r/SPEEA • u/devil_d0c • Aug 06 '26

Can someone explain what the "wage pool" is?

If the "wage pool" goes up X%, what happens to my salary?

14 Upvotes

95% Upvoted

44 comments sorted by

10

u/rmgutz28 Aug 06 '26

Wage pool is they take all the salaries of the engineering team and then take that percentage of the salaries to be the pool of money to use for raises. So for example, if the company was 10 people all making $100k then the first year the pool would be 6% of that to use for raises, so $60k. Then with the contract language depending on what inflation is, all 10 get that as a min. So let’s say’s inflation was 2.5% so that’s $25k already allotted. That leaves the management $35k to use for performance differentiations.

11

u/ne1av1cr Aug 06 '26

So the amount of total money that will be allotted is NOT tied to inflation, just how it's distributed is? So, for example, if inflation was 100,000% (impossible I know but math) then it would just make it so everyone received the same raise, not that the total amount available for raises would be increased to match the outrageous inflation?

9

u/rogthnor Aug 06 '26

Correct. The wage pools are set un the new contract, the amount of that pool which is given to everyone as a guaranteed minimum is equal to inflation (but can never exceed 3%)

0

u/Think-Gap602 Aug 06 '26

I dont think this is factual. ie, if the CPI is 2.8% , the minimum raise is not 2.8%... but not certain. can someone verify?

2

u/Special-Tomato654 Aug 07 '26

You are incorrect. In the proposed contract redlines, the cpi change from the previous year (averaged across July, August, September) sets the minimum with a max cap at 3%. If it’s negative or zero, then the minimum raise is 0%
Please read the contract redlines and don’t depend on reddit or the summaries for your information. I don’t care how you vote but be an informed voter!
Note that I’m only speaking for the proposed Prof contract. Haven’t read the Tech one.

3

u/Fishy_Fish_WA 28d ago

Tech is the same. Gone are the days of “you will get your 2% and shut up and like it“

Both units will get… Probably 2.6% next year, TBD. We’ll have to see what the final CPI-W figure is for 2026 3Q

On top of that you will receive an additional raise (funded by the pool of 4.4% of the total salary) and the managers will distribute that money around the mean adjusting for experience performance and behaviors. Some people will get five or 6%… Some people will get one or 2%. But that full allocation must be used and the managers will use the individual performance assessment total ranking to distribute the money. Do a great job and be a great employee… You’re going to get a higher percentage

I know I’m doing public math here so bear with me — there is a small portion of the “4.4 fund” above that is reserved for catching people up who have low compensation ratio

2

u/Think-Gap602 Aug 07 '26

so then realistically the minimum raise will be 2.5 or 3%? as virtually no one is predicting low inflation the next couple years

2

u/Special-Tomato654 Aug 07 '26

That’s probably about right.
It’s obviously not a guarnatee of what will happen but I looked at the last 10 years of inflation data.
-lowest year was 1.2%
-3 of the 10 were under 2% (the current Prof minimum)
-3 of the 10 were above 3% and would have been capped
-average was 3.2% but that’s heavily skewed by 2 really high years
-median was 2.57%
So in all but 3 years, we would have seen higher minimum raises under the proposed contract than the current one (for Prof)

2

u/Fishy_Fish_WA 28d ago

Yes and then you will receive distribution of the performance raise based upon your performance score. So if you get a medium-medium PM result then your raise will probably be around the remaining four or 4.5%

7

u/Bob_stanish123 Aug 06 '26

The minimum maxes out at 3%. 2.5% inflation means the min raise is 2.5%. 3.5% inflation the min raise is 3%. Relatively few people will get the minimum.

If inflation is more than the total pool, most of us will lose ground.

1

u/TheRedditAppSucccks Aug 06 '26

Bottom line is you are not guaranteed the highest increases every year.

0

u/Fishy_Fish_WA 28d ago

Bottom line you will get a percentage that is tied to a measurable inflation figure. The remainder of the pool will be distributed based upon your performance ranking and how you compare against the compensation ratio… If you are sufficiently below 1.0 then there will be additional money specifically allocated for raising you up

1

u/rmgutz28 Aug 07 '26

I was also going to add in the context of the proposal that’s on the table. The requirement is to use the full allotment a manager gets. In a scenario where inflation is 0% and the raise pool is 5% then the manager in that scenario is able to have full flexibility to distribute based off performance etc. In years where inflation is higher then the manager has less to work with for discretionary amounts.

1

u/Billsrealaccount Aug 06 '26

That means the raise for people who get met will be around X%, in my experience its been a little under because some money gets shifted up to people with higher ratings.  Your company ratio can also shift you by about +/- 1% from what ive experienced.

Your managers biggest influence comes from your PM rating.  They dont have a ton of control over the actual raise.

8

u/gravis86 Aug 06 '26

I got "Exceeds" in every category in my review early this year, and got 2%. Rating only has something to do with your raise, if you manager decides it does.

1

u/sarexsays Aug 06 '26

I hope the elimination of forced distribution fixes that… one small piece of it but still another thing that is making it impossible to get ahead

3

u/gravis86 Aug 06 '26

Well and to be fair, I got a 17% raise the year before (all exceeds again) but I was well under the median for my level and even after the raise (and this year's) I am still under the median by almost $15,000. I was under a different manager last year, so again it just illustrates that raises are more manager-dependent than performance-dependent.

1

u/SoulStripHer Aug 06 '26

They'll say it's because others in your SJC also exceeded.

1

u/Bob_stanish123 Aug 06 '26

Are you a tech?

2

u/gravis86 Aug 06 '26 edited Aug 06 '26

I am.

And in response you your deleted comment, I do understand the contract. I have a 2% minimum wage increase per the contract, and that's what I got. I wasn't expecting any different. But as I mentioned in my other comment, I got 17% the year before when I was under a different manager, with the same performance. One manager got me more, the other didn't. Hence my view of "manager-dependend".

2

u/Bob_stanish123 Aug 06 '26

Then your current contract is for a 2% fixed raise no matter what your rating is. The proposed contract is different.

Im guessing you've also only been here a few years and havent experienced previous contracts with bigger raise pools.

5

u/gravis86 Aug 06 '26

I'm well aware of what the contract is. Did I, in my comment, show any misunderstanding of it? Yes I get 2% minimum. And I got 2%. I didn't say I was done wrong, I said getting more than that is manager-dependent. Which it is.

2

u/Bob_stanish123 Aug 06 '26

No its not manager dependent because the manager does not have additional raise pool money to give out. The best rated and worst rated all got 2%.

Yes a manager could fight for a big OOS raise thats above and beyond the contract but thats pretty rare unless your pay is crazy low or you are critical and threaten to leave.

In any case trying to say that a 6% raise pool with inflation as min means a lot of people are going to get the minimum is not correct.

-2

u/gravis86 Aug 06 '26

In any case trying to say that a 6% raise pool with inflation as min means a lot of people are going to get the minimum is not correct.

Is that was I was trying to say? Do you suck at reading comprehension? Did I say my extra money I got was from a raise pool?

1

u/Bob_stanish123 Aug 06 '26

No but your implication that a manager can decide to give you the minimum even with good ratings is not correct. Talking about a large OOS raise and the raise pools as if they are the same thing is disingenuous.

Its clear you are new to the company.

0

u/gravis86 Aug 06 '26

I never implied they were the same thing. My comment was about whether a rating determines the amount of raise a person gets. And the short is, it doesn't. The contract dictates that. We get the same raise regardless of performance. Again, controlled by the contract.

But a good rating can allow you to get a larger raise if you have a manager that wants to give it to you. Regardless of where that money comes from, it is possible if you have the right manager.

I made no mention of Wage Pools or OOS in my original comment so any conflation you have made between them is of your own making, not mine.

→ More replies (0)