Bonus / Salary Question

[cromartie]

Thanks for the insight. More info, I took a 50% pay cut to take this job ... hope it wasn't a mistake. Job is a small company, less than 15 employees and sells goods to the construction industry.

Financially I can't wait another year to ask for a raise, so that's out.

And if companies only gave 3% raises annually, you would never break out of entry level and make it to your median salary in your field ... so that can't be right. I can understand 3% raises once you reach your median to keep pace.

Lastly, why would I be told I would be getting a substantial bonus and then get nothing or a turkey? Wouldn't that be one of the quickest ways to get a loyal employee to quickly exit stage right?

[Tober138]

Originally Posted by cromartie

if companies only gave 3% raises annually, you would never break out of entry level and make it to your median salary in your field ... so that can't be right. I can understand 3% raises once you reach your median to keep pace.

It is all very company-specific, so it is difficult to speak in generalities. Raises in many corporate positions tend to be relatively small; significant salary increases tend to come with promotions, not annual raises.

Originally Posted by cromartie

Lastly, why would I be told I would be getting a substantial bonus and then get nothing or a turkey? Wouldn't that be one of the quickest ways to get a loyal employee to quickly exit stage right?

Depends on how your company defines "substantial". The bonus structure at my current company starts at a 10% of one's salary as a base, which is then usually adjusted a few percent up or down depending on performance. Other companies I have worked for have had a higher or lower base. Some provide a total bonus amount to a department and then the manager has to split up that amount for bonuses.

Also bear in mind that bonuses will be treated as pay in terms of deductions for taxes, 401k's etc and are usually taxed at a higher rate than regular pay. So, depending on one's particular situation, it may not be unusual for only 60%-70% of the actual bonus amount to reach your hands in actual cash.

As for employee retention - yes it is a good idea, but no one should ever bank on getting a bonus. It is great to receive, but (in terms of salary) one should never take into account more than the actual base salary.

[kodaka]

Well in my industry, $1500 would be about normal for someone with a $40k salary, assuming that the company had decent profits, before taxes which is usually about half. But every industry is different. I've never heard of anyone getting a $15k bonus on that kind of salary.

Bonuses aren't meant to make up for being underpaid. After a year, you should be able to argue a very good raise that will get you closer to the median income for your position, and do so again in a year. And it's the raise you really want, not a bonus, because all of your future raises will be based on your salary, not on your bonus.

[bouncethelight]

Originally Posted by cromartie

What chance do I have getting near my median salary for my field at my 1 year?

Obviously the other posters in this thread are right, and bonuses as large as you're hoping for are rare - but they do happen.

My first year in a new field I was making well below what I should have - but it was more than I made in my last job, and I was learning - so I was fine with it. At the end of the year, I was given a bonus that raised my income for the year up to the level it should have been at all along, and they gave me a raise at the same time, so that going forward I was at an even higher level.

Rare, but it does happen, occasionally!

[mash potato]

Originally Posted by cromartie

why would I be told I would be getting a substantial bonus and then get nothing or a turkey?

Some companies do tell their workers that they'll receive a bonus or raise and the company hopes the employee stays on anyway when it doesn't materialize with the promise of something similar for the future.

Originally Posted by cromartie

Wouldn't that be one of the quickest ways to get a loyal employee to quickly exit stage right?

Yes, it would, so this is an obvious sign that the company isn't that worried about retaining a good employee. The company is betting people will stay anyway.

[lovetheduns]

At my company for folks in that salary range you would be looking at 10% or maybe 15% if you are lucky and considered a top performer

[macroy]

Originally Posted by cromartie

Lastly, why would I be told I would be getting a substantial bonus and then get nothing or a turkey? Wouldn't that be one of the quickest ways to get a loyal employee to quickly exit stage right?

As other's have indicated. You have to read between the lines (or really look at the overall context) on comments like these.

People often misinterpret information, then pass them on to others with their spin on it. substantial is a relative word. Substantial to you may be very different than someone else. Most likely, the comment was simply an opinion - and should only be taken as that.

just my .02 of course.

Originally Posted by cromartie

What would you consider a subtantial bonus for the above circumstance?

When do companies typically give out year-end or Christmas bonuses? Early December, mid December, right before Christmas, after new year?

What chance do I have getting near my median salary for my field at my 1 year? How close should I aim to shoot for and still be satisfied? (I am performing my job at 100% of my coworkers' capacities at this point and management is extremely happy with me).

Thanks for any insight -- this is all new to me. I was used to working hourly and just collecting a pay check.

Again - substantial is really relative to your organization's bonus history.

Payout also depends on organization. If its organizational performance based, it would usually take place after the books for the year have been closed (just after your fiscal year then), some will give out holiday bonuses, which is usually around the holidays. Again, those are just guesses based on personal experience.

As for matching the median salary..... Why do you feel you deserve that salary? I don't mean to be rude - just trying to approach this realistically. Is the median level of experience for your field 1-2 years? Also - you say you are performing at 100% capacity of your co-workers... is that way above expectation or as expected?

[lifeexplorer]

I guess you didn't read my post. :-)

There are two kinds of "raise" if you will: one for mediocre and the other for the top performers. Most people here are talking about "standard" raises/bonus for the mediocre.

You need to be the top performer. Performing 100% of your coworkers means two things: jack and sqat if your work is not in line with the management.

I often use a term "business alignment", meaning you need to align yourself constantly with your boss, who is the representative of the business. How? By asking. Simply schedule a weekly or biweekly meeting with him/her to check whether or not what you are working on is what he/she wants, and if your boss has any feedback, good and bad.

With that, you can easily gauge yourself and know what to expect. :-)

[Suncc49]

Originally Posted by cromartie

Thanks for the insight. More info, I took a 50% pay cut to take this job ... hope it wasn't a mistake. Job is a small company, less than 15 employees and sells goods to the construction industry.

Financially I can't wait another year to ask for a raise, so that's out.

And if companies only gave 3% raises annually, you would never break out of entry level and make it to your median salary in your field ... so that can't be right. I can understand 3% raises once you reach your median to keep pace.

Lastly, why would I be told I would be getting a substantial bonus and then get nothing or a turkey? Wouldn't that be one of the quickest ways to get a loyal employee to quickly exit stage right?

That is why you seek out jobs after you get your experience in the field... There are competitors... They will pay you 15-20% more and you will be on the way towards median pay in the field.