Would you be upset about a 2% raise? (employee, degree, employer)

[Squirl]

Here's the situation: jobs are at a manufacturing plant and there have been no pay increases since 2008. However, the company has had very few layoffs and management says that not having pay increases has allowed them to keep from doing layoffs. Lately they have begun hiring again....just about a dozen jobs. There are about 200 workers at the plant. With the forecast of a better year ahead, they are revamping their pay program to more closely align their jobs to pay ranges that reflect market rates (they post all the jobs and pay rates on the bulletin board) and many of the jobs are now in different pay grades. The pay scales are being increased to allow for future openings/promotions but some jobs are now in lower job grades. The impact for the individual workers will be about a 2% increase. That means, for example, the hourly paid employee earning $16.50 will be increased to $16.83. That pay rate meets or exceeds local pay for those kinds of jobs. Do you think employees used to past 4% increases will be upset with 2% increases?

Since I am a resource (I am a consultant) to the management team, I tend to see things from that perspective....so looking for others' input. My core question is if employees who have not had raises -- but got to keep their jobs -- have the expectation that when business does improve they will have the same pay raise experience as they had in the past. Your thoughts?

[Hopes]

If employees haven't had raises since 2008, they'll appreciate any raise and still having a job in this economy.

The very fact the company kept its word and didn't lay off during the pay freeze gives the company credibility in the eyes of the employees.

Be forwarned, the employees will most definitely expect 4% increases in the future when the economy improves.

[Bideshi]

We haven't had a raise in four years, and our company health insurance has gone up almost 30% each year. We are losing ground fast.

[Nick99]

I think a reasonable employee will be satisfied with 2% nowadays, given the economy and the degree of salary cuts, and layoffs. It is consisent, I think, with CPI, ie. cost-of-living increase.

[MSchemist80]

I haven't received a raise or benefits the entire 2 years I've been here.

[manderly6]

"That pay rate meets or exceeds local pay for those kinds of jobs"

It sounds like they would be stupid to be upset with anything.

[Squirl]

This company -- my client (I do their pay design) -- has tremendous integrity. They have never been the high payer in their locations....always paid about market. But management always tells me about how many employees constantly complain about the pay. It is gritty, factory work and it requires good skills. Management places great value on the workforce. But it is a workforce of continual grievances. It is very, very hard work. But if the company spends more on pay they just cannot stay in business......
But management is starting to think that no pay raise is less likely to cause upset than a 2% raise. Since they are having a fragile recovery and orders ahead, they do have room in the budget and I am advocating they do the raises and revamping the pay ranges so they have a plan for the future new jobs and openings and employees can bid on them. This company maintains a completely transparent pay program for employees.

[Hopes]

Originally Posted by Bideshi

We haven't had a raise in four years, and our company health insurance has gone up almost 30% each year. We are losing ground fast.

Everyone is losing ground with health insurance, which isn't included in cost of living calculations.

[Hopes]

Originally Posted by Squirl

This company -- my client (I do their pay design) -- has tremendous integrity. They have never been the high payer in their locations....always paid about market. But management always tells me about how many employees constantly complain about the pay. It is gritty, factory work and it requires good skills. Management places great value on the workforce. But it is a workforce of continual grievances. It is very, very hard work. But if the company spends more on pay they just cannot stay in business......
But management is starting to think that no pay raise is less likely to cause upset than a 2% raise.

In addition to a 2% pay raise, is it possible to consider adding other types of incentives, benefits and/or perks? The job sucks. There's nothing you can do about that. They'll complain regardless of what they get paid. I'm not talking about handing out expensive fringes. For example, the implimentation of a work/life balance progam shows employer appreciation. I'm not saying that particular program. I don't know the demographics of your workforce. My point is to create other ways to improve employee moral.

[Hemlock140]

We recently had a 2% increase in all salary ranges. That's not raises, but simply raising the top of the ranges when employees hit the maximum.

All of our raises are based on performance. Our annual maximum is set each year. Last year it was 4.5%, this year it has been dropped to 3.5%,
and we also had our medical contribution increased. Many people might prefer a 2% raise to everyone over having to justify an outstanding performance every year to get 1-3.5%.