Yearly increment

[Button]

Is it common HR practice to have percentage-based yearly increments? This is how it is done in my company, and it seems to me to be an unfair system that favours those earning more. An example. Suppose X (with experience) and Y (fresh graduate) join a company, with salary of 6k and 3k respectively. And assume that both are consistently rated A over the next few years, and that the increment for A performers is 10%. Over time, the salary gap between X and Y is going to widen. 3 years later, for example, X's salary will rise to $8k while Y's salary will only rise to 4k.

Comments?

[undiscern]

Originally Posted by Button

Is it common HR practice to have percentage-based yearly increments? This is how it is done in my company, and it seems to me to be an unfair system that favours those earning more. An example. Suppose X (with experience) and Y (fresh graduate) join a company, with salary of 6k and 3k respectively. And assume that both are consistently rated A over the next few years, and that the increment for A performers is 10%. Over time, the salary gap between X and Y is going to widen. 3 years later, for example, X's salary will rise to $8k while Y's salary will only rise to 4k.

Comments?

That is how it works in practice. That is why the Fresh graduate Y MUST job hop to another company after 3 years and his pay will be about 5k+

[miwashi]

Unless, like me, you have never received job offers with higher pay, only pay cuts.

Hi,

The reality: Both experienced and fresh MAY receive barely 2% annual increment. Thus, the absolute value are almost negligible. Based on your example of $6K vs $3K, the increments are $120 vs $60.

If there are firms that pay in the range of 10% increment, please let us know.

[undiscern]

Originally Posted by Unregistered

Hi,

The reality: Both experienced and fresh MAY receive barely 2% annual increment. Thus, the absolute value are almost negligible. Based on your example of $6K vs $3K, the increments are $120 vs $60.

If there are firms that pay in the range of 10% increment, please let us know.

President office Singapore. 26% increment
Singapore President's annual salary tops S$4.2 million - Yahoo! News

my friend:
grad in 2005, engineer in EPC company serving oil,chemical, pharma industries.

2006: $2500, $2700 (confirmed 6 mths later)
2007: $3000
2008: $3300
2009: $3300 (recession no increment)
2010: $4000 (double-increment to compensate 2009 freeze)
2011: $4700 (promotion)

as shown, yearly increment abt $300-$350, which is around 10%.
promotion increment $700

For those who are getting 10% it is quite good. According to the Annual Wage Review, it is typically 4~6%.

My company gives me a measly 4% increment per year which is crap because if you were to take inflation into consideration which is about 2~3% per year (with exception of 2009 which was 7%!!) I am basically getting a 1% increment per year and -3% increment for year 2009.

Increment should be on top of inflation to give a true figure.

normally annual increment is 2-6%,

for my example below i will assume annual increment (AI) be 5%

---------------------------------------------
different company pay AI differently, some pay AI in term of % as you have mention, while some pay AI by giving fix quantum increment throughout the board.

(my example will exclude promotional increment)
----------------------------------------------------------------------------------
AI base on %

MR A
basic = $3000
AI = 5%
After 10 years with the same company = $3000 x (1.05)^10 = $4886

MR B
basic = $4000
AI = 5%
After 10 years with the same company = $4000 x (1.05)^10 = $6515

when AI is payout in %, the higher the basic salary will be better, as it will generate higher AI on a higher base.

---------------------------------------------------------------------------------------

AI base on fix quantum increment

MR A
basic = $3000
AI = fix $150 every year
After 10 years with the same company = $3000 + 10(150) = $4500

MR B
basic = $4000
AI = fix $150 every year
After 10 years with the same company = $4000 x 10(150) = $5500

when AI is payout in fix quantum, every one get the same increment.

----------------------------------------------------------------------------------

In the long term, annual increment in % will be better, as the base salary getting higher, the annual increment will be larger!!1

My increment is actually quite fast, and furious, and real. i work in a bank (yes real bank with a real job, and real pay)

All figures in SGD or SGD eq on annual basis
2004: grad with local undergrad+master and started at base of 40.6k and pro-rated half-year bonus of 8k
2005: was promoted and base up 11.7% to 45.6k and full year bonud at 18k
2006: base unchange and no bonus cos i left in May
2006-2007: student again
2007: work for a new firm in nyc. sign on bonus 50k usd, base 95k usd, half year stub year 25k usd
2008: base unchanged at 95k usd, no bonus cos i left in June
2008: back in SG working for another bank, base 110.4k, half year stuf bonus 40k
2009: promoted at mid year, base up 20% to 132.5k, full year bonus 92k; sideline business 15k
2010: promoted again end of 2009 but base unchanged, full year bonus 100k; sideline business 22k
2011: base up 10% to 145k, full year bonus expected 120k; sideline business expected 40k

So my base is up from 40.8k to 145k in 7 years, that's 19.8% per annual on geometric average. Total comp from 48.6k to (expected) 305k, or 30% per annum.

I think I am lucky, but I think I should make 500k a year, at least.

[undiscern]

Originally Posted by Unregistered

My increment is actually quite fast, and furious, and real. i work in a bank (yes real bank with a real job, and real pay)

All figures in SGD or SGD eq on annual basis
2004: grad with local undergrad+master and started at base of 40.6k and pro-rated half-year bonus of 8k
2005: was promoted and base up 11.7% to 45.6k and full year bonud at 18k
2006: base unchange and no bonus cos i left in May
2006-2007: student again
2007: work for a new firm in nyc. sign on bonus 50k usd, base 95k usd, half year stub year 25k usd
2008: base unchanged at 95k usd, no bonus cos i left in June
2008: back in SG working for another bank, base 110.4k, half year stuf bonus 40k
2009: promoted at mid year, base up 20% to 132.5k, full year bonus 92k; sideline business 15k
2010: promoted again end of 2009 but base unchanged, full year bonus 100k; sideline business 22k
2011: base up 10% to 145k, full year bonus expected 120k; sideline business expected 40k

So my base is up from 40.8k to 145k in 7 years, that's 19.8% per annual on geometric average. Total comp from 48.6k to (expected) 305k, or 30% per annum.

I think I am lucky, but I think I should make 500k a year, at least.

You made the right move to go to nyc and then come back.. If you had remained in SG, difficult to get what you are getting now.