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There's a Huge Difference Between Average Salary Increases and Top Increases

Posted: 13 Feb 2017 02:05 AM PST

Here's a piece from Kiplinger's where they ask a compensation expert what 2017 looks like for pay.

They begin by asking what kind of a raise people can expect in 2017. Her response:

Companies are forecasting 3% increases, similar to years past. But how that budget is spent may vary by person. Employees with the highest possible rating could see increases in the range of 4.5% to 5%, while low performers get an increase between 0.7% and 1%. Bonuses for salaried employees are projected to be 11.6% of pay, on average, with rewards for special projects or onetime achievements set at 5.6%, on average.

I've been saying for years that there's a HUGE difference between earning the average increase and a top-level increase. The difference between 3% raises and 4.5% to 5% raises over the course of a career adds up to an additional several million dollars over the course of a working lifetime. That's why I always stress that people need to grow their careers. It's a key step in becoming wealthy.

Next they ask her what workers can do to improve their standing. In other words, how can they get those top raises? Her response:

A lot of companies are making the process more about feedback than about performance rankings. That means there's a real opportunity to sit down with a manager and make sure there's a mutual understanding: What’s really expected of me, how will I be measured, and how will that impact my pay? The pace of work changes quickly, so ask how your goals are changing. Employees can also ask about more-individual approaches to work: Can I work from home or work alternative hours? A lot of times these programs are not communicated as well as they could be. They might not put dollars into your pocket, but they make life easier.

The key is to develop a systematic way to both over-perform and have your boss know that you over-performed. If you can do this, top raises will be more of a way of life for you and your income will take off, helping you make millions more over your career's lifespan.


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