The magic number is 7 percent. The tip is from Jason Shaw, professor of human resources and industrial relations at the University of Minnesota’s Carlson School of Management.
Shaw is a specialist in compensation issues who’s spent more than a decade studying how people react to changes in pay and why. In today’s economy, even employers who haven’t had to cut or freeze pay might be forced to choose between small, across-the-board increases for the many or bigger merit raises for a few star performers. Shaw has found that a bump of at least 7 percent is required before the average recipient perceives it psychologically as a “merit” raise. Keep that in mind when you look at your resources, count your stars, and do the math, he suggests.
Another wrinkle: Older and younger workers perceive merit raises differently. Shaw and two colleagues published findings last year in the Journal of Organizational Behavior showing that merit raises—while they might be appreciated and motivating in other ways—have no significant impact on the “organization-based self-esteem” of younger workers. That is, merit raises don’t change their perceptions of how highly the organization values them or how valuable they actually are.
Older workers do feel more valued and more valuable when they get a merit raise—but only if they perceive the evaluation of “merit” as fair and legitimate.
Shaw says the findings support the hypothesis that older workers seek meaning and validation from their jobs in a way that younger ones don’t. Younger people are in an exploratory phase of life, “a period of domain expansion,” he says. “It’s less important to them to derive meaning from any single domain”—like work. As people age, they seek more meaning in the few domains upon which they still focus, including work.
In other words, a 25-year-old waiter in Los Angeles might be an aspiring actor. A 50-year-old waiter is a waiter—and derives more meaning from being a good one.
It’s easy to see if your industry is in trouble or your company’s struggling. What about signs that you’re on the chopping block for upcoming layoffs? Here are four, courtesy of the staffing gurus at Robert Half International.
1 Your position or department isn’t viewed as a revenue generator.
2 You are no longer included in meetings in which you normally participate.
3 Your workload is lighter than usual; projects you would typically handle are being reassigned to others.
4 Your manager is showing increased interest in the status of your projects and your procedures for doing your work.
Jim Kwapick, senior vice president at the Minneapolis office of Robert Half, says besides taking obvious steps (look for ways to cut costs and be more valuable; update your résumé and increase your networking), it’s okay to ask your boss about your layoff concerns. But stay professional, and realize that that person might not know what’s going to happen or might not be able to tell you.
—Matt Holland
