'Peanut butter' pay raises could cost companies their top performers

This is just what happens when it's an employer's job market. A lot of people got used to good raises when talent was in high demand, but that's not where we are now.

I worked in aerospace in the early '90s. After the Soviet Union fell you were really happy when your raise was large enough to cover inflation.

My prediction is that this strategy will work out better for the companies than the article expects. Why? Because firms are actually often absolutely lousy at recognising which of their employees are high performers in the first place.

Impressive, very nice. Now let's see the c-suite comp packages.

Standard across the board percentage raises have been the case where I work for the last 5 years or so. Nothing for merit. You can get a bump if your job title changes but not simply for good performace.

It doesn't motivate anyone to do anything above and beyond expectations, obviously.

As top talent who received primarily ‘peanut butter’ raises for many years, I never much minded that. No amount of salary would have made me able to afford housing near work in sfbay, and I cared much more that my employer fire the incompetent (which, for a time, they tended to do) than I minded being paid less to work with a better crew. When I decided to leave, I did so because leadership had shifted so much that they had stopped enforcing competence as a matter of policy. Pay was simply not a factor so long as it covered the basics, and I refused to let it be used as a bribe.

I moved to a new city for college. I made a friend, who I considered well-off (he was also a bit heavier). One time I went to his place, and he wanted to have some snack, so he grabbed a jar of Nutella and some sliced bread. On a piece of bread, he put on a layer of Nutella that was not thinly-spread at all, that I thought "Oh, I didn't even consider that it's actually possible to spread a thick layer of Nutella on bread. I guess well-off people are different!"

Meanwhile I'm considered a high performer at my company and I've been pushing for years to get our company to adopt flat percentage raises and flat dollar amount bonuses very literally against my own financial interest.

My company not only gives percentage based bonuses but gives a higher percentage to higher salary earners. It pisses me off every year that the people who would be most positively affected by the extra money get less. But worse with the "performance" based raises where they have a fixed number of annual raise percentages means the unlucky sods who have shitty managers get less than inflation every year while I get higher every year.

The impact for me was I quit and founded a company, got funded. I work with my friends and it's great.

Corpos are very sick right now, friends that stayed behind with +8y xp are very burnt out and annoyed having to deal with barely functional employees for a "peanut butter" raise.

It's a shit economy and job market, what are you going to do with a shit raise, quit? IMO this is all part of the larger trends with layoffs and RTO to head count, especially for the more "costly" ICs.

> “that are even and spread thinly, like peanut butter would be on a sandwich,”

Corporate America apparently can't even make sandwiches correctly.

> There’s always a tension in organizations of how to how to balance the needs of your high performers while taking care of the entire group,”

I don't need you to consider my "needs." Consider your profits then consider my work. Pay me what it's worth.

It's amazing how far companies will go to not pay their best talent appropriately.