What's Behind My Measly Raise?

Before you get insulted by that 3%, bear in mind it's a pretty standard amount these days and try to find out what everyone else in your department got

by Liz Ryan

Dear Liz,

Thanks,
Kaylyn

Dear Kaylyn,

Three percent is not far off the average mark for pay increases in the U.S. It is normal to feel bruised when you were expecting a bigger bump. But why you were expecting a bigger increase—was it something your boss said? Even if he or she led you to expect a bigger raise, there's still a lot left to learn about the situation. Here's are some suggestions:

Get more information. Ask for a brief meeting with your manager, and tell her, "I'm trying to integrate my performance review and my 3% increase into the larger picture. Could I ask you a few questions, to help me understand?" Those questions might be:

• What was the average raise in our department?

• What does "good" mean in the scheme of things? Is it the highest possible rating or the second-best or the third?

• What might I have done better during the year? Where can I improve my performance next year?

How Do You Stack Up?

Also, check your salary level externally. If your salary is already well under the market, a 3% increase could put you further behind. But if you're well paid compared to your peers in other companies, 3% may be the company's way of adjusting its salary levels to keep pace with (and not to exceed) the rest of the pack. Use a tool such as PayScale.com to see how you fare alongside folks who perform your job in other companies. What you find may make you feel better about your modest pay increase—or get you working on your résumé.

Finally, take the long view. I don't know a single working person who wouldn't be delighted to see a 10% or 12% increase in his paycheck, but that's not going to happen for most of us this year. Does the job otherwise work for you—in terms of intellectual stimulation, strong leadership, great team members, an uplifting environment, and good preparation for the rest of your career? If the small raise isn't a personal message to you—and there's a really good chance it's not—then you might think of it more like an unexpected 2% increase in your expenses. Not fun, but not impossible to deal with, either.

A good job has a higher value than just the monetary one. Your disappointing 3% increase will be a nearly invisible speck on your career history 10 years from now. Be sure, as you think about your disappointment over this year's review and your feelings about this job, not to miss the forest for the trees.

Cheers,
Liz

Liz Ryan writes her "Career Insight" column and answers readers' questions every week at businessweek.com/managing. She is an expert on the new-millennium workplace and a former Fortune 500 HR executive.