how often do most companies give raises?

by Alison Green on September 16, 2013

A reader writes:

I have been reading your blog since I got laid off. However, I have a job now—project manager in a oversea-headquartered international technology company. YAY! Although the salary is way lower than I asked for, I took it because I know I didn’t have relevant experience in this industry or as a project manager. I do want to be paid more (who doesn’t) but it’s definitely not now or in the near future. I enjoy working with my co-workers and the overall environment. It’s very supportive and politics-free. Therefore, money is not too big of a problem to me … but my husband keeps asking me when I can get a raise because “they give you a raise every 6 months!”

The reason my husband said this was because when he worked on a minimum wage job, he got a raise after 6 months and it was 50 cents. He also said that his father was offered a pay raise after 6 months working in a restaurant, which I guess was also a minimum wage job.

I don’t want to sound condescending, but I really want to tell my husband, “I am sorry, but you’ve never been in a corporate job and that’s not how corporates work.” And he denied my opinion because where I am working is a foreign company and that must be the reason.

Is there such a pay raise schedule in corporate America? How can I explain to my husband that you normally need to negotiate and have bargain power to get a raise in my position?

Nope. Lots of companies do raises annually, but plenty of companies don’t even do that. Of the companies that do annual raises, some just do cost-of-living increases (sometimes reserving more for the highest performers, although even those highest performers might need to advocate for it), and others do merit raises (which you may or may not need to negotiate for).

If you’re at a company that doesn’t do annual raises for everyone as a matter of course, then you generally need to present a case for yourself when you think your work merits an increase — pointing to your track record of increased contributions.

As for how you can explain this to your husband … well, if simply explaining it hasn’t worked, I’m as unsure as you are. You can show him this post, or you can send him this on salary negotiation, but I’m not crazy about the fact that you’re feeling like you need to “prove” this to him. Ultimately, you should both trust each other to manage your own careers like the independent adults that you presumably are — which means that he’s welcome to disagree with your take on something like this, but he shouldn’t keep pushing his viewpoint on you after it’s already been discussed.

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{ 72 comments }

{ 72 comments… read them below }

  1. MJ of the West*

    I’m with Alison on this one. In fact, I would think in most corporate jobs, getting a raise in your first 12 – 18 months is fairly unlikely.

  2. Brett*

    I know I am talking about public sector rather than corporate, but our agency eliminated cost of living raises in the 1980s and eliminated merit raises 7 years ago. The only type of raises are one-time across the board raises of 1-4% every few years, and right now the last actual raise was in 2008, we received a 2% this year to make up for the change in social security, and the next raise is scheduled in 2018.

    In terms of real dollars, you pretty much make the most when you are hired and drop almost every year for the rest of your career. If you want a raise, you have to get a new job.

    1. the gold digger*

      I can see ditching the COLA raises, but merit raises? What’s to motivate someone to be more productive and to shine? Some of us work out of the goodness of our hearts, but most of us work for money.

      1. fposte*

        No merit raises in my state university, either. But if what you wanted was to make money, this wouldn’t be where you’d go anyway. Unfortunately, the solid pension that was supposed to compensate is only funded to 45%, so the laugh may be on us.

      2. Sarah*

        I’m going to +1 this just because it came from “the gold digger.”

        The thing about the public sector (and nonprofit sector) – people like to think you do work out of the goodness of your heart. Or they think you don’t do work that deserves to be paid fairly. For example, who wants to think their donation goes to pay for a pricey major gifts officer? But the fact is that it takes money to make/raise money. See this: http://overheadmyth.com/

        Note: The Overhead Myth is led by 3 organizations that for years (!) told donors that the best organizations have the lowest overhead, which has caused nonprofits to fudge their numbers to have low overhead…but that’s a different post.

        1. Xay*

          I encountered the same thinking when I worked in state government. I received one COLA raise in 6 years and no merit raises because strangely only the people in the Surgeon General and Deputy Director’s offices were deserving of them.

          But why worry about keeping the lights on when my love of serving the people of my state would light my way? I didn’t get into public service to get rich, but living paycheck to paycheck in a position that required a graduate education and 5 years of experience while watching appointees get low six figures, pass down another reorganization and then move on to a larger private sector salary within a couple of years didn’t work for me either. I miss my old job everyday because I did love the work, but I don’t miss counting pennies.

          1. TK*

            I work in state government in a very fiscally conservative state; there is no such thing as a COLA here and I’m not sure if there ever has been. I’ve only been here a year, but my understanding is there have been no raises at least since before the recession and only 4 or so in the last 20 years. We do have great benefits, but there are always rumors about those going away too.

            And of course salary negotiation is a completely foreign concept; every job has a classification and a salary and that’s what you make, no if’s, and’s or but’s.

            1. LD*

              And my spouse worked for a state government that could not keep employees in some of the lower paying jobs because the cost of their benefits was too high. They were actually losing money in some situations. Thanks state legislators…who get to make the rules, set the salaries, and accept coffee, lunch, dinner, and trips from lobbyists, but made it an ethics violation and termination offense for any other state employee to accept anything, even a cup coffee.

      3. Kimberlee, Esq.*

        To be fair, most studies show that money isn’t a primary motivator for action, in practice, and that being given important work and having autonomy is what leads to actual productivity gains.

        Not that many companies do a good job with that either. :)

      4. Anonymous*

        Because you don’t want your tax dollars to go to people who shine or are productive? Because it is extremely politically difficult to pass a law that says that you will pay public employees.

      5. Anonymous*

        Some people work and do a good job so they don’t get replaced. If you don’t like your job, quit but don’t slack off until your fired because you have no motivation without a raise coming. Silly person.

  3. Katie the Fed*

    and sometimes you get to be a political pawn and get your pay frozen for 3 years while facing furloughs :/

    2. SAF*

      My husband is a fed, as is my best friend, his best friend, and indeed, more than half of our friends (I am not. I am an unemployed nonprofit PM.)

      It’s been a rough few years, hasn’t it?

  4. ThatGirl*

    My husband used to work in a small family owned business and he didn’t get a raise for about 5 or 6 years. He found another position and has been very diligent in making sure he gets due compensation. If they can’t offer him a raise (another small family owned business) he negotiates for more vacation or sick time in lieu of a raise.

  5. LisaD*

    I wonder why OP’s hubby is SO anxious for her to get a raise? Seems like grounds for a serious conversation — are the couple’s finances in worse shape than she realizes? Is the husband’s job in danger? Asking once might read as encouraging his spouse to negotiate for what she’s worth, if he thinks the initial offer was really way below par, but why bring it up repeatedly to the point where it becomes a bone of contention in the marriage? Seems to me OP needs to sit down and figure out what’s really behind his push for her to earn more.

    1. the OP*

      He’s in the military so his job is stable, but that reinforced his idea that a promotion comes every few months since that’s how it works for him now. We are making about the same amount of money and the finance is good now. He’s not really anxious but rather, he believes that’s how it works so he was making sure I get the raise in time. :( No fuss talking with him again now because I have all the insights here! Thanks for your comment!

      1. Elaine*

        Wow, my military husband only got a service increase every year (of a few %s, maybe), and then a bit more with a promotion to a higher rank. Now that he’s a civilian, he’s making much less and I’m the one badgering him to ask when he might qualify for a merit increase. Now I’ll stop! :)

  6. AdAgencyChick*

    A raise every six months? I’ve never worked anywhere like that, even back when I was in high school and college and working minimum wage/retail.

    These days I’m used to seeing a couple of percent annually, if that, and 8% to 10% with a promotion.

    1. The Other Dawn*

      I worked somewhere like that. It was at a grocery store when I was a teenager. It was union and the union gave raises every six months without exception for a period of three years. Then it was annually.

    2. Ellie H.*

      I don’t remember if it was every six months but I think I got a $0.25 raise periodically, working in a retail union job.

  7. Brooke*

    The companies I’ve worked for had a company-wide annual review cycle. Raises (typically 2.5-3.0%, though high performers could sometimes get more) were generally awarded then. The raise amount was usually determined before the review conversation occurred, so to “negotiate” for a better raise, you really needed to rely on your hopefully exemplary track record of high performance, ideally bolstered by regular communication with your manager about how you’re doing and where you’re going in the future. One-time raises outside of the normal review cycle were only given in rare circumstances (I.e. a mid-year promotion or completion of a huge project).

    3. Elaine*

      My experience as well. 3% is standard annual increase, but when I recently took on some additional duties I negotiated 7% (I had to practice the conversation with our in-company personal conflict coach–and read the blog articles by Alison!).

    4. jdizo*

      I’ve never worked in a company like that where raises are guaranteed… Must be nice. I work in Media… The only way I’ve ever got a raise is by changing jobs. If you ask for a raise…they might try to find somebody to replace you. it’s a cut throat industry.

  8. The IT Manager*

    Got to go with, in this case your husband is wrong. There no law that says raised must occur every 6 months, every year, or ever. I agreee with MJ of the West that as a new employee you may not get one for your first year or so especially in jobs where it takes you that long to learn the ropes so you’re not really proving demonstrating your value yet.

    That said if your company doesn’t discuss raises at a particular time if you want a raise, you will have to take the initiative and ask about it, but six months is probably too early for that.

    1. the OP*

      That’s exactly what I thought. In 6 months, I’d be happy if I can learn everything needed for this job/handle a project all by myself etc. Right now I am not sure what they offer me is their normal rate, or if it’s lower since they brought me in with no experience. I should find out after a year! Thanks for your comment!

  9. Yup*

    In the US corporate environment, each business sets its own pay/benefits internally and often structure it in different ways. Some might give raises that increase the amount of each paycheck, others might give bonuses that are one-time lump sum amounts, or even (for tech companies like yours) stock option awards that have all kinds of rules and restrictions.

    Sometimes raises are mentioned in the employee manual. If your company has one, check the ‘compensation’ or ‘performance’ sections to see whether it describes anything about how/when raises are determined. (It might not say anything, but you never know.)

    I’m not sure how to explain this to your husband, other than to remind him that you’re the person working there so you have the first-hand knowledge of how the company operates. In my jobs, raises have always been discussed on an annual basis (not six months), and I’ve never worked anywhere that rolled them out automatically.

    1. the OP*

      Ah ha! I’ll look for the manual then! I was a little annoyed when I told him that’s not how it works. However, I was also wondering to myself—does it really happen in some companies?! After reading all the comments, it seems like some companies have discussions on this annually. I didn’t know that before. I thought you always have to negotiate your own raise when you think the time is right. Anyways, what I need to do now is focus on the new job and learn as fast/much as possible. :) Thank you for your comment!

      1. Jazzy Red*

        It would be a good idea for you to keep track of what you learn, and how you progress in your job responsibilities. Sometimes managers forget what you did 6 months ago, and you need to show why you deserve (as in, have earned) a raise.

  10. Z*

    I agree with Alison that people in corporate environments can’t expect a raise every six months. However, I disagree with the idea that spouses should expect each other “to manage your own careers like the independent adults you presumably are.” Most married couples share (at least a large portion of) their incomes, and to a certain extent, a reason for getting married is that you’ve found someone you can *depend* on. (Not be co-dependent on, but dependent.) Thus, I don’t think it makes sense to refer to married people as “independent adults” in relation to each other. (Sure, you’re an independent adult in terms of your relationships to your parents, siblings, co-workers, etc., but to a certain extent, a marriage is an agreement not to act independently.)
    That said, given that it sounds like the OP’s husband might be unemployed at the moment (if I’m reading it correctly and the minimum-wage job he’s referring to is the only job he’s ever had), in which case, I think it makes more sense for the OP to be asking her husband when he’s going to start earning more (any) money, not the other way around.

    1. some1*

      I think AAM is saying that the LW needs to handle her own salary negotiations, not that her husband should have no vested interest in her income.

      The LW would look foolish if she went to her boss and said, “I’d like a raise because my husband (or mom, best friend, etc.) says that companies always give raises after 6 months.”

      1. Ask a Manager* Post author

        I wasn’t assuming she’d cite her husband as part of her negotiations, but I do think that the husband needs to trust her to manage her own career. He can give input and advice, of course, but once she says she disagrees, he needs to back off.

        If he has a problem with how she manages her career, that’s a bigger conversation, but the way to handle it would be to discuss those bigger issues, not to keep pushing her on this one detail.

          1. the OP*

            Thank you Alison for posting! To Z: My husband is in the military now (I left that part out because I am afraid he’ll see this somehow, so I didn’t want to make it obvious lol). But yes, the other jobs he had before military were minimum wage. In the military, you can pick up every few months as long as you don’t make any big mistakes. Therefore, that might give him the idea that you can be promoted every few months. He kept asking because he genuinely thinks that’s how it works. Now that I have seen everyone’s comments, I can explain to him better.

            1. Z*

              Ah, that helps! Thanks for the explanation. (And I’m sorry if I drove you to expose something you didn’t want to.)

  11. Sarah*

    My organization has an employee handbook (although old and probably outdated), but it lays out that performance reviews will be once a year and any raises will be merit and based on budget. I haven’t been here long enough to know if they typically give annual raises, but at least it’s outlined and given to me as a new employee.

    1. Rebecca*

      Our employee manual says this too. But we’ve had no performance reviews for 4 years now. Raises are based on merit, based on performance reviews. So, in my case, no raises are forthcoming. No cost of living, no merit increases, no additional comp time.

      It’s not surprising that many of us are actively job hunting.

  12. NylaW*

    I agree with basically every poster here. My company does annual performance reviews that coincide with our annual COLA. Higher performers can either receive a bonus or a merit increase tacked on to their COLA, which usually amounts to about 2-3% overall increase in pay. There’s some degree of bargaining, but mostly it’s done by your level of performance. New hires are prorated to their hire date so they get only a portion of the COLA and if they are exceptional they may get a little more. Anyone who transfers positions within the company who would receive a merit increase on top of their COLA has it figured into their new pay rate when they transfer. But nothing is guaranteed. We’ve had less than great financial years in recent history where we froze all pay raises. It had the effect of making a lot of us grateful that we work for a company that even gives a COLA and offers the chance for bonuses.

    My brother who works “minimum” wage at a grocery store used to get raises every 6 months, but that was because of a union contract. You got a raise every 6 months, unless you were a poor performer, and then after 3 years you didn’t get anything unless it was a COLA or you changed jobs.

  13. Joey*

    Used to do annual COLA’s, but won’t anymore. I hate giving raises to poor performers and there are too many that because of the way the calendar fell got a COLA when they were being managed out. Just doing annual merit raises with a market study every 3-4 years to adjust for market. Finally got merit raises above the line so to speak- a mandatory part of the actual budget and not an afterthought.

    1. John*

      Joey first and foremost, thank you for being a jobs producer. Those are far in short supply these days. That being said only giving raises every 4 years without a COLA? Your employees will have lost atleast 10% of their pay check to inflation before then assuming an annual rate of 2.5% inflation. I don’t know how much you’re paying your people, but it’s tough out there right now. I always give COLAs + annual review with a justifiable merit raise. I don’t view COLAs as raises and it keeps them happy and where they are at. It’s nice knowing they won’t feel as much of a pit of dispear in their stomach when their light bill or rent increases 10% that year. It also is great for turnover and productivity. As for any non performers, dead wieght, or slackers they are gone fast without recourse.

  14. Anonymous*

    I assume COLA means “Cost of Living [something that means “increase” but starts with an “A”].” What does the “A” stand for?

    1. The IT Manager*

      According to the SSA it is “adjustment”.

      According to the DoD it is “allowance”, which is what I always thought it was.

      1. Cat*

        I think that might actually be two different things. My understanding is that a “cost of living adjustment” means adjusting someone’s salary each year to make it steady with cost of living increases. A “cost of living allowance,” on the other hand, would be a salary adjustment for someone who was stationed or employed in a higher cost-of-living area. So federal government salaries are higher in San Francisco than in Phoenix because of a cost of living allowance.

        1. LD*

          This. Allowance vs. Adjustment…I worked for a large corporation that offered COLA (“A” for allowance) in areas where the cost of living was significantly higher. Think about the difference for living in rural Missouri or Texas vs. New York or Hawaii. So the salaries were adjusted for people moving to or hired in those and similar locations vs. lower cost locations.

      3. Chinook*

        With the Canadian military, the “a” in COLA was an allowance that they gave if you were posted to one of the more remote and, thus, expensive places to live (think Cold Lake, Alberta which is 3 hours straigth north of the closest city and has nothing but bush and farmland in between). That was recently taken away for budget reasons.

        When it came to my salaries, it always refered to “adjustment” and was often the only way to get a pay raise.

    1. Jazzy Red*

      Yes. There’s a formula that they use to determine the percentage everyone would get.

      The only COLA we have at my work is in the soda machine.

  16. UK HR Bod*

    It may depend where this company is headquartered. It’s more usual in the UK for companies to review salaries every year -sometimes this is performance based (my personal preference), sometimes this is an across the board increase (my current workplace!). When it’s across the board it’s usually related to increases in cost of living, although for most places it hasn’t kept pace – recent news stories suggest that for lower paid especially pay is the same now as 2004 in real terms. If there is a yearly review it’s usually in the contract (although noting that a review doesn’t mean a raise!) or in the manual tied to performance management / appraisals.

    1. the OP*

      It’s based in Hong Kong. We are more like a sales office in the US, and everyone is this office has certain percentage of commission. I have yet to hear about annual review for our office, but whether or not a raise can be given will definitely be tied to the overall sales revenue. Thanks for your comment!

  17. S from CO*

    I worked for a government contractor for 5 years and my employment ended in 2012. At this company employees were eligible for pay increases on an annual bases based on performance and budget (I was told by the manager that the budget was different for each office). I was an entry level employee and the lowest paid of the group so I got a pay increase every year (I worked very hard at this job and it was not easy). One of my coworkers (different job/title) who had worked there for 10 years had not received a pay increase for 5 years. She was told that she would have to change jobs to get an increase in pay! She was NOT a happy person especially when it got to be time for pay increases. I can’t say that I blamed her for being unhappy!

    1. Anon for this reply*

      The federal contractor I work for does something similar (unofficially, of course). I have more flexibility for raises because I came in at the middle of the pay range that they generally bid for my position. My co-worker who made significantly more than I did (for good reason – more experience, more degrees) was told that they couldn’t give her as much in raises because it would price her out of the market for contracts. On paper, our raises are based on performance.

      Our bonuses, however, are based on how many contracts we help the company win (usually by researching or writing the proposal.)

  18. shawn*

    My company does annual performance reviews at the end of the calendar year and awards merit pay increases and promotions based on those results. The increases range from about 0% to 6% with an average affect on payroll of about 3%. These aren’t exactly negotiated for, but supervisors are given the opportunity to advocate for the increases given to their staff. We do not do COLAs, but do adjust salary ranges every few years as needed. Salary changes and promotions can also happen mid-year, but that conversation would need to be initiated by the supervisor. Most changes happen at the end of the year.

  19. Amber*

    The company that my dad works at hasn’t given anyone a raise since the economy tanked, back in 2008. That was five years ago now. My mom works in the public sector, though, and she’s been getting raises still.

  20. Anonymous*

    OP: I have worked in US compensation for my entire twenty-five year career, and you can assure your husband most accurately that the overwhelming majority of US companies who offer salary increases, offer them at no less than one-year intervals.

    Now, as to why he won’t believe you, or what he expects you to do if the above statement weren’t accurate (call your HR and tell them that they MUST give you a raise at six months?)…those answers aren’t in my WorldatWork data.

    1. the OP*

      Thank you for your insight! That’s what I believe. Now that I have all the comments for reference here, I can be sure I am not just speaking from a hunch.

  21. Forrest*

    I think its kind of odd that the LW is being careful and mindful of the husband’s feelings and opinions and yet he’s quick to dismiss the LW’s opinions.

    LW, I don’t think there’s any negative about your husband but you may want to approach it like that. “Hubby, why are you so quick to dismiss my opinion and yet enforce yours?”

    1. A Teacher*

      Yeah I kind of agree, especially the comment about him not wanting to see this. I don’t know why it matters if he sees that you posted the question–because he’s wrong? I can’t fathom why that would be a huge issue, at least for most people.

      Anyway, to each their own but I’m having a hard time figuring out why you almost put yourself down and defer to his feelings but that’s just me–and maybe I’m reading too much into it.

  22. EE*

    I can sympathise with the husband aspect of this. My husband is a civil servant with lots of guarantees built into his role and will often suggest that I resolve minor issues at work by being extremely straightforward and aggressive and talking about my rights – not appropriate in the corporate world where progression is often based on intangibles!

  23. WWWONKA*

    The company I used to work for switched the non exempt from a yearly raise to a yearly bonus if they hit the prescribed milestones. Didn’t go over to well. I as an exempt manager received raises and bonuses still. The company I interviewed at today hasn’t given raises in 2 years but also switched to a yearly bonus plan.

  24. Jazzy Red*

    This one made me laugh. The husband is out of touch with the way things really are.

    A long long time ago, in a galaxy far far away (the industrialized Midwest) people working in unionized factories (and the offices) got raises on a regular schedule. Some were every 6 months, some were every year. Then came NAFTA and jobs started to be sent overseas. Then, later, the economy really tanked and companies were going out of business left and right. Many companies are still in financial difficulty and some (like mine) have cut a lot of fringe benefits and wages. My company hasn’t given raises in two years; however, the layoffs have stopped, at least for the time being.

    I’m still just thankful to have a steady job.

  25. Ed*

    My company exceeded our yearly profit goals and they still decided nobody gets a raise. I think companies have decided to stick it to the workers for a few more years to make back what they lost during the recession (while the workers will never make it back and even fall further behind due to no raises).

    1. Original Dan*

      Yup.

      My company suspends raises when times are bad. But they fail to augment raises when times are good.

      Greedy bastards! >:-|

  26. Sarah A.*

    My horrible employer claims you’ll get a review and a raise (if merited) once a year. Unfortunately when I bring this up he goes nuts and threatens to cut my pay/hours. I’m looking for another job. I’m tired of crazy bosses. They make the money to offer raises but refuse to do so and surprise surprise employees leave and they can’t figure out why!

    Is it any wonder then that graduates today are more likely to job hop because cheap old people refuse to pay what they are worth especially when they think dumping two jobs for less than the price of one as being “reasonable” on a young employee?

    I have student loans on top of bills to pay. Screw greedy employers who think I should be happy to work for less than half the going rate!

  27. anita jayohbee*

    I have worked for a major media corporation for over 6 years and have never been given a raise. Nothing. When you ask inept management says corporate doesn’t repsond.

  28. anita jayohbee*

    My corporation is based in Atlanta and they are clueless and heartless. But as long as they make thier millions right? A pox on all their houses….

  29. New job offer*

    I got a job offer from another department at the same company. My husband INSISTS that I only sign the offer if there is a written agreement that in 6 months I will get an 8% raise and in 1 year I will get another 8%. I am already going to get a better salary than my current job just by taking the offer and I am happy about that. I think he is nuts about this quaranteed raise idea. Is it even possible to negotiate a future raise before you even have the current job??

  30. narender*

    working in a company last 20 years but no suitable increased in my salary, kindly suggest me what i do?

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