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The Three Percent Difference

By Andy Warren,

Today we have a guest editorial from Andy Warren.

Here in the US most employees will typically get a 2-5% annual increase at the time of their review, assuming that the economy is doing reasonably well in that particular year and that they haven’t hit a salary cap. A three percent difference between top dog and bench warmer? Is it worth working hard for three percent?

It’s occasionally possible to do better of course. Sometimes the company will have a great year, or you’ll deliver on a tough project, or maybe work your way into a more senior title that opens up the range of possibilities for that year.

But for most of us, it is what it is. Let’s look at some numbers. If you go into the review making $75,000, you might walk out making $76,500, or you might be making $78750. In other words if you work hard and can show your manager that you’ve delivered value you might add $2,250 more to your check than the guy next to you.

It’s not a $2,250 bonus you’re trying to earn; it’s $2,250 a year extra for what you hope will be many years. Without making it complicated by compounding the raises, in five years you’ve earned $11k more than the two percent bench warmer.

So, what about you, have you run into the three percent difference? Do you take the road I recommend and work to get what there is to get, or does the lack of a real incentive tilt you towards doing enough to get by instead? Can you think of a better system than the one we usually use now?

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