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performance review process

Last post 02-27-2012 8:52 PM by bridget99. 57 replies.
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  • 02-21-2012 3:28 PM

    performance review process

    The company just got finished revamping the yearly performance review process.  The whole system has been streamlined and moved online!  Well, except that HR isn't comfortable with digital signatures.  So now every employee has to print out the documents they just filled out online, sign them, take them to hr, and then hr will scan the document and upload the scanned document back into the system.
  • 02-21-2012 3:37 PM In reply to

    Re: performance review process

    What, no wooden table?

    “The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected. Even when the revolutionist might himself repent of his revolution, the traditionalist is already defending it as part of his tradition. Thus we have two great types -- the advanced person who rushes us into ruin, and the retrospective person who admires the ruins. He admires them especially by moonlight, not to say moonshine. Each new blunder of the progressive or prig becomes instantly a legend of immemorial antiquity for the snob. This is called the balance, or mutual check, in our Constitution.”

    -- G. K. Chesterton
  • 02-21-2012 4:13 PM In reply to

    Re: performance review process

    I stopped doing performance review at my company. I was hoping that someone would notice and ask me why, then I could reply, "for the last 3 years, my managers have all been completely incompetent, so the performance review system obviously doesn't work". But... as it turns out, nobody even noticed.

    Now I regret doing it all those previous years. What a waste of time.

      <-  I couldn't make my shit work, so here's a Godzilla head.
  • 02-21-2012 4:32 PM In reply to

    Re: performance review process

    blakeyrat:
    I stopped doing performance review at my company. I was hoping that someone would notice and ask me why, then I could reply, "for the last 3 years, my managers have all been completely incompetent, so the performance review system obviously doesn't work". But... as it turns out, nobody even noticed.

    Now I regret doing it all those previous years. What a waste of time.

    Disclaimer: I've been contracting for years, and have never been through a performance review.

    Wouldn't not doing the review prevent you from ever getting a raise?

  • 02-21-2012 4:46 PM In reply to

    Re: performance review process

    C-Octothorpe:

    Disclaimer: I've been contracting for years, and have never been through a performance review.

    Wouldn't not doing the review prevent you from ever getting a raise?

    Here's the rub at this place.  They don't do performance raises and the boss has already told us no one is getting fired.  So I think the only reason they do them here is for beaurocratic bs and/or legal reasons.

  • 02-21-2012 4:47 PM In reply to

    Re: performance review process

    blakeyrat:
    I stopped doing performance review at my company. I was hoping that someone would notice and ask me why, then I could reply, "for the last 3 years, my managers have all been completely incompetent, so the performance review system obviously doesn't work". But... as it turns out, nobody even noticed.

    Now I regret doing it all those previous years. What a waste of time.

     

    Performance reviews are mandatory at our place with initial nagging turning to threats of withholding our bonus.  They can do this apparently because one of the conditions for receiving your bonus is that you've done your review.  Our system is, at least, fully electronic with no wooden tables required.  It's all authenticated through AD. 

    I've put less and less effort into mine once it became clear that the whole process is bullshit.  Nothing ever comes from the things you say in it and we have a black-hole process whereby the grades you agree with your manager (from 7 (bad) to 1 (mega-awesome)) are always (and for everyone I've ever worked with) "normalised" to average.  No-one is ever told who, if anyone, gets normalised to an above average grade.

     

    C-Octothorpe:
    Wouldn't not doing the review prevent you from ever getting a raise?
     

    We are told repeatedly that performance review is not linked to salary review.

     

    Certified Internet Engineer (CIE)

  • 02-21-2012 4:48 PM In reply to

    Re: performance review process

    Peraninth:

    C-Octothorpe:

    Disclaimer: I've been contracting for years, and have never been through a performance review.

    Wouldn't not doing the review prevent you from ever getting a raise?

    Here's the rub at this place.  They don't do performance raises and the boss has already told us no one is getting fired.  So I think the only reason they do them here is for beaurocratic bs and/or legal reasons.

    So what do they base your raise on then?  I thought how it works is that you will always get a raise, but the percentage is based on performance.  Say you had a shit year, only 3%, but if you had an awesome year and saved four puppies, then its 7%, etc...  I'm sure it varies from company to company, but I thought it was along those lines.
  • 02-21-2012 4:58 PM In reply to

    Re: performance review process

    C-Octothorpe:
    Wouldn't not doing the review prevent you from ever getting a raise?
    I can't speak for other companies.

    Here, I get a small "cost of living" raise every year, which may or may not be tied to my performance review. (This is the first year I haven't done one, and it's only February so I don't know for sure.)

    The big raises I only get after moving job positions/changing titles-- for example I got a huge raise late last year after an executive (whose son of one of my best friends) found out I was interviewing at other places. He shuffled me from one department into another, and in the process my payscale went up many times more than several years' worth of "cost of living" raises would account for.

      <-  I couldn't make my shit work, so here's a Godzilla head.
  • 02-21-2012 4:58 PM In reply to

    Re: performance review process

    C-Octothorpe:
    So what do they base your raise on then?  I thought how it works is that you will always get a raise, but the percentage is based on performance.  Say you had a shit year, only 3%, but if you had an awesome year and saved four puppies, then its 7%, etc...  I'm sure it varies from company to company, but I thought it was along those lines.

    At this company, you do not get yearly raises.  If you stay for x (x being undefined) years, then they will give you a raise of y (y being undefined).  If a position above yours opens up and you apply for and get that position, then you get a raise.  They also wonder why they have a hard time retaining employees.

  • 02-21-2012 5:28 PM In reply to

    Re: performance review process

    C-Octothorpe:
    Say you had a shit year, only 3%, but if you had an awesome year and saved four puppies, then its 7%, etc...
    The difference between the worst employee and the best employee is 3.88%? That's rather depressing.
    God has cursed the blind.

    "I confess. I've always been a humorist. It is not an accident that the Flounder is usually shown with a smile."
  • 02-21-2012 7:31 PM In reply to

    Re: performance review process

    Wait, people still get raises? I've never heard of anyone I know getting a raise, at least in IT. Isn't that why we all move jobs every eighteen months or so at most?

    Multiple times I've said 'give me a raise or I'm leaving' and been told 'go on then' only to walk out the door and immediately get a job paying more than I was asking for in the old position.

    And no, it's not just because I'm a git that they were pleased to see the back of me. I've never worked anywhere anyone else (on the IT side) got a raise either - well, excluding the kids who came in on minimum wage, and got an extra few pence an hour after they finished their probation.

    Obviously it's different when people are promoted or change roles, but outside that I've never heard of pay-rises for long-term employees, and I've barely met a long-term-at-one-company employee.

  • 02-21-2012 7:40 PM In reply to

    Re: performance review process

    fterfi secure:
    Wait, people still get raises? I've never heard of anyone I know getting a raise, at least in IT.
    Hmm, seems quite normal to me.

    fterfi secure:
    Isn't that why we all move jobs every eighteen months or so at most?
    Usually it's to avoid prosecution..
    God has cursed the blind.

    "I confess. I've always been a humorist. It is not an accident that the Flounder is usually shown with a smile."
  • 02-21-2012 8:46 PM In reply to

    • PJH
    • Top 10 Contributor
    • Joined on 02-14-2007
    • Newcastle, UK
    • Posts 3,836

    Re: performance review process

    morbiuswilters:
    fterfi secure:
    Wait, people still get raises? I've never heard of anyone I know getting a raise, at least in IT.
    Hmm, seems quite normal to me.
    Same here. Both current and last job.
    "Because you watched 'The Very Hungry Caterpillar,' we recommend 'The Human Centipede.'"
    --
    UED - Countryside: To kill Piers Morgan
  • 02-21-2012 9:15 PM In reply to

    Re: performance review process

    fterfi secure:
    Wait, people still get raises? I've never heard of anyone I know getting a raise, at least in IT. Isn't that why we all move jobs every eighteen months or so at most?

    Multiple times I've said 'give me a raise or I'm leaving' and been told 'go on then' only to walk out the door and immediately get a job paying more than I was asking for in the old position.

    That's basically exactly what I'm doing, with the important difference is that none of my "moves" are out of the company. (YET!)

    One of the advantages of being the ONLY COMPETENT DEVELOPER who works here is that I know a ton of Director-level and up people, and I can call-in a lot of favors. "Hey remember that time I saved your project that was about to launch with zero analytics coverage? Yeah, give me a Ferrari." That kind of stuff.

      <-  I couldn't make my shit work, so here's a Godzilla head.
  • 02-21-2012 10:03 PM In reply to

    Re: performance review process

    fterfi secure:
    Wait, people still get raises? I've never heard of anyone I know getting a raise, at least in IT. Isn't that why we all move jobs every eighteen months or so at most?
    I get annual raises at my company, usually a bit above the CPI. And I don't move jobs every 18 months - in fact I've been here (in various roles) for almost 9 years now. A little over 9 years if you count the 7 months I spent working here via a temp agency.
  • 02-22-2012 5:23 AM In reply to

    Re: performance review process

    Peraninth:
    I think the only reason they do them here is for beaurocratic bs and/or legal reasons.

     

    Too true, in my last job we had had three different review processes in five years and they only bothered with it at all because the size of the organisation meant they had to demonstrate that they were helping staff with there 'development'.

    The pay scale was split into bands, the job put you in a certain band, usually starting at the bottom. First couple of years you were guaranteed one increment even if you did nothing to deserve but every year including those first couple you could get more increments for doing a good job.

    The pay scale was also revised annually to reflect cost of living.

    First couple of years, a single annual review each year. "What have you done for me?" - "I did all this sir." - "Nice one, have an increment, see you next year."

    Then they bought in this 'Personal Development Review' and called the old review 'Reward Management', I know had alternate reviews every six months. One was to demonstrate to the boss the extra jobs I was doing and the quality of my work to get a raise, one was just about training and skills, what courses did I plan to go on in the next year, what meaningless Microsoft certificate would the company pay for this time.

     

    Then, they rolled the two reviews together so I was back to one a year but it worked like this:

    The boss would set goals for the year, the next year he'd compare my achievements to the goals. If you achieved the goals on his list, you might get to stay where you are.

    If you went 'above and beyond' you might even get a raise, however no clear criteria for what this entailed were ever set.

     

    So basically the boss would set goals that would never be achieved, even if they were, because these were just the goals to keep your job and there were no 'second level' goals defined for a proper raise or dare anyone even suggest, a promotion, you could never get one no matter how much you did. This all came about because there wasn't enough money to give the underlings a raise amounting to a few hundred pounds a year and still be able to give the boss a raise equal to my entire salary.

     

    It was a carrot and stick exercise and everyone knew it, even the boss started to get bored of going through the motions and we ended up having interviews like "What have you done for me?" - "In between picking my nose and downloading porn I cured cancer sir." - "Nice one, you can't have an increment because we don't have any money, see you next year.". So long as we both signed the form to say the review had been done, no-one really gave a shit.

     

    P.S. Other things my previous employer did for legal reasons:

    "Diversity Training" or "How not to be a racist" or "Don't worry you can be a racist if that's the kind of person you are but if anyone complains they can't take action against us because at least we told you not to."

    "Ergonomics Training" or "How to use a chair" or "Sitting at that computer all day is probably going to make you fat, hurt your back, warp your eyes or give you some kind of RSI type thing. Please don't sit funny, eat too much and not exercise enough, or look at your screen for too long in one go... there, now if you get ill its not our fault because we told you so."

    "Fire Training" or "How not to burn to death" or "If something is on fire, put it out or run away. There, if you die in a fire that's not our fault either."

    "Unix Level 1" or "How to write a bash script" or "We have to spend the training budget or the higher ups will have a go for not working on your 'development'"

    "Secure IT Disposal" - Actually, this one is a WTF in itself so I'll leave ranting about it for another thread. :)

     

     

     

  • 02-22-2012 9:09 AM In reply to

    • Anketam
    • Top 150 Contributor
    • Joined on 10-12-2011
    • Nar Shaddaa
    • Posts 484

    Re: performance review process

    For a moment there I thought you were talking about my company.

    But we do not have "Fire Training"; however we do have:

    "Work Place Violence" - Has some quite hilarious scenes in the training

    "Bribery" - Aparantly it is not ok for us to bribe government officials with large stacks of monies or to take large stacks of money in very conspicuous suit cases.

    Project Manager: I don't know. I'm not allowed to talk directly to the customer. Apparently my grip on reality is too tight.
    - Weng
  • 02-22-2012 9:34 AM In reply to

    • serguey123
    • Top 25 Contributor
    • Joined on 09-30-2010
    • Candyland (formely known as Corruptsylvania)
    • Posts 1,789

    Re: performance review process

    EncoreSpod:

    "Diversity Training" or "How not to be a racist" or "Don't worry you can be a racist if that's the kind of person you are but if anyone complains they can't take action against us because at least we told you not to."

    "Fire Training" or "How not to burn to death" or "If something is on fire, put it out or run away. There, if you die in a fire that's not our fault either." 

    Anketam:

    "Work Place Violence" - Has some quite hilarious scenes in the training

    This three I get as well as

    WMD training: how to survive when them crazy people try to kill us all

    Other work specific training: how to bore us to death on different topics (some speakers are actually good but those are few and in between)

    #100085 +(531)- [X]

    <jome> I suppose there are bad coders, there are really bad coders, there are fucking retards, and there's coders writing lines like this: $resultscode = $resultscode - 0;


  • 02-22-2012 10:09 AM In reply to

    Re: performance review process

    EncoreSpod:

    Then, they rolled the two reviews together so I was back to one a year but it worked like this:

    The boss would set goals for the year, the next year he'd compare my achievements to the goals. If you achieved the goals on his list, you might get to stay where you are.

    If you went 'above and beyond' you might even get a raise, however no clear criteria for what this entailed were ever set.

     

    So basically the boss would set goals that would never be achieved, even if they were, because these were just the goals to keep your job and there were no 'second level' goals defined for a proper raise or dare anyone even suggest, a promotion, you could never get one no matter how much you did. This all came about because there wasn't enough money to give the underlings a raise amounting to a few hundred pounds a year and still be able to give the boss a raise equal to my entire salary.

     

    It was a carrot and stick exercise and everyone knew it, even the boss started to get bored of going through the motions and we ended up having interviews like "What have you done for me?" - "In between picking my nose and downloading porn I cured cancer sir." - "Nice one, you can't have an increment because we don't have any money, see you next year.". So long as we both signed the form to say the review had been done, no-one really gave a shit.

    I wonder if you and I worked for the same company?
    Strangers with this kind of honesty make me go a big rubbery one.
  • 02-22-2012 10:20 AM In reply to

    Re: performance review process

    Smitty:
    I wonder if you and I worked for the same company?
    I wonder if "I wonder if we worked for the same company?" is a clever thing to post here, or if we see that stupid cliche in every goddamned thread.

    Grumpy today, sorry.

      <-  I couldn't make my shit work, so here's a Godzilla head.
  • 02-22-2012 10:49 AM In reply to

    Re: performance review process

    Then tell us the WTF that's caused blakeyrat grumpiness! Fodder required!

  • 02-22-2012 12:29 PM In reply to

    Re: performance review process

    morbiuswilters:
    C-Octothorpe:
    Say you had a shit year, only 3%, but if you had an awesome year and saved four puppies, then its 7%, etc...
    The difference between the worst employee and the best employee is 3.88%? That's rather depressing.

    In my experience, that's what happens when pay raises are controlled by bureaucracies or solely by Human Resources.
  • 02-22-2012 12:57 PM In reply to

    • Tim G
    • Not Ranked
    • Joined on 01-27-2011
    • Posts 12

    Re: performance review process

    Our process is pretty fucked up.  We have twice-yearly reviews with our immediate supervisor for setting our "SMART goals" (I'll spare you the origin of the acronym).  At the end of the year, they figure out how much they want to add in salaries for the whole company, a number which has for umpteen years straight been 3%. Then they tell each manager "take this 3%, and if you have anyone who you've scored very highly, you can give them 4%. But that 4% has to be balanced by a giving a 2% to someone else in your department." Never mind that the math is totally fucked up on that for a second.  If you're promoted, you get the 4%, but again that comes at the expense of some else in your department.  Not that performance matters much anyways because the raises come before the final review period is actually finished.

    Which is all bad enough, but then you get to my "department," IT. It's just me and my boss (who's mostly my boss in name only as we have non-overlapping areas of control and expertise).  I can't be promoted, because it's just me and the boss.  If you're still following along, I get 3% no matter what..  I pointed this out to him and he said "maybe we can hire someone who's no good at their job and who we don't like very much."  Fortunately he laughed when I replied "or I can frame you for embezzlement or something."

    (And yes, I'm on my way out.)

  • 02-22-2012 1:35 PM In reply to

    Re: performance review process

    We have SMART goals here too. If SMART isn't the most misleading acronym ever, it has to at least be in the Top 10.

    “The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected. Even when the revolutionist might himself repent of his revolution, the traditionalist is already defending it as part of his tradition. Thus we have two great types -- the advanced person who rushes us into ruin, and the retrospective person who admires the ruins. He admires them especially by moonlight, not to say moonshine. Each new blunder of the progressive or prig becomes instantly a legend of immemorial antiquity for the snob. This is called the balance, or mutual check, in our Constitution.”

    -- G. K. Chesterton
  • 02-22-2012 2:29 PM In reply to

    Re: performance review process

    Tim G:
    then you get to my "department," IT. It's just me and my boss (who's mostly my boss in name only as we have non-overlapping areas of control and expertise).  I can't be promoted, because it's just me and the boss.  If you're still following along, I get 3% no matter what..  I pointed this out to him and he said "maybe we can hire someone who's no good at their job and who we don't like very much."  Fortunately he laughed when I replied "or I can frame you for embezzlement or something."

    I trust you had the foresight to be wearing a wire when he said that, which means that next year you get the 4%.

  • 02-22-2012 2:45 PM In reply to

    • Tim G
    • Not Ranked
    • Joined on 01-27-2011
    • Posts 12

    Re: performance review process

    da Doctah:
    I trust you had the foresight to be wearing a wire when he said that, which means that next year you get the 4%.

    Alas, no.  Instead when he says to me "we should really do your review so HR doesn't get after me," I say "sure, but as you know I'm busy the next week or so.  Let's touch base after that."  And he says, "well I think you're doing a hell of a job.  But you know, I have to do the paperwork."  We do that every 3-4 weeks and we've now avoided the 6-month review for something like 16 months.

  • 02-22-2012 2:45 PM In reply to

    Re: performance review process

    Government union here. Aside from yearly COL increases, there's also a yearly Pay grade step increase, up to step 5. Our last contract netted us 19.5% COL increase over 5 years, which was ratified back in October '08, about two weeks before the economy took a dump. At that time, we were without a contract since January 2007. We're without a contract since the beginning of this year so no raise, but it'll probably follow the standard (now) 3, 3.5, 4% increase three year cycle once it gets finalized. We'll get back pay since the beginning of the year for whatever the amount is.

  • 02-22-2012 3:52 PM In reply to

    Re: performance review process

    PedanticCurmudgeon:
    If SMART isn't the most misleading acronym ever, it has to at least be in the Top 10.

    The problem is not the acronym, but those that use it - who aren't too smart, ironically...

  • 02-22-2012 7:46 PM In reply to

    • Kittemon
    • Top 500 Contributor
    • Joined on 08-15-2011
    • Portland (the one on the coast)
    • Posts 106

    Re: performance review process

    blakeyrat:
    I wonder if "I wonder if we worked for the same company?" is a clever thing to post here, or if we see that stupid cliche in every goddamned thread.
    I wonder if we read the same forum?
  • 02-22-2012 9:52 PM In reply to

    Re: performance review process

    The thing that has always amused me about COLA increases is that they are only necessary because they exist in the first place.
  • 02-22-2012 9:56 PM In reply to

    Re: performance review process

    too_many_usernames:
    The thing that has always amused me about COLA increases is that they are only necessary because they exist in the first place.
    Oh look, it's somebody who doesn't understand the money supply!
    God has cursed the blind.

    "I confess. I've always been a humorist. It is not an accident that the Flounder is usually shown with a smile."
  • 02-22-2012 10:23 PM In reply to

    Re: performance review process

    morbiuswilters:
    Oh look, it's somebody who doesn't understand the money supply!

    How do you think most of the money supply actually gets distributed so that the overall price levels go up?

  • 02-23-2012 12:24 AM In reply to

    Re: performance review process

    too_many_usernames:
    The thing that has always amused me about COLA increases is that they are only necessary because they exist in the first place.
    Wait, what?

    Are you actually saying that if every company stopped giving raises, the inflation rate would be steady at zero?

      <-  I couldn't make my shit work, so here's a Godzilla head.
  • 02-23-2012 12:50 AM In reply to

    Re: performance review process

    EncoreSpod:

    "Diversity Training" or "How not to be a racist" or "Don't worry you can be a racist if that's the kind of person you are but if anyone complains they can't take action against us because at least we told you not to."

    "Ergonomics Training" or "How to use a chair" or "Sitting at that computer all day is probably going to make you fat, hurt your back, warp your eyes or give you some kind of RSI type thing. Please don't sit funny, eat too much and not exercise enough, or look at your screen for too long in one go... there, now if you get ill its not our fault because we told you so."

    "Fire Training" or "How not to burn to death" or "If something is on fire, put it out or run away. There, if you die in a fire that's not our fault either."

    "Unix Level 1" or "How to write a bash script" or "We have to spend the training budget or the higher ups will have a go for not working on your 'development'"

    "Secure IT Disposal" - Actually, this one is a WTF in itself so I'll leave ranting about it for another thread. :)

    I once had to shit through FISH! because a friend of the boss discovered it somewhere and thought we HAD to watch it. To this day I'm not sure how exactly it's supposed to help. I suspect I'm not dumb enough to fully appreciate it.

     

  • 02-23-2012 5:35 AM In reply to

    Re: performance review process

    blakeyrat:
    too_many_usernames:
    The thing that has always amused me about COLA increases is that they are only necessary because they exist in the first place.
    Wait, what?

    Are you actually saying that if every company stopped giving raises, the inflation rate would be steady at zero?

    VOTE RON PAUL
    this post is bossy
  • 02-23-2012 8:01 AM In reply to

    Re: performance review process

    blakeyrat:
    too_many_usernames:
    The thing that has always amused me about COLA increases is that they are only necessary because they exist in the first place.
    Wait, what?

    Are you actually saying that if every company stopped giving raises, the inflation rate would be steady at zero?

    I think he's saying if all companies agree to stop giving raises, the inflation problem will be solved.

  • 02-23-2012 8:59 AM In reply to

    Re: performance review process

    blakeyrat:
    Are you actually saying that if every company stopped giving raises, the inflation rate would be steady at zero?

    No, but it would have some small upper bound. If companies stopped giving raises, the inflation rate would likely turn negative (deflation).

    There are only a very few mechanisms by which prices of enough goods can increase to constitute inflation:

    1. Some small percentage of the population has a large stockpile of cash and decides to buy a lot of goods and services. This will increase prices as long as the cash stockpile exists, but if the overall population doesn't have increased income, the higher price levels cannot be sustained.
    2. Everyone in the population gets an increase in income. This will result in a small one-time increase in consumption, but then prices will increase and there will be inflation as things reach a new equilibrium (assuming no technological advances in the meantime). The population will be no better off than they were before the price changes.
    3. Some disaster strikes, meaning that even with a fixed money supply, overall standard of living is reduced and the prices of all goods have increased, but individuals have less than they had before the price increases.

    Reality is generally always a combination of these, but inflation generally cannot be sustained if there is no increase in nominal salary. I do understand that inflation is always just a nominal thing - there is a substantial difference between nominal inflation and real inflation. Note of the above scenarios, only item 3 results in "real" inflation; all the rest involve price level changes with no substantial change in the standard of living for the general population.

    I personally feel that at least the US economy is in situation 1 because the market involving US dollars is now dominated by foreign entities with large stockpiles of cash (or equivalent) and they are buying up resources; prices go up, but the US residents can't afford the higher prices, so they must do with less. The perfect example is gasoline: US demand for gasoline has dropped over the past few years (I think we're down to 2007 levels now) but the price is as high with Brent crude at ~$120/bbl as it was when Brent was about $150/bbl. The gasoline exporters are making a mint, because they are able to sell to those that have a cash stockpile.

    An odd phenomenon happens though: if US customers do not get a pay increase, then even though they pay more for gasoline, they have less to spend on other things, so the price of some other goods must fall because of reduced demand; this cannot therefore be "local" inflation.

    As with most things, "inflation" is much more complex than "money supply goes up, prices go up." Simply thinking that is naive - history has shown that it's even possible for money to supply to increase and have deflation if population is growing rapidly or there is significant technological advance - when there is real wealth generation (overall increase in standard of living), money supply can increase without an increase in price level.

  • 02-23-2012 9:06 AM In reply to

    Re: performance review process

    Cassidy:

    PedanticCurmudgeon:
    If SMART isn't the most misleading acronym ever, it has to at least be in the Top 10.

    The problem is not the acronym, but those that use it - who aren't too smart, ironically...

    Exactly.

    “The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected. Even when the revolutionist might himself repent of his revolution, the traditionalist is already defending it as part of his tradition. Thus we have two great types -- the advanced person who rushes us into ruin, and the retrospective person who admires the ruins. He admires them especially by moonlight, not to say moonshine. Each new blunder of the progressive or prig becomes instantly a legend of immemorial antiquity for the snob. This is called the balance, or mutual check, in our Constitution.”

    -- G. K. Chesterton
  • 02-23-2012 9:08 AM In reply to

    Re: performance review process

    too_many_usernames:
    morbiuswilters:
    Oh look, it's somebody who doesn't understand the money supply!

    How do you think most of the money supply actually gets distributed so that the overall price levels go up?

    Given that the Fed expands the money supply by purchasing U.S. bonds, it's a safe bet that the new money is distributed by the government.

    “The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected. Even when the revolutionist might himself repent of his revolution, the traditionalist is already defending it as part of his tradition. Thus we have two great types -- the advanced person who rushes us into ruin, and the retrospective person who admires the ruins. He admires them especially by moonlight, not to say moonshine. Each new blunder of the progressive or prig becomes instantly a legend of immemorial antiquity for the snob. This is called the balance, or mutual check, in our Constitution.”

    -- G. K. Chesterton
  • 02-23-2012 10:18 AM In reply to

    Re: performance review process

    Hm. I definitely think this is moving towards RON PAUL!!!! so I withdraw the question and add too_many_usernames to my mental database of crazy people.
      <-  I couldn't make my shit work, so here's a Godzilla head.
  • 02-23-2012 10:48 AM In reply to

    Re: performance review process

    You should also add too_many_usernames to your mental database of people who mistakenly think they know economics.

    “The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected. Even when the revolutionist might himself repent of his revolution, the traditionalist is already defending it as part of his tradition. Thus we have two great types -- the advanced person who rushes us into ruin, and the retrospective person who admires the ruins. He admires them especially by moonlight, not to say moonshine. Each new blunder of the progressive or prig becomes instantly a legend of immemorial antiquity for the snob. This is called the balance, or mutual check, in our Constitution.”

    -- G. K. Chesterton
  • 02-23-2012 10:54 AM In reply to

    Re: performance review process

    too_many_usernames:
    blakeyrat:
    Are you actually saying that if every company stopped giving raises, the inflation rate would be steady at zero?

    No, but it would have some small upper bound. If companies stopped giving raises, the inflation rate would likely turn negative (deflation).

    There are only a very few mechanisms by which prices of enough goods can increase to constitute inflation:

     

    1. Some small percentage of the population has a large stockpile of cash and decides to buy a lot of goods and services. This will increase prices as long as the cash stockpile exists, but if the overall population doesn't have increased income, the higher price levels cannot be sustained.
    2. Everyone in the population gets an increase in income. This will result in a small one-time increase in consumption, but then prices will increase and there will be inflation as things reach a new equilibrium (assuming no technological advances in the meantime). The population will be no better off than they were before the price changes.
    3. Some disaster strikes, meaning that even with a fixed money supply, overall standard of living is reduced and the prices of all goods have increased, but individuals have less than they had before the price increases.

     

    4. Central banks give out cheap money, causing investors to chase yield by bidding up prices of goods, and simultaneously reducing the purchasing power of holders of that currency.  When #2 does not happen, this is known as "stagflation."  See: 1970s, 2010s.

     

  • 02-23-2012 11:07 AM In reply to

    Re: performance review process

    ShatteredArm:
    4. Central banks give out cheap money, causing investors to chase yield by bidding up prices of goods, and simultaneously reducing the purchasing power of holders of that currency.  When #2 does not happen, this is known as "stagflation."  See: 1970s, 2010s.
    He's a RON PAUL!!! fan. The only thing he responds to is whistles and grunts.

    "Ugh. RON PAUL!!! Ugh. Founder's Intent! Ugh. RON PAUL REVOLUTION!!! Ugh. States' Rights!"

    Like so.

      <-  I couldn't make my shit work, so here's a Godzilla head.
  • 02-23-2012 11:58 AM In reply to

    Re: performance review process

    blakeyrat:
    He's a RON PAUL!!! fan. The only thing he responds to is whistles and grunts.

    I'm a Ron Paul fan and I respond to more than that.  Of course, you don't find me creating an entire post yelling at someone over a miscommunication.
    blakeyrat:

    "Ugh. RON PAUL!!! Ugh. Founder's Intent! Ugh. RON PAUL REVOLUTION!!! Ugh. States' Rights!"

    Constitution! WOOOO
  • 02-23-2012 12:43 PM In reply to

    Re: performance review process

    blakeyrat:
    ShatteredArm:
    4. Central banks give out cheap money, causing investors to chase yield by bidding up prices of goods, and simultaneously reducing the purchasing power of holders of that currency.  When #2 does not happen, this is known as "stagflation."  See: 1970s, 2010s.
    He's a RON PAUL!!! fan. The only thing he responds to is whistles and grunts.

    "Ugh. RON PAUL!!! Ugh. Founder's Intent! Ugh. RON PAUL REVOLUTION!!! Ugh. States' Rights!"

    Like so.

     

    What the hell does any of this have to do with Ron Paul?  Regardless of how inane t_m_r's argument is, it has nothing to do with his support of Ron Paul... Ron Paul would probably scoff at the notion that pay raises have some effect on inflation.

  • 02-23-2012 2:24 PM In reply to

    Re: performance review process

    too_many_usernames:
    Reality is generally always a combination of these, but inflation generally cannot be sustained if there is no increase in nominal salary. I do understand that inflation is always just a nominal thing - there is a substantial difference between nominal inflation and real inflation. Note of the above scenarios, only item 3 results in "real" inflation; all the rest involve price level changes with no substantial change in the standard of living for the general population.
    Inflation is a property of currency. Your definition of real vs. nominal inflation makes no sense.

    too_many_usernames:
    I personally feel that at least the US economy is in situation 1 because the market involving US dollars is now dominated by foreign entities with large stockpiles of cash (or equivalent) and they are buying up resources; prices go up, but the US residents can't afford the higher prices, so they must do with less.
    Yes, the money supply has increased. And, amazingly, it didn't come from employee raises!

    too_many_usernames:
    The perfect example is gasoline: US demand for gasoline has dropped over the past few years (I think we're down to 2007 levels now) but the price is as high with Brent crude at ~$120/bbl as it was when Brent was about $150/bbl. The gasoline exporters are making a mint, because they are able to sell to those that have a cash stockpile.
    Your knowledge of the oil markets is pretty clueless.

    too_many_usernames:
    An odd phenomenon happens though: if US customers do not get a pay increase, then even though they pay more for gasoline, they have less to spend on other things, so the price of some other goods must fall because of reduced demand; this cannot therefore be "local" inflation.
    What? First off, what you just described is local inflation. Second, you completely ignore all the other sources of inflation: government deficit spending (funded by an increase in the money supply); credit expansion (cheap dollars == more consumer credit spending); and money velocity (like those shifty foreigners buying up resources with their USD reserves).

    Worst of all, you seem to think of payroll as some isolated "source" of money. Labor is just another resource, the price inflates when the money supply increases. Now, obviously, employee compensation is part of inflation, but it's not the only part. Swap out goods and services for payroll and see what you have: "If the prices of goods and services didn't increase, then we wouldn't have inflation." It's a meaningless non-statement. COLA raises are a product of inflation, not the primary driver.
    God has cursed the blind.

    "I confess. I've always been a humorist. It is not an accident that the Flounder is usually shown with a smile."
  • 02-23-2012 3:32 PM In reply to

    Re: performance review process

    morbiuswilters:
    COLA raises are a product of inflation, not the primary
     

    I'm willing to revise the wording of my statment to say that COLA raises are a product of inflation, but inflation can only be sustained by raises. Note that I suppose I'd consider credit expansion and cheap dollars as a form of raise.

    If the general population doesn't get raises while the speculators or governments or whomever keeps increasing the prices of goods by generating more cash but not distributing cash to the general population to afford those higher prices, that system will likely suffer some other form of collapse or upheaval.

    I suppose I could state this more succinctly: it's not just more money supply that matters, it's where that money supply is and how it moves around that determines if there is inflation or not.

     

  • 02-23-2012 4:35 PM In reply to

    Re: performance review process

    too_many_usernames:

    morbiuswilters:
    COLA raises are a product of inflation, not the primary
     

    I'm willing to revise the wording of my statment to say that COLA raises are a product of inflation, but inflation can only be sustained by raises. Note that I suppose I'd consider credit expansion and cheap dollars as a form of raise.

    If the general population doesn't get raises while the speculators or governments or whomever keeps increasing the prices of goods by generating more cash but not distributing cash to the general population to afford those higher prices, that system will likely suffer some other form of collapse or upheaval.

    I suppose I could state this more succinctly: it's not just more money supply that matters, it's where that money supply is and how it moves around that determines if there is inflation or not.

     

     

    To invoke the popular car analogy, saying credit expansions and cheap dollars is a form of raise is like saying a car is an economic theory.

  • 02-23-2012 5:19 PM In reply to

    Re: performance review process

    ShatteredArm:
    To invoke the popular car analogy --

    Is there a Godwin's for car analogies?

  • 02-23-2012 5:26 PM In reply to

    Re: performance review process

    Cassidy:

    ShatteredArm:
    To invoke the popular car analogy --

    Is there a Godwin's for car analogies?

    You know who liked to invoke automobile analogies to explain complex, abstract systems, don't you?
    God has cursed the blind.

    "I confess. I've always been a humorist. It is not an accident that the Flounder is usually shown with a smile."
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