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How do you do salary raises?

We're currently re-thinking of how we are going to do annual raises for our employees. I'd love to hear some ideas around what structures you have in place for your employees? How is one determined? How do you form a budget for that? Is there base vs bonus considerations? How does performance factor into that? What about underpaid or overpaid employees and how are they treated for those purposes? How are department directors contribute to that planning?

Any ideas are welcome as we are struggling to find much of that info online.


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

In the ideal world you would have an overall salary budget, but I have yet to see that really happen.

Assuming no one has employment contracts, then we've (that's management where I have been associated) try to make non-income producing salaries at least hopefully market.

Those that are income producing we tend to make under market but with a bonus plan that would bring them in the short-term to market and hopefully above market based on performance.

Non-income producing people either get an arbitrary amount (like 2 weeks) or a number based on the companies performance or both. Depending on size of company, department directors have input into the arbitrary bonuses (which could also be for income producers).

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