Computing % increase for 2009

Caroliso

The previous poster anticipated my question about % raises for 2009, but my question is slightly different:

How do you/does your company come up with the overall percentage for raises?

One poster said the raise equaled the change in CPI over the previous 12 months, that's the sort of description I'm looking for. Do folks do the same or something different? Do folks consider a mix of factors, and if so, do you weight them in any particular way?

Thanks, Carol

davids

I'm the poster who said we use the change in CPI over the last 12 months. I thought I would add to my response. Just for context, we are a public sector (City), unionized employer. I'm not sure how March became the magic month, but it has been a long-standing practice to use the change in CPI from March of the prior year to March of the current year as the basis for increases effective July 1. Three of our four union contracts use this formula. However, the union contracts do provide a minimum and maximum, such as the raise will not be less than 2.5% or more than 4.5%. One of the contracts has language that if the CPI exceeds the maximum (4.5%), employees will receive the difference, up to 1%, effective the following January.

For our unrepresented employees, our City Council sets the salary increase. Our policy says the Council will use the change in the March to March CPI as the basis for the increase, but they can set the increase higher or lower depending on the overall financial health of the City. In the few years I have been with the City, the Council once gave unrepresented employees an increase slightly above the CPI. All other increases were equal to the change in CPI.

Caroliso

Hi David,

Thanks, that's very helpful. One question: during the one time the Council gave a slightly higher increase over the CPI, did they give any explanation about how they determined the amount over the CPI?

I had been using October to October change in CPI, but it turned out that perhaps because of seasonal variations October was often a month where there was the least change year to year. So I now do an average of the change over the 12 months.

davids

The reason unrepresented received an increase above the CPI was because one of our bargaining units negotiated an increase 0.3% above the CPI. It happened to be the bargaining unit that had the most issues of salary compression between employees and supervisors. If the supervisors did not get the extra 0.3%, the compression would have worsened.