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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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    Community efforts to create a Predator Free Whangārei will receive a $6 million boost, Regional Economic Development Minister Shane Jones and Conservation Minister Eugenie Sage announced today. The new funding, through Government company Predator Free 2050 Ltd, will create around 12 jobs while enabling the complete removal of possums over ...
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    5 days ago
  • New Zealand to review relationship settings with Hong Kong
    Foreign Affairs Minister Winston Peters has announced that the New Zealand Government is reviewing the settings of its relationship with Hong Kong. “China’s decision to pass a new national security law for Hong Kong has fundamentally changed the environment for international engagement there,” Mr Peters said. “New Zealand remains deeply ...
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    5 days ago
  • Funding for Whangārei’s infrastructure projects revealed
    Regional Economic Development Minister Shane Jones has announced details of a multimillion-dollar investment in Whangārei for infrastructure projects that will help it recover from the economic fallout from the COVID-19 pandemic. More than 200 jobs are expected to be created through the $26 million investment from the Government’s rejuvenation package ...
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    5 days ago
  • Managed isolation and quarantine update
    Following a second incident in which a person escaped from a managed isolation facility, security is being enhanced, including more police presence onsite, Minister Megan Woods said. “The actions of some individuals who choose to break the very clear rules to stay within the facilities means that more resourcing is ...
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    5 days ago
  • Funding for Kaipara district community waste programmes
    Waste reduction and recycling programmes in Kaipara are set to get a boost with Associate Environment Minister Eugenie Sage today announcing a $361,447 grant from the Ministry for the Environment’s Waste Minimisation Fund (WMF) Sustainable Kaipara. “The new funding will allow Sustainable Kaipara to partner with local schools, kura, community ...
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    5 days ago
  • Government will support the people and economy of Southland
    The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter. “This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New transformational tools for the Predator Free 2050 effort
    New tools being developed to help boost Aotearoa’s Predator Free 2050 effort were unveiled today by Minister of Conservation Eugenie Sage and Under Secretary for Regional Economic Development Fletcher Tabuteau. A new rat poison, a camera with predator recognition software to detect and report predators, a new predator lure and a ...
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    6 days ago
  • New Armoured vehicles for New Zealand Army
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    6 days ago
  • Community-led solutions to prevent family violence
    The Government’s three prevention frameworks to reduce family violence in Aotearoa were launched this week by Associate Minister for Social Development Poto Williams.   The frameworks were developed in partnership with communities around New Zealand, and build on the work the Government has already begun with its new family violence prevention ...
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    6 days ago
  • Govt confirms investment in better radiology and surgical services for Hawke’s Bay
    The Government is pleased to confirm funding for improvements to radiology and surgical services at Hawke's Bay DHB, Health Minister Chris Hipkins says.     "The Minister of Finance the Hon Grant Robertson and former Health Minister Dr David Clark approved funding for Hawke's Bay DHB’s redevelopment of their radiology facilities ...
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    6 days ago
  • Specialist alcohol and drug addiction services strengthened across New Zealand
    •    New funding for four beds at Napier’s Springhill Residential Addiction Centre •    A new managed withdrawal home and community service, and peer support before and after residential care at Tairāwhiti DHB  •    A co-ordinated network of withdrawal management services throughout the South Island •    Peer support in Rotorua and ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Coastal Shipping Webinar
    Introduction, seafarers and POAL Good morning everyone, I am delighted to be online with you all today. Before I begin, I have to acknowledge that COVID-19 has disrupted the maritime sector on an unprecedented scale. The work of seafarers and the maritime industry is keeping many economies around the world ...
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    6 days ago
  • Support for resilient rail connection to the West Coast
    A $13 million investment from Government will create jobs and improve the resilience of the rail connection between Christchurch and the West Coast, Infrastructure Minister Shane Jones and Regional Economic Development Under-Secretary Fletcher Tabuteau say. The funding comes from the tagged contingency set aside in Budget 2020 for infrastructure projects ...
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    6 days ago
  • Major investment in safe drinking water
    The Government is investing $761 million to assist local government upgrade under-pressure water services across the country, Prime Minister Jacinda Ardern and Local Government Minister Nanaia Mahuta announced today.  The announcement was made at the site of the water bore that was found to be the source of the fatal ...
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    6 days ago
  • Supporting stranded seasonal workers to keep working with more flexible options
    Recognised Seasonal Employers and migrant seasonal workers stranded in New Zealand will be able to continue working and supporting themselves with more flexible hours and roles, says Immigration Minister Iain Lees-Galloway. The time-limited visa changes are: Stranded RSE workers will be able to work part-time (a minimum of 15 hours ...
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    6 days ago
  • Relief for temporary migrants, employers and New Zealanders who need work
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    BeehiveBy beehive.govt.nz
    1 week ago
  • Freshwater commissioners and fast-track consenting convenor appointed
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    1 week ago
  • Appointment of Judge of the High Court
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    1 week ago
  • Feedback sought – Commercial Film and Video Production Facilities
    The Associate Minister for Greater Christchurch Regeneration, Poto Williams, is seeking feedback on a proposal to better enable the development and operation of commercial film and video facilities in Christchurch. The Proposal, developed by Regenerate Christchurch in response to a request from Christchurch City Council, asks that powers under section ...
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    1 week ago
  • Govt launches bold primary sector plan to boost economic recovery
    The Government has launched a bold plan to boost primary sector export earnings by $44 billion over the next decade, while protecting the environment and growing jobs. Prime Minister Jacinda Ardern today released Fit for a Better World – Accelerating our Economic Potential, a 10-year roadmap to unlock greater value ...
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    1 week ago
  • Wellbeing of whanau at heart of new hub
    A new approach to prevent family harm that encourages greater collaboration across government and community groups is being celebrated at the opening of a new facility in Auckland. Prime Minister Jacinda Ardern today opened the Multi-Disciplinary Family Harm Prevention Hub Te Taanga Manawa in Lambie Road in Manukau. The facility ...
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    1 week ago
  • New Report on Auckland Port Relocation
    The Government has released a major new report on the options for relocating the Port of Auckland’s freight operations while deferring any decision on the issue. “That decision needs to be informed by policy analysis that is still to be completed. As a result it will be up to a ...
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    1 week ago
  • Dual place names for Te Pātaka-o-Rākaihautū / Banks Peninsula features
    The history of Rāpaki is being restored through the inclusion of te reo in thirteen official place names on Te Pātaka-o-Rākaihautū / Banks Peninsula and around Lyttelton Harbour/Whakaraupō, the Minister for Land Information, Eugenie Sage, announced today.   “I am pleased to approve the proposals from Te Hapū o Ngāti ...
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    1 week ago
  • Government and Air New Zealand agree to manage incoming bookings
    Bookings for seats on Air New Zealand flights into New Zealand will be managed in the short term to ensure the Government is able to safely place New Zealanders arriving home into a managed isolation or quarantine facility, says Housing Minister Megan Woods.  “Last week Air Commodore Darryn Webb and I ...
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    1 week ago
  • $80 million for sport recovery at all levels
    Grant Robertson has today announced the first major release of funding from the $265 million Sport Recovery Package announced at Budget 2020.  “Today we’re setting out how $80 million will be invested, with $54 million of that over the 2020/2021 financial year for organisations from community level through to elite ...
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    1 week ago
  • Keeping ACC levies steady until 2022
    The Government is maintaining current levy rates for the next 2 years, as part of a set of changes to help ease the financial pressures of COVID-19 providing certainty for businesses and New Zealanders, ACC Minister Iain Lees-Galloway says. “New Zealanders and businesses are facing unprecedented financial pressures as a ...
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    1 week ago