Same scores, different raises; what's fair about Reuters pay?

Let’s say you really worked hard last year and, more importantly, you convinced your boss that you did. So you scored “exceeded,” the company’s second-highest rating, on your appraisal. And you got a 1.25 percent raise, which, you were told, was standard issue for go-getter performers like you who “exceeded” their goals.

You would have joined 51 other “exceeded”-rated Guild-covered employees who got a 1.25 percent raise. But what you probably weren’t told was that even more of your colleagues in the “exceeded” category got bigger raises than you did. And a few others who rated only “achieved” got raises as big, or bigger, than you did.

Thomson Reuters managers have tried to portray their pay system, the centerpiece of the company’s illegally imposed work rules, as the fair and natural extension of a goal-oriented appraisal process that sets a level playing field for all. But in fact, company data show that there were wide unexplained variations in April’s annual pay increases for most employees who received identical ratings.

EVIDENCE OF A SHAM
The data, turned over to the Guild in response to an information request, presents the hardest evidence yet that the imposed pay system, rather than being the hallmark of a meritocracy as management claims, is actually a zero-sum sham in which an amount equaling a meager 1 percent of employees’ total pay was carved up and redistributed to some at the expense of others who achieved identical ratings on their appraisals.

It also shows that even if the flawed appraisal process could be reformed, as the Guild had proposed in the now-stalled contract talks, the discretionary pay system management wants is fraught with favoritism unrelated to work performance.

The Guild initially made the information request to find out, among other things, how much each member got and why. In response, management provided each employee’s appraisal rating, apparently to explain its rationale for the raise.

INFORMATION BEGS NEW QUESTIONS
Given the results, however, the Guild has asked management to explain the reason employees who received the same ratings were given such widely disparate pay increases. In addition, the Guild is analyzing the data for patterns. 

The only employees for whom there was no pay disparity were the three who were told they “did not meet” their goals and the 25 who were told they “partially met” their goals, all of whom received the minimum 0.5 percent raise implemented by management.

But for other groups there was often no correlation between appraisal ratings and raises.

• Of the 245 employees whose appraisals showed they “achieved” their goals, pay raises ranged from 0.5 percent to 2.4 percent. Of this group, half a dozen employees got the same 0.5 percent raise as those who were told they fell short of “achieved.” On the other hand, another five employees in this group got raises as big, or bigger, than nearly half of those who “exceeded” their goals, including one whose raise was bigger than all but one “exceeded” employee and all but two “far exceeded” employees.
• Of the 119 employees whose appraisals showed they “exceeded” their goals, raises ranged from 0.77 percent to 3 percent. Of this group, 29 got raises that were as high, or higher, than half of the employees in the “far exceeded” category.
• Of the 10 employees whose appraisals showed they “far exceeded” their goals, raises ranged from 1.04 percent to 3 percent. What’s the difference between exceeding your goals and far exceeding them? Whatever it is, it had little effect on raises.

Another eight employees who were not rated got raises ranging from 0.5 percent to 1 percent. In response to the Guild’s information request, we were told that several employees “were missed for increases” and that management would follow up soon. Would management have noticed the oversight if we hadn’t asked for the information?

BOTTOM LINE: EVERYBODY LOSES
In total, the raises issued by management in April add up to 1 percent of Guild-represented employees’ payroll. Combined with the benefit cuts in its illegally imposed work rules, the company’s total economic package would cut the compensation of every member of the Guild bargaining unit, even those who “far exceeded” their goals. Those benefit cuts include eliminating the company’s 2 percent 401(k) contribution, higher health care costs and less differential and overtime pay.  

“As we’ve said all along, management is using a so-called merit pay plan and sound bites about a ‘performance-based culture’ as a smokescreen for picking the pockets of every one of our members,” said Newspaper Guild of New York President Bill O’Meara. “This information shows that the raises issued under management’s imposed pay system were discretionary, even if you accept the integrity of the appraisal process, which we don’t.”

Management’s proposal for a discretionary pay system was a key issue in contract talks before management stopped bargaining after declaring impasse on Jan. 19. In an effort to prepare a counterproposal, the Guild had sought information about how management’s proposed pay system was applied to nonunion employees. Most of the information the Guild sought was never provided and is now the subject of one of the five unfair labor practice charges currently under investigation by the National Labor Relations Board.

As previously reported, nearly 20 percent of Guild-represented employees had been paid above the current contract’s pay scales solely because management granted them “merit” pay, despite management’s claim that the contract hampered its plans for a pay structure that would reward employees who it saw as good performers.