# Insights Gained from a Salary Increment Meeting Experience
Written on
Understanding Meeting Dynamics
In the corporate world, not all meetings hold equal value. Some executive gatherings can feel like a drain on time, lacking any significant outcomes. Think about meetings focused on strategic direction, budget resets, or austerity measures. You participate to stay informed, but often, the results are surprising—at least you leave knowing something new.
However, salary increment meetings are a different story altogether. They embody a unique dynamic that demands attention.
I make it a priority to attend two specific types of meetings: those concerning promotions and salary increments. The rationale is straightforward: decisions made in these sessions have far-reaching implications for everyone involved. Understanding how bonuses are allocated and who benefits from salary increases is crucial.
I've often pondered why those who work tirelessly, without complaints, sometimes receive less favorable compensation or miss out on promotions. My curiosity drives me to seek answers.
To my surprise, I discovered that the process for finalizing salary increments is much quicker than I anticipated. I had assumed it would take weeks or even months, but it turns out it happens in a single meeting.
My supervisor, Angel, and our Chief Revenue Officer joined the discussion, alongside the Chief Financial Officer (CFO), who kicked off the meeting by establishing the total budget available for distribution.
The meeting was surprisingly brief, lasting only 90 minutes. We reviewed various data points, including the total revenue for the year and projected global GDP growth.
Allow me to clarify: senior executives are excluded from salary increments from the outset. They receive compensation through stock dividends. Additionally, the sales team operates on a quarterly commission basis, which means they, too, are not included in this discussion.
The total amount available for salary increments was displayed on a screen, and the CFO presented the calculations behind it. We reached a consensus quickly; the mandate was a unanimous agreement.
Naturally, as a junior executive, I chose to remain silent rather than risk being seen as troublesome. This platform serves as a means for C-Suite members to verify that the proposed figures align with their departmental budgets before giving the green light.
The process was efficient and systematic, taking merely ten minutes to finalize the figures.
Allocation of Salary Increments
The next topic was the distribution of the available funds. This process is straightforward, yet it involves some strategic maneuvering.
The initial step is to establish a global benchmark percentage that everyone can accept. This figure doesn’t necessarily need to be logical or relevant; it merely needs to sound credible to give the impression of thorough market analysis.
The CFO stated, "This year, we expect our company's performance to align with a global GDP growth of 4%. To remain competitive, I suggest we set our benchmark salary increment at 4%. Are there any objections?"
At this point, voicing any dissent would be unwise. The implication is clear: we aim to stay competitive in the market, and with GDP growth projected at 4%, there’s no room for argument.
Once the benchmark is accepted, the CFO outlines exclusions. “We’ll implement an average increment of 4%. Please note that this is separate from discussions about sales commission tiers and dividend payouts. Let’s continue.”
Interestingly, multiple representatives from the sales department were present at this meeting, even though senior executives, who hold company stock, have no vested interest in these increments.
The challenge now lies in the distribution process. This is where we differentiate between high achievers and those who contribute less, often revisiting performance evaluations.
As expected, not everyone will receive the full 4% increment. High-performing non-promotees receive the highest raises of 7.5%, while above-average performers get 6%, average performers receive 4%, and those who are underperforming get nothing.
Performance banding plays a vital role here: the top 10% receive 7.5%, the next 25% get 6%, the following 55% obtain 4%, and the bottom 10% receive 0%.
In essence, the top performers are rewarded at the expense of those at the bottom. This approach aims to keep high achievers motivated while providing a nudge to those who need improvement.
The Definition of Top Performers
The label of "top performer" varies across the organization. Just because someone is recognized as a top performer doesn't guarantee they will receive the highest increment.
Sometimes, we find ourselves with more top performers than anticipated, leading to a tricky situation.
This scenario often raises the uncomfortable question: "Who is this individual? What have they accomplished?"
This inquiry is one you want to avoid during salary discussions—it's often a precursor to unfavorable outcomes.
Executives might favor someone they know over an under-recognized employee.
For example, if someone like Nicholas is omitted from the discussion, it could lead to a shift in favor of someone else.
To navigate this landscape, it's beneficial to foster connections across the workplace. A simple greeting to a colleague could positively influence your standing during these critical meetings.
Conclusion of the Meeting
The meeting concluded in just under 90 minutes, with many executives leaving without much fanfare. For them, it was just another day, another meeting.
Personally, I gained valuable insights from this experience. There are numerous ways to benefit within the company, and salary increments are just one avenue.
Fortunately, my position in sales allows me to advocate for my commissions without the risk of being excluded from the decision-making process.
If you found this narrative insightful, consider subscribing for more content! And if you feel generous, you can treat me to a cup of black coffee too! Thank you!