Working out effective salary increase

TBagpuss

pecunianonolet said:

Usually around the savings board and surprised about the backlash here. My question was mainly around simple mathematics to work this out. Because when a letter states annual review I would expect that annual means every 12 months and not 16 months.

Jan 23 we got 3% wage increase when inflation was above 10%. We got an extra cost of living bonus of 3% followed by a 10% annual bonus. Not too bad but would have given up the 3% cost of living bonus any time in favour of a higher wage increase as this will benefit me long term, also when I consider pension contributions.

Our company bought another 2 or 4 (hard to keep track) companies over the last 2-3 years, we a re still hire many people and certain parts of the business struggle for resource as we are swamped with new orders. We are still allowed to fly business class and have first class train travel for journeys over an hour. 

The 3% increase is under that circumstance rather annoying, when your business is doing very well. 

To those moaners about "find another job", yes, maybe I should become a train driver. High in demand, earn much more as I do, can go on strike every couple of months and don't require bachelor and master studies plus all the fees and cost around it for education and no requirement for additional language skills either.

The increase wasn't even noticeable after tax considering everything that has gone up. 

Unless anybody does really bother to work out the mathematics and can help with this there is nothing else to add.

I think it depends a bit on whatyou are trying to calculate - if your pay increased from May then yes, you can work out the actual amount extra you will get for the year, divide it by 12 and work that out as a % of your previous annual salary but it's worth asking ypurelf what are you hoping to achieve?  Of course you can feel annoyed that things weren't backdated, but you would have been worse off longer term if they had framed it as a 2% rise backdated to Jan, as the base numbre for future rirauses would have been lower.

You are correct that ifyou look at the period Jan - Dec in isolataion, a 3% rise from May onwards May is equivalent to a 2% rise backdated to Janaury.

However, another way of looking at it is that they reviewed things and decide not to increase pay in Janaury, then fidid a further reiew in May and ave you a rise. If they don't review again until next May then you';; have had the 3% over a year.

I get tht cost of living has gone up, but of coruse it's also effectively gone up for businesses as well  - your employers business may still be busy but that doesn't automatically mean that their net profits, or profit marginshave gone up , they may even have gone down. 

IF they have had mergers or takeovers then they probably also have some juggling to do to try to bring the different parts of the busienss and the different employees and contracts into alighnment 

pecunianonolet

Hoenir said:

pecunianonolet said:

 My question was mainly around simple mathematics to work this out. Because when a letter states annual review I would expect that annual means every 12 months and not 16 months.

Personally I'd be more concerned as to why your employer felt it neccessary to implement such a policy. Such decisions aren't taken lightly. As will lead envitably to murmurings of discontent at the water cooler in the office. For the employer there's the risk of losing valued staff. Never good at a time when financial performance is key to the future success of the business. 

Because it was always done like that. Up until last year we didn't even have any performance reviews and everyone got a flat 10% bonus. If you're rather profitable you have the luxury of being (more) inefficient.

 Valued staff is, in many parts of the business, rather upset due to this but also other factors and I would not be surprised if we're just at the beginning of a wave of valued staff moving elsewhere.

pecunianonolet

TBagpuss said:

pecunianonolet said:

Usually around the savings board and surprised about the backlash here. My question was mainly around simple mathematics to work this out. Because when a letter states annual review I would expect that annual means every 12 months and not 16 months.

Jan 23 we got 3% wage increase when inflation was above 10%. We got an extra cost of living bonus of 3% followed by a 10% annual bonus. Not too bad but would have given up the 3% cost of living bonus any time in favour of a higher wage increase as this will benefit me long term, also when I consider pension contributions.

Our company bought another 2 or 4 (hard to keep track) companies over the last 2-3 years, we a re still hire many people and certain parts of the business struggle for resource as we are swamped with new orders. We are still allowed to fly business class and have first class train travel for journeys over an hour. 

The 3% increase is under that circumstance rather annoying, when your business is doing very well. 

To those moaners about "find another job", yes, maybe I should become a train driver. High in demand, earn much more as I do, can go on strike every couple of months and don't require bachelor and master studies plus all the fees and cost around it for education and no requirement for additional language skills either.

The increase wasn't even noticeable after tax considering everything that has gone up. 

Unless anybody does really bother to work out the mathematics and can help with this there is nothing else to add.

I think it depends a bit on whatyou are trying to calculate - if your pay increased from May then yes, you can work out the actual amount extra you will get for the year, divide it by 12 and work that out as a % of your previous annual salary but it's worth asking ypurelf what are you hoping to achieve?  Of course you can feel annoyed that things weren't backdated, but you would have been worse off longer term if they had framed it as a 2% rise backdated to Jan, as the base numbre for future rirauses would have been lower.

You are correct that ifyou look at the period Jan - Dec in isolataion, a 3% rise from May onwards May is equivalent to a 2% rise backdated to Janaury.

However, another way of looking at it is that they reviewed things and decide not to increase pay in Janaury, then fidid a further reiew in May and ave you a rise. If they don't review again until next May then you';; have had the 3% over a year.

I get tht cost of living has gone up, but of coruse it's also effectively gone up for businesses as well  - your employers business may still be busy but that doesn't automatically mean that their net profits, or profit marginshave gone up , they may even have gone down. 

IF they have had mergers or takeovers then they probably also have some juggling to do to try to bring the different parts of the busienss and the different employees and contracts into alighnment 

Thank you for your answer, what I am trying to achieve is simply the fact that the company seems to be misleading employees in its communication and make people believe they got 3%, when in fact they only got 2%, viewed in isolation over the course of a calendar year, which is the regular review cycle.

"As part of the company’s annual inflationary pay review, we have reviewed your salary in line with

inflation.... with effect from 1st May 2024, your salary will increase by 3% to.."

Savvy_Sue

I'm not sure how else they could have said this: 

pecunianonolet said:

Thank you for your answer, what I am trying to achieve is simply the fact that the company seems to be misleading employees in its communication and make people believe they got 3%, when in fact they only got 2%, viewed in isolation over the course of a calendar year, which is the regular review cycle.

"As part of the company’s annual inflationary pay review, we have reviewed your salary in line with

inflation.... with effect from 1st May 2024, your salary will increase by 3% to.."

Your salary did increase by 3% wef from 1st May. What you got in April was 3% less than what you got in May. 

Now someone else has confirmed that the result is the equivalent of a 2% increase over a year, what do you think they should have said? I'm struggling to work out anything which would make sense ...