's avatar

@gorillapaws Interesting take, thank you. Do you think 3% is reasonable?

zenvelo's avatar

I am against an across the board x% increase, because it dampens incentive to improve performance.

But I am in favor of at least annual increases in pay grades and merit increases on top of that, as long as adjustments are made to keep people that have worked to get above the bottom of a grade bracket and recognized for continued good performance.

KNOWITALL's avatar

@zenvelo I believe it decreases incentive, too.

Do you think 3% per year is excessive or fair?

gorillapaws's avatar

@KNOWITALL “Do you think 3% is reasonable?”

In years with low inflation, it could be excessive and in years with very high inflation it could be too low. You can lock it in to adjust to the consumer price index automatically, which I think is the most fair way to do things.

KNOWITALL's avatar

@gorillapaws I’m curious if it’s standard for govt entities. I may need to ask around.

Thanks!

JLeslie's avatar

I’m ok with across the board pay increases to keep up with inflation, but not necessarily every year and not necessarily at the rate of inflation. Keep in mind the private sector does not get these automatic bumps, but often the public sector is lower paid in certain jobs.

Aside from inflation increases I feel there should be either bonus opportunity or pay increase for merit too. Most government jobs have salary range at each level, so even someone who stays in the same job or same level can get an increase as long as they are not at the top of the range.

Another incentive can be additional PTO in lieu of salary increases.

Edit: an evaluation should be done periodically scrutinizing how many are below or above the average in each pay grade, and further analysis for minority groups (this includes gender) to be sure it is being done fairly. This also helps watch for long term employees who might be behind in salary to new hires.

Patty_Melt's avatar

I agree 100% with @gorillapaws.

KNOWITALL's avatar

@JLeslie Being in Missouri, the residents are NOT happy with it and believe it’s excessive, but it’s a red state, with a lot of financial conservatives who have little trust for govt entities in general. I needed an outside take on it, so thanks!

jca2's avatar

Are you negotiating a contract, @KNOWITALL?

I work for local government (County) and currently work for the organization that negotiates their contract. I don’t even want to say the type of organization it is, but it’s one that advocates for workers’ rights and pay.

When I started working full time for my employer, in 1996, I understood that I got what we call a “step increase.” One of my coworkers told me we were without a contract at that time, and I expressed confusion because I told her I know we get one raise a year. She said no, we get two raises a year, the step increase and the contract raise. Only the people at the top step (step 5) got one raise, the contract raise. I said “These county workers are greedy. They aren’t happy with one raise per year, they want two.” Then I understood, when I reached step 5, that without the contract raise, there’s no raise.

We were most recently without a contract for almost 8 years, and so for those at the top step, there was no raise at all. Me, too. No raise for almost 8 years.

Like @JLeslie said, government workers are traditionally lower paid than those in private sector. Many people left during those 8 years, to get jobs at other government employers, or private employers, because they made more than we did, stuck with 8 years with no raise.

What my employer does is annual evaluations (or at least they’re supposed to) and then you are recommended for the step increase. Some supervisors don’t do the evaluation, because they’re short staffed and there’s not much time. You automatically get the step increase, unless you are a total screw up, in which case it should be noted on your evaluation and you have to be told in writing, and then you are eligible to get it in 3 months time (next quarter). If you screw up again, you may go another three months but you have to be really bad for that to happen. Typically the union is called in and represents the person to figure out what is going on and what can be done to fix it.

Our current contract is not for 3 percent for any year. There were a few years of zeroes. I believe there are some 2.5’s. There were a few 1%‘s. People were mad, especially because we went so long without any raise. However, no political leader is going to budget millions and millions (it’s a large employer) for 8 years of back pay at a high percentage. That would be political suicide for him.

KNOWITALL's avatar

@jca2 Nope, just a city budget and vote.

Every year I voice my objections and every year I am outvoted. Against the 3% across-the-board raises.

Even being flexible on the percentage would make me feel I’ve done my duty to the residents and budget, as there are several more important line items.

jca2's avatar

We would have been thrilled with 3 percent, but like I said, 3×8 = 21 and no way were we getting a 21 percent raise.

We probably make more than the government workers in Missouri do, but our cost of living is higher here.

KNOWITALL's avatar

@jca2 This is small town USA. We cant support city wages.

I polled several locals, none of us are guaranteed a yearly raise, let alone a set amount with no review. Its odd for our area.

JLeslie's avatar

Wait! Every year it’s been 3%? That seems awfully generous to me, unless all the people getting the 3% are paid very low wages and salaries (I’m talking under $40k).

I have a question @KNOWITALL about your red area and their views on government. When I lived in TN more than one anti government anti tax person I knew was ok with local government. It seemed to me they viewed the central government as a liberal, secular, horrible entity. They also spoke badly about Memphis city government, but Memphis is a blue city so that’s sort of consistent. Memphis also has had all sorts of scandal with local politicians.

LuckyGuy's avatar

There should be 2 components to the annual pay increase: a Cost of living adjustment.and a Merit adjustment.
The COLA is tied to the inflation index. That varies from year to year and is a readily available number.
The Merit adjustment is based upon what the company can afford.and employee performance..For example, the business might be able to support a 5% increase that year. The majority of employees would receive that. However, some employees will be given 6, 8 10% in the extreme while others will be given 3 or 0 in the extreme. The curve should look like a bell curve.

I worked in a large company and saw this in action. It is not always the best idea. Once the employees recognized they were being ranked they realized there was no incentive to help each other. Their raise depended upon them looking better than the other guy. That ended up being a big mistake. We modified it to pay teams for their performance.

KNOWITALL's avatar

@Jleslie Yes, we vote to give them 3% each year, I’m usually the only one who grumps.
What was the question? They hate us all if thats what you’re asking. Any authority here is blamed for everything, even PD and PW.

@LuckyGuy It’s a tough situation in our city, many employees are friends and neighbors. I cant change anything wirhout my council voting with me.

JLeslie's avatar

@KNOWITALL Yes, that was the question. Lol. :)

KNOWITALL's avatar

@JLeslie Whats tough is all the griping is on Facebook but we cant reply or its public record, by law. They refuse to come to any meeting because we ‘dont listen’. So ya, not fun. No matter how educated you are, imparting that knowledge is still tricky. Three people at our TIF public hearing.

JLeslie's avatar

@KNOWITALL When I lived in a small town (pop around 12k) I used to go to the meetings. About 20 people would show up typically, unless there was an issue people were really freaking out about, and then it would double. I don’t know how big your city is.

Do you have a distribution list residents can get on for emails?

Good policy about the Facebook.

KNOWITALL's avatar

They want facebook or nothing. Its crazy. We havw options, all too much effort I guess. We’re about 4000 last census, we’ll see next year.

jca2's avatar

@KNOWITALL: My boss is a politician and this is why I hate politics. People don’t get involved, but they gripe. They don’t know how things run, but they gripe, They don’t vote, but they gripe. Gripe gripe gripe about things that we can’t do anything about. They want, want, want but don’t have a clue. Every faction wants what benefits them.

(there are other reasons why I hate politics, from an internal standpoint, but this is one thing).

KNOWITALL's avatar

@jca2 Yes, thats the worst part of the job for me, too.

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gorillapaws's avatar

It just occurred to me that if you were going to pursue the inflation-based strategy. Rebranding it from an “automatic, across-the-board pay raise” to an “automatic, across-the-board inflation adjustment” might be more palatable.

KNOWITALL's avatar

@gorillapaws Thanks. I’m against it personally, but we’ll see how it goes.

When I look at the 2015 budget vs last year, those 3% across the boards each year are tens of thousands of additional dollars. That will be my argument against them.

jca2's avatar

Are the employees working under a contract, @KNOWITALL? If so, there’s probably not much you can do about them.

gorillapaws's avatar

@KNOWITALL ”...tens of thousands of additional dollars…”

That’s true, but remember that the buying power of those employees is decreasing by that much every year. By not putting in some mechanism to adjust for inflation, you’re effectively giving everyone a paycut every year in real dollars—automatically. That’s a pretty shitty thing to do to people who are working for you IMO.

KNOWITALL's avatar

@gorillapaws Would you rather have a raise or get fired? Because that was the other option.

gorillapaws's avatar

@KNOWITALL You were going to fire everyone?

Remember if inflation is 10% and you get a “raise” of 5%, that’s the equivalent of a 5% pay cut.

JLeslie's avatar

@gorillapaws Most people I know don’t get raises every year to keep up with inflation. Do most people you know get raises like that? If I remember correctly inflation has been closer to 2% the last few years, so 3% would be a raise higher than inflation.

jca2's avatar

@JLeslie: Maybe there were years when they got zeroes?

JLeslie's avatar

@jca2 I might have misunderstood what the OP wrote. I thought she said they get 3% every year? My parents both worked for the government, so I definitely have empathy for public sector salaries and cost of living increases, or a catch-up increase if there hasn’t been a raise in a long time, but in the private sector people often don’t get an automatic raise because of inflation.

I don’t think I ever had a cost of living raise, nor my husband. It’s usually a merit raise, or a raise with a promotion, or a hike in pay for changing to a new company.

KNOWITALL's avatar

They get a 3% across the board raise every single year. No zero’s, no 1%, always 3%, good years or bad. It’s not financially feasible to continue this practice.

@gorillapaws The 3% is unsustainable at this point. So the idea was to get rid of a few, per the office mgr, so the rest could keep their raises. I’m trying to save jobs for good people by lowering the annual raise or skipping a year.

jca2's avatar

They work under a union contract, @KNOWITALL?

gorillapaws's avatar

@KNOWITALL 3% is higher than the CPI by about a percent in recent years. I think a credible case can be made for reducing the automatic raises.

KNOWITALL's avatar

@jca2 Not that I know of.

@gorilla Thats what I’m looking for. The ones that would go, need the jobs most.

jca2's avatar

@KNOWITALL: Here in NY, all government workers are union. You might want to double check that there’s no union (and therefore, union contract). I’m just wondering where they came up with the 3 percent. It sounds like it’s contractual. Here, when there’s no contract, like when the contract expires, there’s no raise.

KNOWITALL's avatar

@jca2 Its not my first budget, and we were told it was our decision. As I said earlier, traditionally in our city, 3% is the norm. PD asked for more, we debated and did what we felt the budget could handle.

JLeslie's avatar

The northeast, west coast, and states like MI and OH tend to be very unionized both public and private, while the South, and other Bible Belt states, tend to have some of the lowest union rates. It doesn’t surprise me that MO, might not have a union representing government workers in parts of the state.

States that are heavily unionized, even if your specific company doesn’t have a union, since they compete with union all employers tend to rise to the union standard. It’s surprising to me too that without a union they are passing this systematic 3%, which is above the inflation rate, unless the pay was historically very low for years, and it’s a way of catching up?

Since you live in a conservative town, I would emphasize that taxes will have to be raised to pay for it. Taxes! Conservatives hate taxes. Lol.

KNOWITALL's avatar

@JLeslie Yes, it’s not very union friendly here except a few of the trades. They take your money and don’t do much to help you when things go wrong.

Yes, that’s very much how many here feel.

jca2's avatar

@KNOWITALL: Is it this? I cut and pasted it from an article I googled, from January 2019:

Three percent, across the board.

That’s the pay raise Gov. Mike Parson is asking lawmakers to approve for all of Missouri’s state employees, for the state business year that begins July 1.

On top of that, State Budget Director Dan Haug told reporters Wednesday afternoon, Parson’s proposed budget will have an $8.2 million allocation to adjust Corrections officers’ salaries, and additional money to adjust the salaries of about 4,000 state employees so they can earn the “market minimums” for their jobs, when compared with other states and private businesses that have similar kinds of work.

“I also want to be very clear that the problem is not our state workforce,” Parson said during his State of the State address Wednesday afternoon to a joint legislative session. “To the contrary, I have found, overwhelmingly, that we have a remarkable and dedicated state workforce.

“But, we as elected leaders must do a better job (of) clearly identifying expectations and priorities, communicating and managing responsibilities, and providing better training to promote our success.”

State-paid surveys have shown, on average, Missouri government employees earn less than state employees in the other 49 states.

Add benefits, and the state workers’ income packages rise only a few points, those surveys reported.

Although the budget is for the state business year that begins July 1, Haug said the proposed raises wouldn’t kick in until Jan. 1, 2020.

“The last several (raises) have been Jan. 1,” he told the News Tribune. “I think that’s become the new ‘normal’ for us.

“They’ll get (a raise) this January and they’ll get one next January.”

Lt. Gov. Mike Kehoe long has advocated for better pay for state employees — as a member of the Jefferson City Area Chamber of Commerce, when he was a member of the state’s six-member Highways and Transportation Commission, and during his last nearly eight years as a state senator.

“I’m super happy that I’ve been able to use my position (as lieutenant governor) in the governor’s recommendation, that helps the state employees some,” Kehoe said Wednesday evening. “This will take effect a year from now.

“The governor is very focused and I am absolutely telling him all the time that we have some fantastic people working in this state, and we need to figure out how to compensate them.”

Senate President Pro Tem Dave Schatz, R-Sullivan, said: “Obviously, we’re trying to attract people to fill jobs and vacancies that we have, and the environment that we have, with 3 percent unemployment, pay is an issue.

“And we can see this revolving door of people (when) you want to try to retain and keep good, quality people, and the only way to do that, in a competitive environment, is to increase the pay.”

Haug said the proposed budget also increases the state’s funding “for both the Missouri Consolidated Health Care Plan for state employees and for the pensions.

“The pensions, we funded the actuarially requested amount.”

The proposed budget also cuts 430 jobs, Haug announced, but administrators expect to achieve those cuts through attrition, canceling positions that currently aren’t filled, or that will become vacant when someone retires.

He said those positions are throughout state government, and not concentrated in any one agency.

KNOWITALL's avatar

@jca2 See, it’s normal here. Only 430 jobs lost, but oh well. I don’t want that for our city.

jca2's avatar

It sounds like not all are actual people who will be jobless, since they mention attrition, retirement and vacancies (the job is not actually filled).

jca2's avatar

Are these state workers, @KNOWITALL or some other entity?

KNOWITALL's avatar

@jca2 Another entity.

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