The Truth About Merit Raises: If Your Manager Can’t Explain It, They Didn’t Think It Through

Merit Season Is Here—Do You Know How Your Raise Was Decided?

If you’re receiving a merit increase this year, you might be wondering:

• Is this fair?

• How was this decision made?

• What should I do if I’m disappointed?

Most people assume that merit raises are strictly about performance. In reality, they’re shaped by a mix of budgets, company priorities, and manager decisions. And one of the biggest indicators of whether your pay was determined thoughtfully? 🔥 Your manager’s ability to explain it.

Managers Control More Than You Think

It’s a common misconception that HR makes all the pay decisions. In reality, managers own the budget and make the calls on how raises are distributed.

❌ Bad managers blame HR or “company policy.”

✅ Good managers take ownership, explain their decisions, and advocate for their employees.

A well-prepared manager should be able to tell you:

✔️ Where you fall within your pay range—and why

✔️ How your contributions influenced the decision

✔️ What factors (budget, performance, market shifts) shaped your increase

✔️ What you can do to position yourself for a larger raise next time

If a manager can’t answer these questions confidently, they aren’t thinking about pay decisions strategically.

Compensation Isn’t Limitless—Trees Don’t Grow Into the Sky 🌳

A critical reality of pay that most employees don’t hear enough:

📌 The closer you are to the top of your pay range, the smaller your raises will be.

📌 That doesn’t mean you’re underpaid—it means you’re reaching the ceiling for your role.

This is where understanding pay structures is essential. Every job has a value in the market and within a company. Raises aren’t infinite, and if you want to increase your long-term earning potential, you need to move into a higher-paying role.

And that? That’s on you.

Want a Bigger Paycheck? You Need a Bigger Role.

Salary growth doesn’t just happen because you’ve put in another year. If you want to move beyond incremental raises, you need to:

✔️ Build new skills that align with higher-level roles

✔️ Take on bigger responsibilities that prove your readiness

✔️ Increase your visibility—make sure the right people see your impact

✔️ Make a clear case for your promotion

Raises within a range will slow down over time. If you want to break through to the next level, your growth has to come from more than tenure—it has to come from impact.

Not Happy With Your Raise? Here’s What to Ask Next.

If your raise was lower than expected, it’s time for a strategic conversation. Instead of reacting emotionally, ask:

❓ Where do I currently fall within my pay range, and why?

❓ What factors influenced your raise this cycle?

❓ What would I need to demonstrate to move higher in the range or position myself for a higher-level role?

These aren’t just questions about this year’s raise—they’re questions that position you for long-term financial growth.

Compensation Shouldn’t Be a Mystery.

⚠️ If your manager can’t answer these questions, they aren’t thinking about pay decisions intentionally.

🚩 And that’s a leadership problem.

Pay decisions impact employee trust, retention, and engagement. When compensation conversations are transparent and strategic, employees gain clarity and agency over their careers.

👉 Have you ever had a manager who handled a compensation conversation really well (or really poorly)? Drop your experience in the comments!