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The Herald says you don’t want a pay rise

Written By: - Date published: 4:09 pm, June 23rd, 2016 - 32 comments
Categories: class war, newspapers, wages - Tags: , ,

You might be surprised to learn this, but you don’t want a pay rise. The Herald said so:

Say goodbye to the annual pay raise

Annual pay raises don’t work.

Says who?

“You can’t really do a lot with the annual raise,” said Evren Esen, director of survey programs at the US Society for Human Resource Management. When the economy is decent, annual pay adjustments come in at 1 percentage point or 2 percentage points ahead of inflation for a given year.

That doesn’t go far. Employees expect to get at least the cost of living adjustment, and a measly 2 percent increase in pay doesn’t do much to encourage or change employee behavior.

In the end, it’s too small an increase to make a difference.

Leaving aside the question of whether or not pay rises are “working”, if they are too small why not just – make them larger?

“The conventional process of giving an annual increase is being studied, reviewed-under siege, you might say,” said Steve Gross, a senior partner at human resources consulting firm Mercer.

Nice of them to let us know.

Variable pay has become an increasingly large part of pay packages, making up a record 12.7 percent of compensation, according to an Aon Hewitt survey from last year.

It’s a much more effective way to tell people they did a good job. “With bonuses, you’re specifically rewarding someone for their behaviour in a given year. And they’re more able to directly see the line of sight between their performance and the reward for that performance,” said Esen.

“It gives companies the ability to really make a meaningful gesture to their top performers-to say you did well and you’re getting this bonus.”

From the workers’ point of view a one-off bonus is rubbish compared to even a small increase in base pay rate. Over months, over years, the small increases really add up. We’d be stuffed without them.

Bonuses also help companies keep compensation costs down. It’s hard not to give people raises, and it’s even harder to cut people’s salaries, but employers can give bonuses at will. If a company has a bad year, it doesn’t have to give out bonuses.

And there we have it! Employers pay less, workers get less, and it’s all for our own good, to “motivate” us. Printed in The Herald without comment or discussion. It’s enough to make you wonder whose side they’re on really.

32 comments on “The Herald says you don’t want a pay rise”

  1. Colonial Viper 1

    The NZ Herald is the mouthpiece of the 0.1%. Always has been, always will be.

    • Keith 1.1

      Yep, the Herald almost, almost gets a balanced view that just might attract subcribers and an advertising audience back and then boom, back to type.

      Can’t these idiots see the less people have the less goes around and the quicker the race to the bottom gets?

      • aerobubble 1.1.1

        oh its much worse. i heard that poorer people who work hard and get rich are more likely to die, or have to carry sick family members etc due to their sart in poverty. That smart poor people are better off living life fast coz they die younger. And no amount of piecemeal papering over education, with private schools, or blowing out health budgets, or children trained to stay in survival mode, hesitant, conservative, rather than innovation and collaborating to build a resilient economy.

        Every position of National is anti economy, as its anti the next generation.

  2. b waghorn 2

    Well I just got a nice one after two years with this out fit and it feels good .
    The previous outfit I was with had a whole heap of bonuses linked to unrealistic kpi s which I’m sure the manager was actively stopping us from hitting most of them.
    I’ll take a nice no strings pay raise any day

  3. Rae 3

    Well the Herald can pretty much say anything it likes now, seeing as it seems to no longer comment on any article that might have any sort of importance for NZers

  4. Richardrawshark 4

    irony, they(granny) claim their readership also went up. It there a correlation between nasty doers and hate speakers, and a rise of popularity.

    Hitler
    Trump
    Key /sarc

    now the Herald..

    Roman times when people and animals were ripped limb from limb and blood flowed in spectacular events put on by the state, the crowds loved it. I believe after one failed military campaign the games went on for 70 odd days straight, of the most gruesome kind from my dim memory.

    bad news seems to actually bring the boys to the yard not milkshakes IYKWIM

  5. fisiani 5

    The Herald does not say that you don’t want a pay rise…….
    It quotes someone talking about shifting jobs to get a pay rise.
    The Herald reports the news. Next you will be blaming TV1 if it quotes the report on the news.
    Easy way – If it’s in the editorial then it’s the opinion of the editor.
    If it’s elsewhere then it’s news.

    • Richardrawshark 5.1

      “The Herald reports the news”

      LMFAO there mate, that there is fucking funny. In a massively huge ironic way.

      Who’s news?

    • red-blooded 5.2

      This is not “reporting the news”; it’s spewing out a press release from an interested party, with no attempt to find a balancing view or to independently check the “don’t work” claims.

    • TC 5.3

      Yes dear

  6. AB 6

    Have seen this crap up close.
    They take the obvious truism that money on its own is not motivating – you need to add things like autonomy, trust, good colleagues, and interesting/meaningful/worthwhile tasks to get people really motivated.
    OK – no shit Sherlock – hardly the worlds greatest insight.

    What they then do is use this as a justification for winding back monetary rewards, especially regular pay rises and substituting ‘performance’ pay. To add insult to injury they are totally clueless about performance and naïve in their attempts to measure it.

    Corporate HR – taking stupid and devious to a new level.

  7. Craig H 7

    That article ran in Bloomberg, so it’s not even a local one.

    Anyway, bonuses don’t work long term either – they lead to people gaming the system to achieve bonuses regardless of the outcome for the business.

    • Stuart Munro 7.1

      Bonuses work well in Korea – you get them quarterly if you’re with a decent outfit.

  8. Greg 8

    The story is a lie when it claims above inflation rises, its simply a fiction.
    And Kiwisaver is keeping wage growth suppressed, and it doesnt compound, so over time workers wages get lower.
    Take out Fonterra wage increases and others of the same ilk, and the average wage statistic will plummet.
    John Key was briefed in December 2014 on the power Co’s CEO wage rises will show an increase for the average wage of 3.6%, this proved how the economy is flawed to show any real workers wage increases.
    Making fictional claims as fact just gives overseas property owners a cause to raise rents.

  9. save nz 9

    Employers have not realised that if you don’t have guaranteed income it affects your chances of getting a mortgage or how to budget. If in a given year 12.7% of your income is not guaranteed then you can only count on what your base wage. If your employer is not feeling generous or something goes wrong in the company, you don’t get the rest of your pay .

    Employees can also get to the point where workers have to start looking at other jobs to make enough money to live on – from another part time job or actually having less time to relax at home due to having work you might have paid someone else to do but choosing to do it yourself to save money.

    Being tight as an employer and putting conditions on salary is one of the biggest ways to lower productivity and loyalty.

    I think most people have worked out ‘trickle down’ is not working for them.

    As they say in Eastern Europe.

    “We pretend to work and they pretend to pay us”.

    • You_Fool 9.1

      “Employers have not realised that if you don’t have guaranteed income it affects your chances of getting a mortgage or how to budget. If in a given year 12.7% of your income is not guaranteed then you can only count on what your base wage. If your employer is not feeling generous or something goes wrong in the company, you don’t get the rest of your pay .”

      Incorrect – if you have had the same bonus paid for the past 3 years (i think it was) then it counts as a regular income and the banks count it when working out your annual earnings

      However that can have an issue of the fact that the employer could be annoying the next year (or the one after) and you therefore earn less and have more issues paying for the loan, but that doesn’t get considered by the bank before hand

  10. nukefacts 10

    Seems the super-slow Herald hasn’t heard that performance based pay, which is what they’re really advocating here, simply doesn’t work.

    Good summary here:

    http://boingboing.net/2016/02/25/harvard-business-review-stop.html

    You just know if the Herald is promoting this idea it’s to soften the populace up for another unpopular, failed policy. We see this crap time and again from the Natz, such as their attempts to slide it under the door for teachers via the execrable Hekia Parata.

    The foolish right wing simpletons love performance pay because they have such an impoverished, narrow view of the world that says the only thing that matters is money.

  11. Pat 11

    God…theyre dragging out this old bullshit line again….dont they have any new thoughts?

  12. Macro 12

    Printed in The Herald without comment or discussion. It’s enough to make you wonder whose side they’re on really.

    Well we know whose side they are on.
    Just softening the sheeple up because there won’t be an increase of 25 cents an hour in the minimum wage next year. Bill and John have to get their $3bn in tax refunds don’t you know!

  13. newsense 13

    The good news, of sorts, is that the batshit crazy ideas ideas come out when they’ve got so accustomed to power they’re really outa touch or they think they may lose it so best to barrel through stuff now

  14. RedLogix 14

    So what .. a lot of us don’t even want houses to live in!

    • Richardrawshark 14.1

      Shhh red, the first rule of escape club is we don’t talk about escape clubs.

  15. Grantoc 15

    In NZ annual pay increases for all employees are not automatic. This has been the situation for years.

    Typically managers are given a salary increase budget based on cpi increases and market increases and they can use it at their discretion to ‘reward’ staff reporting to them. They will make judgements about who in their opinion have performed best (this is poorly done generally) and give them the greatest increases.

    What it means is that some staff get increases above the average and others may not get increases at all; based on perceived performance.

    The same approach applies in both the public and private sectors.

    This is how it is done. Salary increases are not guaranteed – except if unions have negotiated guaranteed increases for their members via their collective agreements. This is the exception rather than the rule though.

    There is a debate to had about how remuneration policy, including performance pay, is best designed to meet the changing nature of the world of work.

    • NZJester 15.1

      Typically managers are given a salary increase budget based on cpi increases and market increases and they can use it at their discretion to ‘reward’ staff reporting to them. They will make judgements about who in their opinion have performed best (this is poorly done generally) and give them the greatest increases.

      I have been in jobs where a lot of those that put in genuine hard work sometimes get little credit. When the bosses are about some of the workers work a bit faster and slow down again when they leave. They give the illusion of being the harder worker while in reality doing less work than those working at a steady pace and tend to attract the praises and promotions.

  16. Smilin 16

    ”Bonuses also help companies keep compensation costs down. It’s hard not to give people raises, and it’s even harder to cut people’s salaries, but employers can give bonuses at will. If a company has a bad year, it doesn’t have to give out bonuses.”

    You just got to love the the message between the lines in that if you are a worker like a hole in the head

    BONUSES are like bribery to keep Key people in the firm

    Its hard not to give raises like as long as you are permanent staff or ”çompany personal ” who aren’t in a union but if you are the bosses get a tory govt to come down on you right across the national unionised workforce

    And the last bit how many companies and govt businesses have you seen go to the wall because of bonuses that should never had been paid

  17. Gerald 17

    The Herald must be on another planet. There are basic faults with the current system of wage improvement, bonuses encourage safety compromises, witnessed by accidents and loss of work satisfaction. Also KPI systems encourage short term planning by managers. Percentage increases widen the gap between the well and poorly paid, 5% of nought is nought, as a British worker leader once said. Overall NZ government and business encourages a low paid economy where the basic rights of employees have been eroded. Drones contribute less and can hinder productive work.

    +++++++++++++++++++++++++++
    ++++

  18. It seems to be the sign of the times. Poor worker representation, poor opportunity and high levels of unemployment are paradise for employers. Let’s not even go there in regards to all the cheap labour that they are importing to further lower our wages in the name of immigrants coming here from countries that have a lower standards of living than NZ.
    Bonuses are indeed a rort. Employers always find some little excuse at the last minute not to pay them out. Excuses like, we haven’t done so well this year and can’t afford it or they set the bar too high so that it is completely unrealistic for the employee to achieve the target required. Pay increases are definitely more fair and ensure a decent standard of living is maintained (a joke in today’s economy).
    And as for the minimum wage, that is also another joke. That they can pay the same minimum wage despite a persons experience or the skill level/education required for any job is an absolute disgrace and rort. There should be a minimum wage set for each type of job based on skill level, experience and education required, not this rubbish we currently have adopted from the United States where one minimum wage fits all. It’s one of the main reason why we have a low wage economy.
    I fear the only cure for all of this is more worker presentation that people will support. Very hard to do with the ECA in force combined with high levels of employment and poor opportunity for people. NZ employers just love it and many employees will look after their own economic interest first rather than belong to a collective organisation that will help all workers. Again, not helped with a workforce of immigrants that come from countries where union representation is unheard of and working conditions and living standards are far lower than NZs.
    Opposition parties need to be putting their thinking caps on. What are we going to do about appalling pay rates and conditions in times with poor opportunity, high levels of unemployment, a ECA act that makes union representation just about impossible and a growing workforce of migrants from third world countries with lower living standards.

  19. aerobubble 19

    How is pork, that you need to remove the skin and leave over night in the fridge, called fresh when its obviously not fresh if it cant be used immediately? How is chicken, all flavor of chicken remove, once cooked, left for sandwiches, yet has the texture of soft tofu called fresh chicken when its be manufactured to be so inedible? How is red meat pumped with a cheesey like water, still considered fresh? Bacon, that goes off is not bacon as bacon was once a preserved food that lasted. I get that food companies are trying to lower the shelve life so they can get us to throw away more and so have to return to the super markets sooner. And i get the herald aint interest in informing the public, and its why i just dont care what the herald has or has not done, this thread is a waste of my time, you should not be discussing the herald its how they maintain subscriptionsbecause even thoug wrong, they xan say they are contentionous and relevant.

  20. TC 20

    The Herald; wrapping up broken glass and helping to start fires since ages ago.

    Cant see any other useful purpose for it.

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    BeehiveBy beehive.govt.nz
    1 week ago
  • PM speech at Parliamentary Chinese New Year celebration 2020
    Nǐn hǎo (Hello in Mandarin). Xīn Nián Kuài Lè (Happy New Year in Mandarin) Néi Hóu (Hello in Cantonese). Sun Nin Fai Lok (Happy New Year in Cantonese) Tēnā koutou, tēnā koutou, tēnā koutou katoa. Thank you for your invitation to attend this celebration today. I would like to acknowledge ...
    BeehiveBy beehive.govt.nz
    1 week ago