Your Performance (and the Company’s): When the salary of an employee is discussed, a commonly heard phrase is “Pay for the Performance.” This means that you may be hired according to your past performance at other jobs. Additionally, if you’re a phenomenal performer at your current job, then the employers may consider raising your salary. On the other hand, if your performance is low or simply normal, then you will not have very good chances of getting a raise.
In the same way, if the company you work for is earning a lot of profit and doing well in the market, then it may be easier for you to benefit from the performance of the company.
Living Expenses: Living expense is a factor that is not directly related to you or the company you work for. Instead, it depends on the local market and factors like the cost or renting or buying a house.
When a salary adjustment is made to reflect the local market, then it is called a cost of living adjustment (COLA). Rises in your salary may change according to inflation.
Do you know your worth as an employee? Do you know what is considered a good salary in your field? If not, then you should research this information to make sure you get the best salary you can.
As we have discussed, there is a compensation philosophy for every organization. But how is it decided, and who decides it?
Many factors are considered when deciding the compensation philosophy of any organization. These factors include the future plans of the organization, performance, accessibility of talent, significance of the role assigned, reputation and fame of the organization, geographical location and many other such factors.
For instance, an organization may not want to raise the pay if it’s not planning to expand and grow. However, if the organization is in need of an important employee who is critical for the growth of the company, then it may pay a higher salary to the prospective employee.
If you want a higher salary, then you can work on making yourself more skilled and talented. Additionally, you can compare your salary with others in your field. For additional help, you can use the online Glassdoor salary estimator.