My Awesomely Pitiful Performance Review (March 28, 2014)

by FI Fighter on March 27, 2014

in Career

http://www.dilbert.com

Performance Reviews for 2013 are now DONE and in the books! At my company, it’s customary to spend a week on reviews where your boss will sit down with you for a nice 1-1 chat. I work in a pretty small group, so it’s usually just one employee per day. For whatever reason, my boss decided to hold my review off until the very end. Yup, just my luck… I was the last person in my group to receive their review this year.

Background

When I was younger, I used to agonize over the yearly performance review. I wouldn’t be able to concentrate the entire week when reviews were happening because I was so amped up. I was young, ambitious, and way too eager to please. I used to work twelve hour days on the regular, and tried hard to follow that “good advice” of, “being the first person to arrive in the morning, and the last one to leave.”

Luckily for me, it only took two reviews or so for me to finally wake up and realize how the real world operates. In a corporate environment, it’s NOT the most hard-working employee who gets the biggest pay raise. No, it’s definitely NOT the “company man” who will capture the largest bonus either. When it comes down to it, the person who will reap the most rewards is the person who is most visibly known and connected.

You can be the biggest slacker in your group and it won’t matter. If you know how to perform in front of the cameras (useless team meetings), and you’re friends with the right people in the right places, you’ll be rewarded handsomely for your “accomplishments”. As a matter of fact, you’ll probably even be on the fast track to getting promoted…

Back in those days, I didn’t yet know about early financial independence. Passive income was a foreign concept to me and I naively believed that if I always worked hard, it would pay off in the long run. Naturally, I was rather crushed the first time I received my review and found out that my merit increase would only be for 3%.

Awakening

In 2011, my merit increase was scheduled for an even more insulting 1.5%. My boss at the time reasoned that the company was operating on very thin margins and had no room to reward even their best performers. I asked him if he could do anything about it and he stood firm on his “no”. He said I should talk to HR if I wanted to protest. I declined, and instead announced to my boss that I was leaving for a better job opportunity. Two days later, I was on the phone with HR and they told me they would match ANY outside offer I received. To make things “right” for me, they would even throw in some stock options and RSUs… Stuff that I somehow wasn’t qualified for just two days earlier…

I declined and proved to them that I was serious about leaving. I went elsewhere and earned a higher salary… one that I wouldn’t have reached at the old company even if I had stayed for another five more years (without them matching)…

It was through that experience that I learned how to really get ahead in life. If you ever want to be fairly compensated from any employer, you MUST first secure an offer from a competing company.

Your employer will never fully appreciate you until they realize you already have one foot out the door. After all, if their biggest competitor wants you, you must be valuable! Secure an offer elsewhere, and your new merit increase negotiations will start at 20% and above…

My Review

Getting back to my review — The merit increase came back, and it wasn’t pretty. Just like with before, I was only able to get a 2% bump for this year. However, instead of feeling insulted, I took the news in stride.

I’ve gotten used to playing in the corporate sandbox, so I’m no longer surprised with anything they throw at me. I checked out mentally a long time ago. They could have came back with 0% and I really wouldn’t have cared. I probably don’t even put in enough work these days to ask for more. Don’t get me wrong, I still take my job seriously and I always put forth my best efforts when I’m working on tasks… I just don’t go overboard in trying to kill myself for a bonus I know that I probably won’t get.

I don’t work long hours. I don’t pay attention in meetings. And I’m now the last person in the office and the first one to leave… most of the time. So, I’m giving back to the company just as much as they are giving to me. Hey, two can play this game! I’ve been taken advantage of and abused for long enough by corporate… It’s about time I fought back and stood up for myself.

Passive income. The journey to early FI. These steps that I have taken to better my life are paying dividends in more ways than one. The employee who doesn’t need their job is the most powerful one of them all. You get to be a honey badger all the time!

Next Steps

Despite my abysmal review, my boss actually went on to tell me that I scored higher than most of my peers. In fact, I was one of the “top performers”… If your best employees are netting 2% raises each year, what are your bottom performers getting?

At this point, I don’t really care. I just want to hold on to this job for another year or so. Frankly, I only still need this job because I need work income to qualify for more loans. That, and I still have a lot of stock options I’m waiting for to vest.

One thought that has crossed my mind is to start applying for a new job this coming Summer. Even though I don’t plan on working for corporate for much longer, it wouldn’t hurt to secure one last 20% pay raise or so. That, and another large signing bonus. In general, I think it’s a good idea for someone to jump around every two to three years to get that strong salary bump.

But it is what it is… I seriously don’t know how people keep continuing to play this game for so long. For anyone reading this who’s just starting off in their career, trust me, life in corporate gets old real quick.

 

Have you gotten your performance review? How did you do last year? Are you happy with your merit increase?

{ 29 comments… read them below or add one }

1 Leigh March 27, 2014 at 11:15 pm

“If your best employees are netting 2% raises each year, what are your bottom performers getting?”
That’s pretty crazy.

My last few years have been really good – I’ve averaged 10% salary raises per year, ignoring RSUs. This year, I’m expecing no raise and no bonus. Ah well, I’ll still earn a pretty decent chunk of change. I go back and forth between being annoyed about it and not caring much.

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2 FI Fighter March 30, 2014 at 10:25 am

Leigh,

Yeah, it’s pretty crazy! 10% is awesome, and I wouldn’t complain at all if I was able to secure that. 😉

I think I would probably be more upset if I didn’t have any additional income streams coming in. However, since I know I won’t be there for much longer, it doesn’t bother me at all. I just feel bad for all those others who are putting in extra work to try and get recognized… It’s sad, but unless they leave, they won’t.

All the best!

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3 Income Surfer March 28, 2014 at 1:54 am

Haha, this sounds like my last engineering job. During the real estate boom years bonuses and raises were constant. Then the collapse hit. I was a top performer and one of a few engineers at my level, and a couple years in a row I was told there would be no raise…..and to be glad I wasn’t fired, like the other guys. In my experience, I preferred being laid off to constantly fearing my job would be lost. It allowed me to pursue other interests and emotionally move on from that caustic work environment.

Keep at it man, you’re doing great. One day soon you won’t need these goof balls and can live out the FI life of your dreams
-Bryan

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4 FI Fighter March 30, 2014 at 10:27 am

Bryan,

Yeah, I’ve been through my fair share of hiring freezes and pay freezes as well… it’s very demoralizing when you are working extra hard at your job.

The work environment can be rather toxic, so I’m trying to take a page out of your book and leave it all behind. Even if I were to take a huge pay cut, I would much prefer working for myself.

Take care!

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5 No Nonsense Landlord March 28, 2014 at 4:48 am

As you get closer to FI, it is even worse. You will find that you do not have time for ‘work’. I already have an awful case of Senior-it is, even though I am still a sophomore in the final years to my retirement.

Two years before I leave FT work for me, it’s hard to take. But I have put in many more years than you, and have played the corporate game far longer. I have been in various ‘rock star’ positions and carried the company torch.

The W2 income is steady, and stable. It helps purchase properties, fund 401Ks, and may contribute to a pension. Social Security likes at least 10 years, and preferably 35 solid years to collect the max in the future.

Social Security will always be there. It may be a bit closer to a welfare program than it is now, but it will be there. That is, as long as we have trees and ink.

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6 Sam March 28, 2014 at 6:22 am

Agree, you start to itch.

Just don’t forget to negotiate a severance package when you walk away!

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7 FI Fighter March 30, 2014 at 10:29 am

Eric,

LOL! Senoritis, I had that so bad when I was in college 😉

I hear you though, and it will get to a point when all these side hustle ventures will start to consume more and more time… It’s difficult enough trying to concentrate even today, as is…

Best of luck to you as you wind down your final years in corporate.

Keep up the great work!

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8 JC @ Passive-Income-Pursuit March 28, 2014 at 5:31 am

That’s pretty surprising that a top performer is getting a 2% bump. I feel bad for the middle of the road and low end guys. And good for you for changing jobs after they gave that paltry raise in 2011. I’d have left mainly on principle after they came back saying they’d match any offer. It’s unfortunate that to really get good salary increases that you pretty much have to have another offer and change jobs but companies have brought this on themselves by not rewarding employees with good increases. They set up a system to try and keep more profits for themselves and in turn that system encourages employees to continually rotate through jobs and jump ship at the first sign of something better. It’s amazing to me how my grandfather worked for just one company after getting out of the military but now most people are changing jobs every 2-3 years.

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9 FI Fighter March 30, 2014 at 6:29 pm

JC,

Yes, leaving on the grounds of principle is why I ultimately left. I didn’t like how they were telling me they had no room to negotiate, and then all of a sudden found a way to match any offers I was receiving.

In today’s market, you really do need to jump around often if you want to be properly compensated. It’s just how the game is setup…

Cheers!

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10 Thegoblinchief March 28, 2014 at 5:58 am

I work at a company that doesn’t do reviews and laughs if you walk for a raise.

My DW has only gotten more than a 2% increase when she’s moved positions, but her company does have a somewhat generous bonus system for all of the extra work she does (audits and training) on top of her salaried duties.

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11 FI Fighter March 30, 2014 at 6:30 pm

thegoblinchief,

Wow, that’s crazy… The person leaving for the raise is probably laughing right back…

Good to hear that your wife is getting some bonuses for all her hard work… A 2% increase just doesn’t do a whole lot…

Take care!

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12 Sam March 28, 2014 at 6:20 am

Yikes, if a too performer gets a 2% raise…. I donno. Did he say that with a straight face? If so, he is a good manager and poker player!

What about trying to find another job again?

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13 FI Fighter March 30, 2014 at 6:32 pm

Sam,

Yup, he said it with a straight face and everything… He actually is an avid poker player 😉

Looking for another job is definitely something I would consider doing… I might get on that sooner than later… But at this point, it really shouldn’t matter to get to early FI.

Take care!

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14 Marvin March 28, 2014 at 7:32 am

Uggh, the dreaded “review” I have gone above and beyond at my job and have been told so on multiple occasions but giving out an “outstanding” is very rare apparently. So I’m just grouped with 40% of the other employees in my section. It’s such a joke in my opinion, they shouldn’t even do them. Especially when everyone is getting the same raise (if any).

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15 Marvin March 28, 2014 at 7:32 am

BTW… might be getting in on my first real estate deal this summer!!! Thanks for all the help and information you’ve provided!

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16 FI Fighter March 30, 2014 at 6:34 pm

Marvin,

That’s awesome! I wish you the best of luck. Hope you’re able to find a smokin’ deal!

Cheers!

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17 FI Fighter March 30, 2014 at 6:34 pm

Marvin,

Yeah, it’s very disheartening to be the one working hard and knowing it won’t even matter in the grand scheme of things…

Working hard gets old real fast if there’s no compensation attached to it… It’s hard to rationalize the time and effort if there’s really no benefit for all the extra laboring… Why not just do the bare minimum needed to get by? If your compensation is the same, where’s the incentive?

If you let a corporation bully and take advantage of you, they will every chance they get. You have to look out for yourself b/c no one else will…

All the best!

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18 Done by Forty March 28, 2014 at 8:31 am

I love your perspective on this! I’m still really motivated by reviews and bonuses, for better or worse. I find the bloom comes off the rose within a few months, but I’m still really pretty motivated from this last go round. Let’s see if the fire’s still there in June. 😉

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19 FI Fighter March 30, 2014 at 6:37 pm

Done by Forty,

If your company does reward you for the extra work and effort, then it can be a great thing, absolutely. You put in the work, you get the reward. It seems to benefit both parties.

Unfortunately, most companies aren’t so smart and treat employees as though they are easily replaceable. If you can get 20% more elsewhere, why stay?

Best of luck!

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20 Tom March 28, 2014 at 8:37 am

I was in a situation recently where this company I was temping for on the island (who in the initial interview said they would not extend my contract beyond 6 months) gave me an offer.

Problem was that the offer was only another temp contract for 6 months and only about 12k more than I was making as a temp. They claimed they would not be able to get me through immigration this year if they were to apply for a 2 year contract. When they found out I had another offer with a 2 year visa/contract, an hour later they bumped up the salary by another $10k and said they would match the 2 year contract.

I actually liked the company and the people I was working with, but I had moved on because ultimately I think I have more upward potential at this new job. If I were in your shoes though and only 1-2 years from FI I would have chosen my old company as it would have been a little more money and easier work.

But to your point, I find it amazing how much companies try to screw you over. Make no mistake about it, they are there for profits and are almost never out for your benefit.

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21 Kevin Drongowski March 28, 2014 at 9:47 am

That’s absolutely true about needing 1 foot out the door for a decent raise.

At my last job, I tried just straight up asking for a raise and got about a 6% raise. Then a year later when I had a competing offer, all of a sudden they had all the money in the world!

I actually just got a new job this week that is resulting in about a 55% raise. Needless to say, once I gave my notice, suddenly we were “just about to renegotiate my pay structure.”

It’s all so full of lies and manipulation. This is why we save money and invest.

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22 PC March 28, 2014 at 11:26 am

Oh my, I can so relate… except that in my field, I’m easily replaceable lol. If I had stayed at my last job, it would have taken me probably another 5+ years @ 3% raise to get to where I am at now. If you’re unhappy with your salary, always market yourself for better opportunities, don’t give up. Even I did it when I literally suck at interviews.

It’s amazing how they recognize you’re a stellar employee, yet only give you a puny 2% raise? Does the bottom feeders get 0% raise then? That would be only fair right? But life isn’t fair, is it? As for being buddies buddies with upper management is key to improving your chances in the company. So be friendly and work it if need be.

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23 Dividend Mantra March 28, 2014 at 5:36 pm

FI,

I can relate!

My own situation is much worse. The new guy in our department is fully integrated now and my sales in March 2014 are about 40% less than March 2013, which effectively amounts to a straight 40% pay cut. Of course, this will vary from month to month, but, overall, the foreseeable future looks disappointing.

But that’s a free market. It simply means I need to explore my options here pretty soon. Unfortunate, but it is what it is.

I’m rooting for your idea of looking for a 20% bump elsewhere. Although you won’t be at it much longer, it could help boost your income in the meanwhile.

Best wishes.

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24 CI March 28, 2014 at 5:54 pm

Good read, love the honey badger reference! Classic!

Perhaps changing companies would be a good move? I say milk the last year or two for all you can get (sign on bonus) before retiring in grandiose fashion. It might even motivate you for a little while…

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25 Jon @ Money Smart Guides March 29, 2014 at 4:11 pm

I learned the corporate game fairly quickly myself. At my first job, I busted my butt only to realize that everyone gets the same raise every year. So, why bust my butt when I could just do enough to be considered a good employee? Luckily, I left that job and went somewhere that actually valued hard work and gave raises based on your real performance.

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26 theFIREstarter March 31, 2014 at 12:34 am

What a sad, pathetic state of affairs most corporate companies compensation structure is!

There are many instances of where we’ve lost good people over the years at my place but it was highlighted yet again recently where a hard working employee of 8 years was refused a decent pay rise about 10 months ago. The usual lines were spun, no money, no budget. Surprise surprise when he said he was leaving some extra money magically appeared from nowhere but he left anyway. Good for him I say.

I have no idea what the people in control think they are doing, and how high up these decisions go. I have a sickening feeling it really isn’t that high up though and it is your direct manager making these dickhead decisions, mugging us off on one hand while pretending to be our mate on other. Anyways… Mini rant over… Just like you FI I don’t really care any more (I feel bad for that guy and others who are still playing the game though) as my pay is high enough now to save a decent portion and will be out of the game soon (although not as soon as you!).

I’m not adverse to change but don’t see much point in bumping my pay too much further by changing jobs. I guess it would help me reach FI quicker but I would have to learn a whole new job, work on impressing new people, and so on which would take my focus away from my FI plans. If you can switch up jobs and still do all that or are itching for a change for the last couple of years of corporate employment then you should definitely go for it and enjoy the pay bump as well!

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27 weenie April 2, 2014 at 3:43 am

Hi first-time poster here, great blog by the way, but hope I don’t ramble on too much!

I for one don’t find it surprising for a top performer to get 2%, as that’s a line that’s been trotted out many a time from the company I work for (I work for a US multinational conglomerate). There have been several years when it’s been 0% for everyone, good or bad performers and most years, there have also been no bonuses (for me anyway). Senior leadership team members however no doubt enjoy bonuses every year regardless….

Anyway, the one exception has been this year, where I’ve gotten both a bonus AND an astonishing >10% rise, which has finally kickstarted my savings and goal towards FI.

Was it an exceptional year for me? Not really – performance-wise, it was as good as previous years. So what changed? It sounds silly, but I think having my desk moved right NEXT to my boss’ desk (a logistical decision due to storage issues) made the difference, because I think he finally saw firsthand that yes, I do work bloody hard!

Which brings me to your observance that “The person who will reap the most rewards is the person who is most visibly known and connected” which unfortunately, is absolutely true.

I’ve seen it referred to as PIE, ie Performance, Image, Exposure.

More info here: http://www.mondofrank.com/pie/

The important numbers are:

Performance – 10%
Image – 30%
Exposure – 60%

Those slogging away at the 10% don’t do as well as those who get about and can sell themselves. Sadly, I didn’t find out about this for a loooooong time, but I no longer work overtime, just doing enough to perform well and it looks like finally, I might be getting a little ‘exposure’ with my boss!

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28 Zee April 21, 2014 at 11:43 pm

Your description of this is too eerily accurate to other places I’ve worked. Last year I had an hour long argument with my boss about what I think was a 2.4% raise. He said we didn’t meet our goals and blah, blah, blah. But at the same time he was the one that made the goals, then he changed them, and we lost half our team because no one wanted to work for him..

It’s really disappointing that the US workplace is like this. I don’t understand the tactic of the 2-3% raises until the employee decides that it’s time to just move elsewhere for a bigger pay bump. All it seems to do is create discontent workers. Granted, I’m sure there are better places out there to work, but your description seems to be what’s passing as the norm these days.

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29 Millennial Boss January 31, 2016 at 5:52 pm

I have seen a different side of the compensation game now that I’m a manager. First – The company gives you a pool of money for raises and bonuses at year-end that has to be divided among the entire department. They create the pool with an average of 2% raises even though they will pay an outside person much more. Makes no sense since we all know how expensive it is to replace someone but apparently old school HR is still alive. Second lesson – My boss has a say in my direct report’s starting salaries, raises, and bonuses. So no matter how educated I am on the comp game, my boss can trump me. In my experience, the big bosses have old school philosophy on compensation and act sometimes like its coming out of their own pocket. Luckily, I’ve figured out how to persuade the boss to get more money for my people but a manager who isn’t as feisty won’t be as successful. Third – I keep bringing the new people in at higher salaries to keep up with market which ultimately gets around and the people who have been there longer get upset. What choice do I have though because it’s worse to bring the new people in below market and then have the entire team unhappy with comp and leave. I do try to fight to get the employees who’ve been here longer raises but of course the red tape on that process is ridiculous. I’m told to “wait until year end” and we’ll fix it – knowing that the pool will allow me to give them 4% just to screw someone else over and be forced to give that person 1% to keep the pool balanced. Anywho – I think about this alot in regards to employee retention and have tried to find other ways to keep the team engaged. Seems funny that employers will spend all this money in one area but not in others.

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