Every January at the hospital, a spreadsheet with about 340 rows landed in my inbox. Each row was a person: name, job title, hire date, current pay, the pay range for the job, last year's rating and an empty column labeled "proposed increase." For the next three weeks, my job as an HR business partner was getting every one of those empty cells filled in by managers, checked and sent up the chain.
Most people believe raises get decided in the review meeting. At both places I worked in HR, a manufacturing plant and then a regional hospital, they almost never were. By the time your manager sat down across from you, the number had usually been approved for weeks. Here's how it actually worked, in three steps.
Step one: the merit budget
Before anyone thinks about you, leadership decides how much money the whole organization will spend on raises, as a percentage of payroll. In the years I'm describing, that number was usually between 3% and 3.5%. At the plant, hourly pay moved on its own wage schedule, so what I'm describing there applied to salaried staff.
That percentage becomes a pool for each manager. If a manager has ten people who make $600,000 combined and the budget is 3%, she has $18,000 to divide. If one person gets 5%, somebody else gets less. That's the part nobody says out loud: raises are a split of a fixed pot, not a reward pulled from thin air.
Step two: the pay band, and where you sit in it
Every job had a pay range, which some places call a band, with a minimum, a midpoint and a maximum. Where you sat in that range mattered almost as much as your rating. HR handed managers a guide grid that looked something like this in a 3% year:
| Rating | Below midpoint | Near midpoint | Above midpoint |
|---|---|---|---|
| Exceeds | 4.5-5.5% | 3.5-4.5% | 2.5-3.5% |
| Meets | 3-4% | 2.5-3% | 1.5-2.5% |
| Below | 0-1% | 0% | 0% |
The exact numbers changed every year, but the shape didn't. Two people with the same rating could get very different raises because one was hired low and the other was already near the top. Above the maximum, base pay usually stopped moving and the raise came as a one-time lump sum instead.
Step three: the spreadsheet your manager fills in
Then the manager fills in the blanks, usually over a couple of evenings, with maybe twenty minutes per person. She's working from memory and her inbox. After that, directors meet to compare ratings across teams, which HR calls calibration. HR checks that the totals fit the pool and flags anything that looks off, like two people in the same job with the same rating and a $9,000 gap in pay. Then it goes up for signatures, and weeks later you get the conversation.
From the HR side, the sentence I heard most in calibration was some version of "I know she's good, but I can't point to anything specific." That sentence cost people money every single year. Not because anyone was cruel, but because the person defending you had nothing in her hands.
So what can you actually do? None of this guarantees a bigger number. What it can do is make sure the person filling in your row isn't working from memory.
- Ask where you sit. Here's the wording I'd use: "Can you tell me the pay range for my position, and roughly where I am in it?" Some companies won't share it. Both of mine would, if asked.
- Ask about timing. "When do merit decisions get made here, and when's the right time to give you input?" The answer tells you when your summary needs to land.
- Send your results before the spreadsheet is due. Not at the review. A short email works: "Before you start on reviews, here's a one-page list of what I did this year, with the numbers."
- If you're near the top of the range, the conversation you need is about a promotion or a different job, not merit. A great rating won't move a maxed-out salary much.
I took my own advice last month and asked my manager when decisions get made at my company. She said, "January, mostly." I wrote it on the inside cover of my planner. I'll report back on how my own cycle goes when it comes around.
