Had a millenial turn down a raise today

Gonna have to agree with this. OP, you said you felt a bit slighted. That's the wrong attitude. This has nothing to do with you. I didn't read enough to know if you mentioned the industry you are in or not, but it matters not if his $80,000 salary is a lot where you live. It ONLY matters if it is appropriate for your industry for someone you like as a worker after 9 months in with his skill set. The unemployment rate is at record lows. If he can move to another area of the country with a similar cost of living and make what he's asking for or more, then you and your company have a real decision to make. As you said, it costs money to recruit and train qualified workers. It also takes money to keep them.

I am not just for giving this guy what he wants. Could be he is asking for too much based on market conditions, but you'd better be prepared to show him metrics that show he is asking for too much. The fact that your budget doesn't allow that kind of raise is of no concern of his. You might need to go get more money for your budget...or not. Metrics, dude...give him the metrics. Otherwise, he's finding a new job soon.

We can all do better wrote:

Truth Bomber wrote:

He makes 80k base. Definitely a more than living wage in our area. Average for my area is $47k.

Given those numbers then yea 6% is a bit weak. I've never been a fan of % based raises, I really prefer absolute numbers. Starting at $80k I feel the next natural number would be $90k.

The numbers aren’t as arbitrary as you think. Percentages are more workable because of how inflation, COLA and marginal productivity gains are expressed, which tend toward a range more translatable in percentages than raw dollar figures. They’re also more reliable over time than fixed dollar intervals, which shrink in relative importance with each promotion. More importantly, whether a percentage or a raw dollar figure, they’re both calculable, and most importantly, the raise is a function of marginal output. Does the individual’s marginal productivity warrant the requested promotion? Is there a willing replacement who can match his level of productivity? Promotions of that nature are nowhere near standard in any segment of industry below the managerial, VP or executive ranks. Where they are commonplace, however, the are ordinarily substantiated by commissions, exceptional M&A or bonus deals, or more work responsibility/hours. In select cases, specialists become exceedingly rare, due to intense competition between firms. However, beyond these cases, we probably have a case of an employee who regrets not asking for more at the beginning, who already has another job lined up, or who doesn’t know how to negotiate.

I call BS. How does one "turn down a raise?"

Interesting how 13% jumps 80k to 90k. Wonder if that's why it sticks in his head. Defintely not an arbitrary number.

You did a performance review and determined this employee's worth to your company. The determination was that he had earned a 6% raise. He was expecting more. In fact, more than double at 13%. You have mentioned two things. First, that his review did not warrant a 13% raise and second, that on your budget, you cannot afford a 13% raise. These are two different issues though. If you really liked the guy, wished you could give him a 13% raise, and just can't, that's unfortunate for the company. If he's not worth it anyway, then who cares?

The way I read it right now, and I could be wrong in my interpretation, is that he turned down the raise, but didn't quit. So that means that for now, he is working at a 6% discount. Of course it also means he's looking for another job and probably is not long for the company, but for the time being you can save that 6% and put it toward the cost of training the next employee. It seems weird to me that he would turn down the raise, unless accepting it left him contractually obligated to stay with the company for some length of time. If the best I could get was 6%, I would take that and start sending out resumes anyway.

Depends what the job is and their level of experience combined with their performance. So it could be totally reasonable or not. You’ll have to reveal the type of job if you want any sympathy.

Mama just sought competing offers.

Only matters what others will pay.

ocracoke wrote:

If he was Gen X he would have asked for a 13% decrease. Only the strong survive mofo.

Sadly, this.

Everything that I’ve seen from OP on this thread falls in line with excuses that I’ve heard before.

I’ve heard my underpaying employer say:

“This small percentage increase is higher than most people got this year. You should be happy about it.”

“You make more than the average employee in this area/region.”

“We can’t afford to give everyone a raise like that.”

Yet I asked for more in a situation like this, and I got more. Older/more established folks have been using these kinds of excuses to keep wages down as much as they can. That works much better in a recession when employees are wary about finding new jobs, but in a competitive market you better properly evaluate the balance between paying valuable talent a little more and the cost to hire and train someone new. If you can’t retain talent, then there are going to be a lot of new someone’s and your business is not going to operate very efficiently. Figger it out.

What determines whether your employee will stay or go was you initial reaction to their request. You could not pay them any more than the 6% and they will be gone soon. You could pay them more than the 6% but handle the situation poorly, in which case they will also be gone soon. Or you could pay them more than the 6% and make them feel like they are a valued member of your team, in which case you have a chance at retaining them.

They aren’t asking you to give everyone a 13% raise (which you don’t have the budget for). They are only asking for themself. Although if they like the people that they work with, then I am sure that they hope you also pay everyone else fair value and treat everyone like they are valued.

The question you need to answer is, “Do I have a problem with turnover?” If the answer is, “no,” then perhaps you can treat everyone as a disposable piece of your puzzle.

Pretty sure this didn't happen.

Based on OP’s age, he probably finished undergrad around 2009 and entered the workforce sometime thereafter. Which means that for OP’s entire career so far, up until maybe 2017-2018, he has observed employers’ hiring practices and talent retention practices that are based on a fearful, major-recession-wary workforce.

Truth Bomber wrote:

just pointing out that your stance is stupid wrote:

only one question:

Are they worth it?

If so, stop complaining and pay them

If not, then don't and let them leave. If they are worth that they will find a company that will pay it.

Why did you turn this into a moral issue?

They aren't worth it and I won't be paying them. Why accept a job that you aren't satisfied with the offered wage and ask for a 13% bump immediately? Just don't accept the job that is clearly beneath your self-worth.

Hiring is expensive. Training is expensive. Had I known he thought he deserved 13% more coming in, I would never have hired him or wasted the time. It's not a moral issue, it's strictly a financial one.

+1.

The theory of free markets is an imperfect theory based on certain assumptions. One of those assumptions is that there are no barriers to entry to markets. Once you go from theory to application, you have to work around some practical realities, like the fact that there are barriers to entry, and those barriers include certain transaction costs like hiring (which may include paying a headhunter to find talent for you) and training. The expectation is that you will have time to recoup the investment made in those things, so having people come and go on a frequent basis results in significant inefficiencies.

Truth Bomber wrote:

Did a performance review today. Gave the guy a 6% raise for solid performance. He had only been working with us for 9 months. He declined and said he felt like he deserved 13% and that was "the number that was sticking out in his head."

If 6% wasn't enough, why even take the job at all at your current salary?

I guess he will soon be on his way out. But when did people start demanding double digit annual raises? I hope the economy crashes soon to bring these kids back to reality.

I would have turned him down immediately. Now, if he had provided concrete reasons why he felt he deserved a higher raise, then maybe I would consider bumping up a couple percentage points if I was able (i.e. within budget and pay range for position). But if his only justification is that 13% was “the number sticking in his head, then no way“. If an employee feels they are worth more money then they need to justify it with examples of their performance that warrant the higher raise. This employee sounds very immature and you may be better off if he does leave for another job. He is also completely detached from reality if he thinks companies are giving out over 10% annual raises. Based on my experience, 3-6% is the norm these days.

ocracoke wrote:

If he was Gen X he would have asked for a 13% decrease. Only the strong survive mofo.

This is the height of ignorance.

To me this is a classic case of millennials not knowing how to negotiate. You say 6 her says 13, he’s waiting for you to turn around and counter offer. If he’s good pay him what he’s worth. Don’t go home butt hurt that this kid isn’t Kissing your ass about a raise.

Kvothe wrote:

Why isn't the raise just automatic? Why was there any discussion over it at all? It seems like a waste of your time and the employees to argue over raises or offer them instead of just apply them automatically to deserving employees. You will have people trying to sell their work as higher quality than it was to you, in fact to avoid dishonesty whoever does performance reviews should have no control over raises.

If there is no discussion over compensation changes then the compensation changes themselves are a waste of company resources. Annual raises of X% become assumed if there is no discussion, just an inflated paycheck hitting an employee's bank account after the first pay period of every fiscal year.

That de-incentivizes hard work because raises are no longer tied to job performance, but to a calendar. It also caps employee's annual salary ceiling, which also de-incentivizes employees.

If my direct reports knew they were going to get an automatic X% raise annually without any discussion about job performance, it would be a nightmare.

Have you ever had a job?

Truth Bomber wrote:

just pointing out that your stance is stupid wrote:

only one question:

Are they worth it?

If so, stop complaining and pay them

If not, then don't and let them leave. If they are worth that they will find a company that will pay it.

Why did you turn this into a moral issue?

They aren't worth it and I won't be paying them. Why accept a job that you aren't satisfied with the offered wage and ask for a 13% bump immediately? Just don't accept the job that is clearly beneath your self-worth.

Hiring is expensive. Training is expensive. Had I known he thought he deserved 13% more coming in, I would never have hired him or wasted the time. It's not a moral issue, it's strictly a financial one.

Interesting. I totally agree. I don’t understand people who stay in jobs for any length of time—but especially years or even decades—when they are constantly disgruntled and sit around trying to make everyone around them equally disgruntled.

At my current job—when I started—there were three people like this. They had been at the job for 36(!) , 26, and 22 years respectively. Once I got to know them ALL they would talk about is how much better everything used to be in the past, how much more money they used to make, how big their bonuses used to be, how cushy the job was in the 80s and 90s, etc, etc. They were extremely negative and poisonous.

Fortunately, two have retired. I think they had to work because—as is typical of their generation—they had both been divorced multiple times. Unfortunately, the third one (an Uber religious, obviously gay-in-denial guy) is still around and just got a leadership position. He will be a disaster.

One point for the olds on this site—if you have the perspective that the younger generation needs to suffer and go through crappy / abusive work situations because you perceive that you did (but probably didn’t, your just a whiny narcissistic a-hole) and you “turned out fine”—you in fact have not turned out fine. Your goal should be to make the world a better place for the next generation, not hope they suffer. As a parent myself, the twisted and bitter world view of the older generation in the US amazes me.

Anyway, given that this clearly conflicted gay Evangelical with a punishment is best mentality has taken over I have decided to take a new position rather than behave like those who came before me and sit around b!tching to the new kids about how much better things were in “the good old days”. I refuse to accept these fools horrid outlook on the future and will not contribute to propagation of that cynical world view.

The good news is most of them will be dead in 10-20 years and we can then really start to fix the messes they made.

The first part (him countering with 13%) is not a bad negotiation strategy. I see that pretty often with my direct reports hoping that I'll counter with the median of my offer and their suggestion.

The second part ("sticking out in my head") is an absolutely horrible negotiation strategy because there is no where to go for either of you. Had the employee had a thoughtful argument ready (i.e., "My division has bucked current trends and increased market share by 5% in the last two quarters, increased revenue by 3%, and cut expenses by 1.75% largely based on strategic initiatives that I implemented 6 months ago....") then there is room to negotiate.

If one of my direct reports asked for a 13% raise when a 6% was offered and then said their suggestion was based on some number in their head, my counter would simply be, "Well the number in my head, as your CFO, is 6%. Since I'm calling the shots here, that is the number we are working with. So unless you have a more compelling reason other than magical numbers floating around in your head, you can take the 6% raise or you can stay at your current salary level. Those are your two options."

This question confuses me because you seem to have direct reports and are in some type of leadership role in your company, yet a question like this would normally come from some 16 year old kid who has no experience in the corporate world.

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