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    • Clivek77
    • By Clivek77 29th Nov 17, 1:53 PM
    • 11Posts
    • 0Thanks
    Changing pay anniversary from 12 months to 15 months
    • #1
    • 29th Nov 17, 1:53 PM
    Changing pay anniversary from 12 months to 15 months 29th Nov 17 at 1:53 PM
    My employer is reportedly moving the pay review date after just having awarded 2.1% this year.

    The next pay review will be 15 months away instead of the normal 12 months.

    People are claiming that this results in the pay award being in real terms 1.8% for 15 months.

    I can't quite understand it as I worked out the monthly value and subtracted 3x that from 2.1% and came up with 1.57%

    Can anyone with strong maths skills break this down so it can be discussed rationally?


Page 2
    • Clivek77
    • By Clivek77 30th Nov 17, 12:30 AM
    • 11 Posts
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    But im still correct, backdating a 0% rise is as fair as backdating a 0.1% rise, the mechanic is the same.
    • Xbigman
    • By Xbigman 30th Nov 17, 12:35 AM
    • 3,093 Posts
    • 1,335 Thanks
    I disagree with the majority on here. If you have a pay award that in part says that the next 12 monthly pay award is in 15 months time (that is 15 months from this pay award) then working out 2.1% as a 12/15th's yearly equivelent now is valid if the extra money was included in the 2.1% award. Saying the 12 monthly equivelent needs to be calculated in the next payrise is not valid if in 15 months time they negotiate a 12 month deal on the basis that the extra was paid 15 months previously.

    My employers have just done a 15 month deal but they split up the rise so that we had a 12 month rise and then after 3 months a much smaller 3 months rise. This seems a much more straight forward way of working it all out and results in nice round figures. This brings us into line with calendar years so I suspect we might do another 15 monther next year to bring us into line with tax years.
    This is what happened with the holiday booking system too, brought into line with tax years with a 3 month long 'holiday year'.

    Which brings us back to the OP. Its possible the union agreed a 1.8% pay deal and then were offered a .3% extra payment upfront for the extra 3 months. The management could argue that the extra .3% upfront is actually worth more than .3% because you recieve it for 15 months and not 12 months. That could make up the difference between the 1.68% (mathamatical) figure and the 1.8% (union) figure.
    In the end it is what it is and must be viewed in line with previous years. I've had rises above RPI when RPI was low and this year well below RPI now RPI is high. Overall it works out about right.

    Last edited by Xbigman; 30-11-2017 at 12:37 AM.
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    • theoretica
    • By theoretica 30th Nov 17, 9:42 PM
    • 5,153 Posts
    • 6,401 Thanks
    How much the next review being delayed will be worth numerically will depend on how big the next rise is. For simplicity, I am going to assume it might be 2% which happens in 15 months rather than 12. Three months is a quarter of the year, so 3 months without a 2% payrise is worth 0.5% of the annual salary (OK, of the salary increased by the present 2.1% rise but I don't feel like compounding). But that 0.5% if spread over the whole 15 months will come to 0.4% a year. So roughly reducing the present effective payrise to 1.7% by this calculation. In addition, every year going forward will have three months which will now be paid before, rather than after that years pay award, adding to the longterm financial consequences of this change.

    A different way of working, but the final number isn't that different.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • Clivek77
    • By Clivek77 30th Nov 17, 10:11 PM
    • 11 Posts
    • 0 Thanks
    Brilliantly explained. Thanks
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