pay raise http://www.wisebread.com/taxonomy/term/9537/all en-US 5 Downsides to a Bigger Paycheck http://www.wisebread.com/5-downsides-to-a-bigger-paycheck <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-downsides-to-a-bigger-paycheck" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-600673276_0.jpg" alt="downsides to a bigger paycheck" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Can earning more money ever be a bad thing? If you were to walk into work tomorrow and were told you had received a 25 percent pay increase, you'd be pretty pleased, right? Most of us would be overjoyed, and would immediately start thinking about how the extra money could improve our lives. However, it's definitely worth considering the downsides to a bigger paycheck. Be prepared, or the pay raise could cost you.</p> <h2>1. You start to depend on that big salary</h2> <p>It's a fact that almost all of us fit our lifestyles to our earnings. The more we earn, the more we spend. We upgrade to bigger cars, bigger houses, and commit to larger purchases. We take on more debt, knowing we'll easily pay it off.</p> <p>But what happens if that big paycheck goes away? Layoffs are a part of life, and they happen in almost every industry. What will happen if that money you have come to rely on suddenly goes away? Do you have savings in place to cover yourself for an emergency? You could find yourself having to downsize your whole life because the money you made is simply not available any more. So even if you do get a raise, your best bet is to continue living like you haven't, and socking the rest away, if you can. (See also: <a href="http://www.wisebread.com/you-got-a-raise-now-what?ref=seealso" target="_blank">You Got a Raise! Now What?</a>)</p> <h2>2. With more money comes more responsibility</h2> <p>Most companies will expect something in return for the extra money they have just given you. Yes, you have earned it. Yes, you were probably working above and beyond your current salary to get the raise. But that's the rub. Now you have to work above and beyond the new salary to keep management impressed. After all, if you continue to do what you had done before the raise, it will seem like you're coasting. Or worse, that you're ungrateful for the new salary.</p> <p>Some people find that with the new responsibilities and expectations, plus longer hours, they have actually received a pay cut. For example, 40 hours per week for $2,000 becomes 50 hours per week for $2,300. Yes, it's more money. But the hourly rate has gone from $50 down to $46. These people may actually have been better off without the raise. More money, yes. But at what cost?</p> <h2>3. You're now in the firing line</h2> <p>Make no mistake, when it's time for a company to examine its payroll and look at cost-cutting, the larger salaries come under greater scrutiny. In fact, some companies actually have a threshold, and once you are above it, you are instantly put into consideration for a layoff when the time comes to make cuts.</p> <p>Of course, if you are simply going from $20,000 a year to $25,000 a year, you most likely don't have to worry. But if you get launched from $50,000 a year to $80,000 a year, or thrown into a six-figure salary, you suddenly represent a more significant figure on the balance sheet. Is there anything you can do about this? Make yourself worth it to the company. Sure, you may earn $120,000 a year; but you saved the company twice that in the last six months. Without you, they'd be missing out.</p> <h2>4. You can lose certain benefits and tax advantages</h2> <p>First, don't let anyone tell you that getting a raise could mean you actually take home less money due to the tax brackets. Only the portion of your salary over a certain amount would be taxed at that higher rate.</p> <p>However, you can lose out on certain benefits and tax breaks by earning more money. If you qualified for an apartment based on low income, and then get a raise, you may no longer be eligible to live there. Child tax credits are phased out above specific incomes, and every $1,000 over that threshold <a href="https://turbotax.intuit.com/tax-tools/tax-tips/Family/7-Requirements-for-the-Child-Tax-Credit/INF15610.html" target="_blank">reduces the credit by $50</a>. Education credits and the Earned Income Credit are also means tested, as well as many other benefits. And your ability to contribute to a tax-preferred Roth IRA retirement account diminishes and is eventually eliminated after you make a certain income.</p> <p>It's possible that your pay raise could kick you off the programs you rely upon. Of course, you shouldn't let that stop you from celebrating your own success at work, but just be mindful of your budget.</p> <h2>5. Expect jealousy from some people</h2> <p>With a pay raise comes the chance to buy the things you have been dreaming of. You may upgrade your car, your home, your wardrobe, or your vacation destinations. And some people will take notice of that. Expect snarky remarks like, &quot;Must be nice&quot; and &quot;Wish I could afford to eat out like that.&quot; <a href="http://www.wisebread.com/how-to-rise-above-financial-jealousy" target="_blank">This is jealousy</a>, pure and simple.</p> <p>Anyone who really cares for you will be happy that you have been rewarded for your years of hard work. But if you have a friend or relative who is genuinely upset by your good fortune, perhaps because they can no longer afford to eat where you eat, or take joint vacations, remind them that life is a marathon, and we all run at our own pace. Assure them that their time will definitely come, and point out that you have had to make several sacrifices to get the additional income.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-downsides-to-a-bigger-paycheck&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Downsides%2520to%2520a%2520Bigger%2520Paycheck.jpg&amp;description=Why%20Earning%20More%20Isnt%20Always%20Better"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Downsides%20to%20a%20Bigger%20Paycheck.jpg" alt="5 Downsides to a Bigger Paycheck" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/5-downsides-to-a-bigger-paycheck">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-you-should-never-do-after-getting-a-raise">10 Things You Should Never Do After Getting a Raise</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-earn-more-money-without-working-more-hours">6 Ways to Earn More Money — Without Working More Hours</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-got-a-raise-now-what">You Got a Raise! Now What?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/didnt-get-the-raise-ask-for-this-instead">Didn&#039;t Get the Raise? Ask for This, Instead</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-simple-steps-to-discovering-your-true-salary-potential">6 Simple Steps to Discovering Your True Salary Potential</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income Extra Income career tips income make more money pay raise paycheck raise wage increase Fri, 07 Jul 2017 09:01:05 +0000 Paul Michael 1979455 at http://www.wisebread.com 6 Ways to Earn More Money — Without Working More Hours http://www.wisebread.com/6-ways-to-earn-more-money-without-working-more-hours <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-earn-more-money-without-working-more-hours" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-491697654.jpg" alt="Woman learning ways to earn more money without working more" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>If you're tired of a job that doesn't pay enough, it may be time for a change. The good news is, that doesn't necessarily mean you have to work endless hours. Here's how to flip your work-to-earnings ratio.</p> <h2>1. Take less desirable shifts</h2> <p>Some jobs offer financial incentives either for working overtime or for working undesirable shifts, such as overnights, or during weekends or holidays. Shift differentials are particularly common in manufacturing, customer service, information technology, and health care. Sometimes you can earn time-and-a-half (1.5x your base pay) for signing up for these shifts.</p> <p>You'll be doing the same work as always, but earning something extra for your trouble. Conversely, if you're looking to work fewer hours in the future, some jobs will allow you to bank the overtime hours you put in. Ask your boss about these options.</p> <h2>2. Set up passive revenue streams</h2> <p>For those who have online content businesses, setting up a passive revenue stream is an excellent way to earn more without putting in endless work hours. A passive revenue stream will require some setup work, but then it has the potential to continue earning for you without continued maintenance. (See also: <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job?ref=seealso" target="_blank">15 Ways to Make Money Outside Your Day Job</a>)</p> <p>For example, you may have a blog that's gained a nice following. You can <a href="http://www.wisebread.com/can-you-really-make-money-by-starting-a-blog?ref=internal" target="_blank">earn money on the blog</a> by selling advertising or creating links for affiliate marketing, which can easily be set up with online retailers such as Amazon. <a href="http://patflynn.com/" target="_blank">Pat Flynn</a> is at the forefront of this movement. His model mostly involves creating websites with valuable content, such as a niche e-books, podcasts, or online training courses.</p> <p>The key to earning money is generating traffic, which is why it's critical to select the right content niche using keyword research. Once you've created the content, you'll need to market it to your audience via social media or email lists.</p> <p>If you've got a popular YouTube channel, it can also generate a passive revenue stream. It usually takes a while to grow an audience and have your videos rank well, but if you turn on monetization (meaning, you allow YouTube to show ads on your videos), you could start earning a nice side income from your most viewed videos. (See also: <a href="http://www.wisebread.com/5-social-media-stars-who-earn-way-more-than-you?ref=seealso" target="_blank">5 Social Media Stars Who Earn Way More Than You</a>)</p> <h2>3. Get paid to do what you love</h2> <p>It doesn't feel like work if you love doing it, right? You might not even call it work.</p> <p>If you love to make jewelry, pottery, sew, knit, or do other kinds of crafts, you can sell your wares on websites such as eBay or Etsy, or face-to-face at craft fairs. Gardeners can make money by opening a booth at a local farmers market. (See also: <a href="http://www.wisebread.com/the-5-best-sites-to-sell-your-arts-and-crafts?ref=seealso" target="_blank">5 Best Sites to Sell Your Arts and Crafts</a>)</p> <p>A friend of mine who is an amazing photographer recently started selling calendars to friends and family with some of her most beautiful prints. She earns $20 of profit on every calendar that she sells, and she hasn't had to invest much extra time to get the calendars made. She gets her customers through word-of-mouth referrals and social media. You may be pleasantly surprised how much reach you can have with social media marketing.</p> <p>The same is true if you have a particular skill that is in demand. You can start your own consulting business, either online or in-person, and start charging clients to do what you love. (See also: <a href="http://www.wisebread.com/5-ways-to-make-more-money-in-under-10-hours-a-week?ref=seealso" target="_blank">5 Ways to Make More Money in Under 10 Hours a Week</a>)</p> <h2>4. Earn money for the driving you already do</h2> <p>If you have a car and spend a lot of time commuting to work or school, or driving around for other purposes, companies will pay you to use your car for advertising space. It might sound tacky at first, but chances are you can think of a good use for the extra $100 a month that you stand to earn, without any extra cost to you.</p> <p>If you're earning a bit of extra cash by driving, you may not have to pick up that extra overtime shift or work through holidays. Opt for reliable companies such as <a href="http://www.carvertise.com/" target="_blank">Carvertise</a> and, as always, be aware of potential scams. (See also: <a href="http://www.wisebread.com/7-ways-to-earn-extra-money-with-your-car?ref=seealso" target="_blank">7 Ways to Earn Extra Money With Your Car</a>)</p> <h2>5. Rent your space</h2> <p>By now, Airbnb is a household name, but there are <a href="http://www.wisebread.com/10-vacation-rental-alternatives-to-airbnb?ref=internal" target="_blank">other short-term rental platforms</a>, too. You can use these platforms to earn a bit of extra cash if you have a spare room, a second home, or other type of property. Airbnb includes free rental insurance for hosts and, depending on where you live and how often you rent your property, you can earn $1,000 a month and up.</p> <p>If you love it, you might consider investing in a property just for renting out through Airbnb. If you get the right deal on the right property, you could earn a lot more than leasing the place out. But be sure to check your local laws. Some municipalities restrict short-term rentals because they tend to drive up rent for local residents. (See also: <a href="http://www.wisebread.com/this-is-how-you-rent-your-place-on-airbnb-and-succeed?ref=seealso" target="_blank">This Is How You Rent Your Place on Airbnb</a>)</p> <h2>6. Renegotiate your contract</h2> <p>If you're feeling in a rut with your job or you're ready to start a new contract, there are some unconventional work agreements that may help you to make more money. For instance, a friend of mine who works in marketing recently negotiated a new contract that allows her to work at the office about 20 hours a week. Outside of that, she's free to decide how much she wants to work, and she can do it from home.</p> <p>She will receive a lower base salary per month than she did through her old full-time arrangement, but she will earn commissions on the sales that she makes. That makes it a good deal for both her employer and for her. If she works less, she will earn less, but she has the flexibility to decide. She also has the option to use some of her time outside the office to take up one of the other jobs listed above.</p> <p>Of course, you can also go the traditional route and <a href="http://www.wisebread.com/5-things-to-say-to-your-boss-to-get-a-promotion-or-raise?ref=internal" target="_blank">ask for a raise</a> if you've been in the same position for about a year and you have compelling evidence to support your request. (See also: <a href="http://www.wisebread.com/5-times-you-should-demand-a-raise?ref=seealso" target="_blank">5 Times You Should Demand a Raise</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amanda-gokee">Amanda Gokee</a> of <a href="http://www.wisebread.com/6-ways-to-earn-more-money-without-working-more-hours">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-great-retirement-jobs">6 Great Retirement Jobs</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-costly-pitfalls-of-hosting-on-airbnb">5 Costly Pitfalls of Hosting on Airbnb</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-downsides-to-a-bigger-paycheck">5 Downsides to a Bigger Paycheck</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-easy-ways-retirees-can-earn-extra-income">9 Easy Ways Retirees Can Earn Extra Income</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/protect-future-earnings-by-negotiating-the-right-starting-salary">Protect Future Earnings by Negotiating the Right Starting Salary</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income Extra Income AirBnb extra hours flexibility jobs making more money negotiating part time pay raise side gigs Tue, 11 Apr 2017 08:30:14 +0000 Amanda Gokee 1925375 at http://www.wisebread.com 10 Ways to Boost Your Take-Home Pay http://www.wisebread.com/10-ways-to-boost-your-take-home-pay <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-ways-to-boost-your-take-home-pay" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/2390242316_bc07437579_z.jpg" alt="smiling woman" title="smiling woman" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>When you look at the paycheck you get every other Friday, are you dissatisfied? Do you wish it could be higher?</p> <p>If you've answered &quot;yes&quot; to either of these questions, take heart! The following 10 strategies you can do now will increase your take-home pay. They all require different levels of effort, and each come with different levels of payoff. (See also:&nbsp;<a href="http://www.wisebread.com/25-ways-to-make-money-today">25 Ways to Make Money Today</a>)</p> <h2>1. Check Your Withholdings</h2> <p>A quick and easy way to increase your income is to make sure that the tax man doesn't take more than he needs to. You don't want to have too much federal income tax withheld from your paycheck.</p> <p>The W-4 is a form you fill out whenever you start a job. You use it to choose the amount of Personal Allowances you claim.</p> <p>Here's how it works. The more Personal Allowances you claim, the less taxes you'll have taken out of your paycheck.</p> <p>Just to be clear, however, this doesn't give you a free reign to cheat the tax system. You need to have enough taxes taken out of each paycheck, or else you'll end up owing money to the IRS at tax time next year.</p> <p>So review your situation annually or after a major life change. If this results in you being able to claim more Personal Allowances, then update your form W-4, and give it to your HR department.</p> <p>You should see a bump in your take-home pay within a few pay periods.</p> <h2>2. Check Your Payroll Deductions</h2> <p>As part of your total compensation package, you probably receive benefits that include &mdash; but aren't limited to &mdash; life, medical, dental, and long-term disability insurance.</p> <p>Are you a relatively healthy person who actively monitors your well-being? Sometimes it's beneficial to see if switching to lower-cost insurance providers or decreasing your amount of coverage makes sense for you. Doing so will give you a slight bump in pay.</p> <h2>3. Submit Your Expense Reports on Time</h2> <p>Do you attend all-hands meetings at an offsite location? Drive to work meetings at a different facility? Are you asked to buy food for meetings? Take a client out to lunch? Have you taken advantage of your educational reimbursement program to advance your career?</p> <p>Although you normally pay for these expenses upfront, they're usually reimbursable to you by submitting an expense report. The key is to do this as soon as you can, so you don't delay repayment.</p> <h2>4. Work Overtime</h2> <p>If you're a non-exempt employee, you get paid for working overtime. This means that for every hour you work more than 40 hours per week, you get paid at least one-and-a-half times your hourly rate.</p> <p>Let's say you work 45 hours per week and normally get paid $25 per hour. This means that for those last five hours, you're getting paid more for your time &mdash; $37.50.</p> <p>Not only are you getting paid for your extra time, but you're also getting paid at a higher rate.</p> <p>Is there a busy season at your company? Do you do your job well, and does your boss know about it? If so, volunteer to work overtime if your boss asks you.</p> <h2>5. Earn a Raise</h2> <p>Most companies have a process to give employees a merit increase. There's usually a time of year when management performs an annual compensation review.</p> <p>The process will probably involve reviewing your work performance to see if you've reached your goals. So work hard and do well this year, and you'll likely get a merit increase next year.</p> <h2>6. Get the Bonus</h2> <p>Many companies have a results-sharing program that pays you a bonus if the company achieves its goals. This bonus payout is usually dependent on your job performance, as indicated by the rating you receive on <a href="http://www.wisebread.com/7-ways-to-ace-your-next-performance-review">your performance review</a>.</p> <p>If you do your job well and help the company achieve its goals, you should see this nice boost in your paycheck once a year.</p> <h2>7. Cash Out Your Vacation Time</h2> <p>Do you have more vacation time than you actually use? With company holidays and floating holidays, you may have more time off than you need.</p> <p>If this is the case, then cash out some of your vacation time. These hours are usually paid at your hourly rate and subject to income tax. Check your benefits handbook to confirm.</p> <h2>8. Get a Side Job</h2> <p>What if you don't get paid for overtime at your day job? Or what if you want to diversify your sources of income in case your day job isn't too stable?</p> <p>In addition to your day job, you can boost your take home pay by <a href="http://www.wisebread.com/part-time-jobs-that-can-get-you-serious-discounts">getting a part-time job</a>. This will give you a whole new paycheck that you can rely on.</p> <h2>9. Get a New, Higher-Paying Job</h2> <p>A merit raise will probably only boost your take home pay up to a limited amount. Landing a new position, however, is likely to increase your pay much more.</p> <p>Take courses to improve your skill set. You can often get reimbursed for them by your company through its educational reimbursement program. By doing this you'll put yourself in a position qualify for a higher-paying job in the future. In fact, you can make it part of your <a target="_blank" href="http://www.wisebread.com/how-to-create-a-financial-5-year-plan">five-year financial plan</a>.</p> <h2>10. Negotiate a Higher Salary</h2> <p>As mentioned earlier, a merit increase will only increase your income a limited amount. And if you're not ready to apply for a higher-level position, then the next best step is to negotiate your salary in your current position.</p> <p>Talk to your boss about what you can do to add more value, and quantify that value in terms of a salary increase. Do the extra work, and then ask for a meeting several months later to evaluate your progress.</p> <p>If you can document your results and come to an agreement, you'll have earned that increase.</p> <p><em>Have you been able to increase your take-home pay? How did you do it?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/darren-wu">Darren Wu</a> of <a href="http://www.wisebread.com/10-ways-to-boost-your-take-home-pay">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-downsides-to-a-bigger-paycheck">5 Downsides to a Bigger Paycheck</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-earn-more-money-without-working-more-hours">6 Ways to Earn More Money — Without Working More Hours</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-money-should-a-ceo-make">How much money should a CEO make?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-often-overlooked-jobs-that-pay-big-bucks">10 Often Overlooked Jobs That Pay Big Bucks</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-the-aig-bonuses-be-taken-away-or-not">Should The AIG Bonuses Be Taken Away Or Not?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income increase income pay raise take-home pay Mon, 04 Mar 2013 11:24:30 +0000 Darren Wu 968068 at http://www.wisebread.com How to Hold onto Talent When You Can’t Afford Raises http://www.wisebread.com/small-business/how-to-hold-onto-talent-when-you-can-t-afford-raises <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/how-to-hold-onto-talent-when-you-cant-afford-raises-elaine-pofeldt" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/how-to-hold-onto-talent-w...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/how-to-hold-onto-talent-when-you-can-t-afford-raises" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000012767690XSmall.jpg" alt="Handshake " title="Handshake" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>During the worst of the recession, small company owners didn&rsquo;t have to do much explaining to employees if they kept a lid on raises; it was clear that many businesses were in survival mode. But the mood seems a little less dire this year, even with unemployment at 9.6%. For one thing, <a href="http://www.ft.com/cms/s/0/2f43d8f2-e6bd-11df-99b3-00144feab49a.html#axzz16XYWfgrw">consumer spending is picking up a bit</a>; on Black Friday, comScore reported a <a href="http://www.comscore.com/Press_Events/Press_Releases/2010/11/Black_Friday_Boasts_648_Million_in_U.S._Online_Holiday_Spending">9% increase in online sales</a> in the U.S. compared to 2009.</p> <p>Many entrepreneurs and executives realize that with business growth picking up, they need to act now to hold onto their best employees. HP, for instance, recently announced that after a two-year pay freeze, it would <a href="http://www.idahostatesman.com/2010/11/26/1432396/hp-to-reinstate-raises-after-two.html">start paying raises in fiscal 2011</a>. According to the <a href="http://www.businessmanagementdaily.com/articles/23712/1/Employers-still-giving-raises-mostly-to-high-performers/Page1.html#">WorldatWork 2010-2011 Salary Budget Survey</a>, while U.S. employers will offer salary raises averaging 2.5% in 2010, they will award high performers average raises of 3.7%.</p> <p>How do you keep up if your firm is still facing tough economic conditions? It takes some smart strategizing. Here are some tips from Jill Morin, CEO at Kahler Slater, a Milwaukee design firm that has made it onto the Great Place to Work Institute&rsquo;s <a href="http://www.greatplacetowork.com/what_we_do/lists-us-sme.htm">Best Small &amp; Medium Workplaces list</a> every year since the award was introduced in 2004.</p> <p><strong>Tie raises to increased responsibility</strong>.</p> <p>Kahler Slater has not offered across-the-board salary increases to its staff the past couple of years as it fought its way through tough economic conditions. However, it has given raises to staffers who got promoted and took on more responsibility. The company adjusted their pay to take into account its policy of paying higher-than-market rates to attract better-than-average people, says Morin. For those who already earned more than the market rate, it offered nominal increases to acknowledge their promotions, she says.</p> <p><strong>Link bonuses to achieving revenue goals. </strong></p> <p>Recognizing that it was important for the team to benefit financially if the firm met its financial goals, Kahler Slater continued to pay bonuses during the recession. Its top executives devised a formula in which bonuses were based on both the company&rsquo;s achievement of key goals in areas such as revenues and the contributions of its departments and individual employees in meeting those benchmarks. &ldquo;It&rsquo;s about succeeding as an organization and going above and beyond,&rdquo; says Morin.</p> <p><strong>Explain the company&rsquo;s financial status clearly. </strong></p> <p>When two employees asked for cost of living raises that the company couldn&rsquo;t afford, Kahler Slater had to turn them down. Higher ups referred the staffers to financial reports that the company posts online for all of its team to review, helping the employees to understand why they couldn&rsquo;t get more money at the time. &ldquo;Both of those people are still with us,&rdquo; says Morin.</p> <p><strong>Provide rewards that aren&rsquo;t just financial. </strong></p> <p>For the creative types that Kahler Slater employs, working isn&rsquo;t just about earning a paycheck, says Morin. So, while the company takes on &ldquo;bread and butter&rdquo; work to pay the bills, it also looks hard for higher-profile projects that will keep its team engaged. &ldquo;We try to work with clients where staff can do their best work and really shine,&rdquo; says Morin. &ldquo;They want to feel they&rsquo;re contributing to a cause greater than their own career.&rdquo;&nbsp;Of course, passion doesn&rsquo;t pay the bills. Strategies like these will get you through tough times, but if hiring picks up, many small companies will have to reinstate traditional raises &mdash; or will find themselves with empty desks to fill.</p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/elaine-pofeldt">Elaine Pofeldt</a> of <a href="http://www.wisebread.com/small-business/how-to-hold-onto-talent-when-you-can-t-afford-raises">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-build-business-credit-when-youre-self-employed">5 Ways to Build Business Credit When You&#039;re Self-Employed</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-grow-your-solo-business-without-hiring-employees">How to Grow Your Solo Business Without Hiring Employees</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center bonuses employee morale pay raise small business Wed, 15 Dec 2010 18:38:22 +0000 Elaine Pofeldt 358800 at http://www.wisebread.com How much money should a CEO make? http://www.wisebread.com/how-much-money-should-a-ceo-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-much-money-should-a-ceo-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/fatcat.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Ah, to be the head of a large American corporation... can you imagine what <a href="http://www.ips-dc.org/reports/070829-executiveexcess.pdf">life must be like at the top</a>?&nbsp;</p> <ul> <li>In 2007, the CEOs of large U.S. companies&nbsp;were paid in one day what the average US worker makes in an entire year. With an average pay of $10.8 million annually, over 364 times the pay of the average American worker. (Looking at median pay, however, brings the pay ratio closer to <a href="http://assets.opencrs.com/rpts/RL33935_20070322.pdf">179 to 1</a>.)</li> <li>CEO pay has increased 45% in the past ten years. Contrast this with the fact that the federal minimum wage increase, which just went into effect, gives bottom-rung workers roughly 7% less money, in real terms, than they were making a decade ago.</li> </ul> <p>Is this fair? Is it just?</p> <p>I myself am ambivalent on the issue. On one hand, in a capitalist society, there really isn't any limit to how much money a person can earn, technically. And there are many cases in which the CEO of a company actually conceived of and founded the company - shouldn't such an individual have the right to make oodles of money from his or her ideas? After all, some of the biggest companies in the world were started in someone's garage or home office.</p> <p>On the other hand, many of the CEOs at big US corporations did not build the company from the ground up. They might be immensely talented individuals, but do they deserve to be paid over $10 million a year, to say nothing of stock options, and perks like use of the company's jet?</p> <p>What about poorly performing CEOs? And severance packages? How much should companies pay a CEO to leave? According to the Kellogg School of business, leaving a company can be as lucrative as heading it up. Look at the severance packages for the following ex-CEOs:</p> <ul> <li>Robert Nardelli (Home Depot) - $210 million</li> <li>Michael Ovitz (Disney)&nbsp;- $140 million</li> <li>Stephen Hilbert (Conseco)&nbsp;- $72 million</li> <li>Carly Fiorina (Hewlett-Packard) - $21 million</li> </ul> <p>Is this money well-spent? Anyone who runs a small business in middle America would tell you that it doesn't seem logical to give more money to someone who is performing poorly just to make them go away. Can you imagine firing, say, someone who works for your home cleaning business because they've done a terrible job, and offering them several thousand dollars to never work for you again?</p> <p>There are a number of economic factors that play into these scenarios, usually involving risk and&nbsp;stock volatility&nbsp;(a good but oddly apologetic article on the issue can be found <a href="http://insight.kellogg.northwestern.edu/index.php/Kellogg/article/are_large_ceo_severance_packages_justified">here</a>). Compensation packages are often meant to help protect the reputation of a departing CEO. According to the Kellogg School, &quot;Research also suggests that companies offer incoming CEOs a greater amount of ex-ante severance pay when requesting a confidentiality agreement.&quot;</p> <p>I'm trying to fathom what this really means. As someone who has signed countless confidentiality agreements without ever getting access to the coporate jet, what gives CEOs the impression that their discretion can be bought? When Fiorina left HP, her compensation package included &quot;financial counseling&quot;. What kind of counseling do you need when you're walking away with $21 million? <em>Put it mostly in savings?</em></p> <p>Publicly-traded companies are run by corporate boards who&nbsp;determine&nbsp;a CEO's pay and benefits. Board members are usually experienced leaders from other large corporations whose expertise is called upon. However, many corporate boards comprise members whose individual goals often include becoming CEOs of major US firms themselves, so it is in their interest to provide lucrative (or excessive) compensation packages to the chief executive officer.</p> <p>This has raised the question as to who, exactly, should decide how much a CEO makes? What if a company's employees had the right to vote on a compensation package for their leaders? Should a company's shareholders have a binding vote? Should there be a cap on how much an individual can earn?</p> <p>I have no easy answers, but the question has been weighing on my mind as of late. What do you think?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-karim">Andrea Karim</a> of <a href="http://www.wisebread.com/how-much-money-should-a-ceo-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-besides-salary-to-negotiate-at-work">10 Things Besides Salary to Negotiate at Work</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-negotiate-higher-pay-at-your-next-new-job">How to Negotiate Higher Pay at Your Next New Job</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-important-signs-that-your-job-sucks">10 Important Signs That Your Job Sucks</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-downsides-to-a-bigger-paycheck">5 Downsides to a Bigger Paycheck</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-earn-more-money-without-working-more-hours">6 Ways to Earn More Money — Without Working More Hours</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income CEO companies cost of living Fortune 500 pay pay raise pay scale salary Fri, 08 Aug 2008 17:47:04 +0000 Andrea Karim 2301 at http://www.wisebread.com