Cost of Living Increases

BG in AL · December 2007

Hello - I am Becky G. from Birmingham, AL. We have to implement an across the board raise percentage of 3% for 2008. Anyone that we believe deserves merit increases above this percentage must be approved by our corporate office. Also, If we want someone to go above this amount, someone else has to take a lower increase. Was wondering if anyone has a higher cost of living increase that you are using. This does not seem adequate, as it doesn't really even cover the increased gas prices. Any input would be appreciated, even if your company is going with about the same percentages. I am just trying to understand.

NaeNae55 · December 2007

We never give 'cost of living' increases. The idea is that raises are not an entitlement (employees come to expect them even if your company is doing poorly financially), but something to be deserved. All of our increases are merit increases. This year we budgeted 3% which pretty much everyone got. However, if a manager wanted to give someone more, they would have been forced to give someone less to remain budget neutral.

My hubby works for the state. They only give COL increases, but they average 1 to 1-1/2%. They just go through about every 5-7 years and do market adjustments.

Good luck!

Nae

cnghr · December 2007

We cut out cost of living increases about ten years ago and all of our increases are merit increases, generally capped at 3%. Athough if a manager wants to give someone a higher increase in our case they aren't under the constraint to remain budget neutral so they don't have to give someone else less.

stilldazed · December 2007

We don't give cost of living raises, so can't help you there. The closest equivalent I would have to turn to would be state minimum wage in Florida. From 1/1/07 to 1/1/08, it has increased 1.79%, also not 3% and even further from enough to cover increases in gas prices.

Susan in La · January 2008

We are state employees and are eligible for an annual 4% merit increase. Either you get 4% or you get nothing. Most get the 4%, but poor performers can be denied the merit increase.

ACU Frank · January 2008

I agree with the earlier sentiments linking COLAs with entitlement thinking. Use of the term "merit increase" reinforces the notion that the raise has been earned. The key is to make sure you're willing to give poor performers the raise they deserve, as well.

cnghr · January 2008

That's been a bit of an ongoing issue for us, since we dropped the COLA increases. Even though we call all the increases given during our semi-annual salary review periods "merit increases", that begins to be thought of as an entitlement also. I think a lot of our employees assume that they're going to get an increase every year just because they've continued to show up, regardless of how they've performed, and unfortunately some of our managers reinforce that.

We re-did our salary structure a year ago and I've been working really hard since then to drag people back to thinking more carefully about what they give as "merit" increases and whether or not they are truly earned. So far it seems to be working, but of course like anything else that HR does, it will have to be constantly reinforced or they'll begin to drift back into their old habits!

allsteaks · January 2008

One of the problems we have had is dealing with a 3 or 3.5% increase in salary budget limits the amount of discretion, i.e. merit, for managers to distribute. A normal merit system encourages rewarding high performers but does little to provide recognition for the dependable, steady performers most businesses cannot do without. A previous employer had a very good system that accounted for current percentage of midpoint, promotability, performance and budget, and allowed more discretion upward to recognize exceptional performance. We have a centralized system that doesn't allow that flexibility.

Dutch2 · January 2008

Same here, no COLA increases. All are based soley on merit. We have used a maximum of 3% for several years now and it looks like 2008 will remain the same. Suggest that you do a bit of local or regional research in order to better defend an increase in excess of 3%.

ACU Frank · January 2008

Dutch! If we ever open a branch in Callaway County, I know where I'm going to get my staff...

Dutch2 · January 2008

Actually... it is referred to as the "Kingdom of Callaway".
Among the county's interesting tales is the story of the Civil War battle that wasn't - which is also the story of the region's "Kingdom of Callaway" moniker. In October 1861, a force of several hundred Union troops under General John B. Henderson moved west through neighboring Montgomery County and advanced on Callaway. Colonel Jefferson F. Jones, who lived in eastern Callaway County, heard of the Union advance and quickly mustered his own "army" to defend the county. Most of the county's able-bodied men were already away at war; the county's soldiers were represented in both the Union and the Confederacy. Colonel Jones' "army" was composed largely of determined old men and boys, ill-armed and ill-equipped for battle. As the Callaway troops marched east to meet the Union forces, they dragged along with them wooden logs shaped and painted to resemble artillery pieces. They deployed these "cannons" along the county line and built extra campfires to make the Union general think his opposition was stronger than it really was. In the end, the ruse worked - not a single shot was fired. The bamboozled Union general spent several days negotiating with Colonel Jones and finally signed a treaty with the determined Callaway officer! Henderson agreed that the United States of America would not invade Callaway County as long as Colonel Jones did not invade the United States. Elated from the successful defense, citizens proclaimed their county "The Kingdom of Callaway," and the name still remains today.

ACU Frank · January 2008

I've spent waaay too much time there, and all I've met from your kingdom are your court jesters and some trolls who should find a new bridge to live under.

Dutch2 · January 2008

The best thing is that it is not my kingdom. In order to be considered one of the "locals" you must be born here. I have lived here for almost 10 years now. Come to think of it, this is the longest I have every lived in one place. I believe I may know many of the very court jesters and trolls that you speak of... gotta ask; when were you in this neck of the woods?

ACU Frank · January 2008

The company I used to work for (as "WOCO Frank") owned the FastLane c-stores there. Two in Fulton, two in Kingdom City. The Kingdom of Callaway is where I interviewed the dumbest job applicant I've ever met.

We gave her a 6th-grade level math test, and she missed 20 out of 20. She complained because we didn't let her use a calculator. Just for fun, I let her retake it with a calculator. She missed 20 again. When I looked at her application, I noticed that this applicant - born and raised in Fulton - spelled it "Fulltin". Not just once, but numerous times. According to her application, she was even a graduate of "Fulltin High School".

I hear she is now working for a community bank there.

Cost of Living Increases

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