On the one hand, you don't want to bruise egos, but on the other hand, you need to maintain fairness to other employees and don't want to let title/salary inflation cripple your startup.
I don't come to work to be fulfilled. I come to work to be paid.
There's always a better place to work, and not only from a money perspective
If your bored to the point, where you want more responsibilities it's time to move on. Your not learning or growing. Your biding time.
If management doesn't want to support my career progression then there isn't mutual respect.
But I'm not enough of a sucker to plead for it. If it's not provided I'll go and get another job.
If you discovered that you are paid way over market rates, do you say "hey, you are paying me too much, but I will work my ass off to give you the right value"
You should know that your employer has no emotional attachment to you, and you will be immediately replaced by equally skilled labor in a matter of weeks. If you go around caring about your employer, you will be hugely disappointed when you find out how little they actually care about you. You are just a cog in the machine. If you give up a significant portion of your life and more importantly of your work years you might become one of the cogs thats deeply buried in the guts of the machine. Just remember that at the end of the day everyone is replaceable even the CEO. You are not special. You are not unique. Someone else can learn your position and do your job.
If you aren't willing to stick it out through the latter, you're probably doing the manager a favor in the long term by shopping that CV around.
I've worked at a small business that put 15% annual pay rises into my contract. Thats meaningful. And I busted my ass of for them for close to a decade.
You come off as extremely entitled. Honestly, I'd be happy that you left.
Easy to say, hard when its a sellers market. Maybe when the tech labor market softens? Otherwise, you see a 10-20% bump by moving immediately, rather than wasting a year of your life making less than you could.
Sounds like you'd be doing you're subordinate a favor.
I'm not talking about me specifically, but that's how most IT profiles go around here. Some areas more than others, but there's too much demand for talent that the market can't absorb it, hence the prices go up.
If the employee feels they've been giving too much before now and they are owed a promotion or monetary reward I'm afraid they did it wrong.
This is based on my own experience in different work places: You never offer your skills in advance without a clear and objective promotion/development plan in place - even though, it's still a risky bet. Of course you could still do it if you're in it for other rewards (glory, respect, fun, work/life balance).
Once you have worked your ass off, they know you can do it for less, so what's the incentive on giving you anything extra? Keeping you around? No one is irreplaceable. There has to be development in place, so the employer feels they're making you better, which in place brings them more money to their pockets. Otherwise they'll just squeeze you like a lemon, which is actually their job.
Ninja edit: Actually, touching back in 6-12 months is NOT the right thing to do. You should setup monthly one-on-one meetings to follow up on her progress and fine tune anything that's not going as expected. What you want is an employee that improves and ideally overperforms, you don't want to just not pay more - that's not a recipe for success.
I've clearly laid out what I've done in the last 6 months and how it has benefited the company (justifying the change) and what I have planned in the upcoming 6 months, to show him what he will be getting from me.
BKO mentions you should 'setup a plan', but I'd suggest putting that on the employees shoulders. If they are asking for the title and salary, let them know you're not against giving it to them, but have them explain what they have done in the last X months to feel they deserve it, and/or what they plan to do.
From there, you can discuss what your expectations would be of somebody in that position with that title. You can then help them fill the gap. But I think having the employee do the introspection first might bring to light where the employee sees their value.
Fortunately you have several factors in your favor, and potential strategies to getting to "yes".
1) It's A Startup - resources are scarcer than a larger, more established company. Any employee who works at a startup should understand this.
2) No Process - there's no formal process for handing out promotions. Co-opt his self-interest to craft a process that treats employees and the company fairly. As a side benefit this will force him to think of the company's needs in addition to his own.
3) It's A Startup Redux - working for a startup often means sacrificing short-term gains for a long-term payoff. Structure any promotion so that while an employee may not get as much now they have an opportunity to earn much more in the future. (Usually, this comes in the form of stock options with a vesting cliff).
4) DIY - in a startup the best way to get a promotion is to build it yourself. A single Google worker is unlikely to move the needle on Google's profitability, either up or down. A startup employee can have a much greater impact. Inventing or improving a feature. Helping expand into a new market. Creating a process that saves every other employee an hour each day. These are all huge gains that can improve profits, either presently or down the road. Find the metrics to measure each employee's contributions and reward them appropriately.
You should be able to precisely define what it looks like to perform each job function at a given compensation/title level. That way, when a person comes to you looking for a raise or promotion, you can say "Well, these are the skills you will be evaluated on and the expectations for what you can do to earn that, and this is the process and timetable for this evaluation. Get to work." And ideally, you'll have built the process with employee input so that everybody buys into it, and sucking up to anyone person doesn't measurably change your chances of being promoted.
Lay out the (not "a", but "the") roadmap that would define what they think they're worth. Make it clear and transparent.
Use lingo like "next level" and "investment" and "personal development". Be super positive.
If you're small enough, and you think it's worth the investment (in this individual), touch base regularly about the roadmap you laid out and how you think they're progressing. Be ready to come with concrete, factual stuff, too.
1) Set up performance reviews and tie them to salary reviews every 6 months. It sounds very corporate-y, but it sets a cadence. People know when their compensation is up for review.
2) Talk about salary/title/equity expectations before performance reviews. Then, during performance reviews, if your grant differs from the expectations, it's a time to set objective for how to achieve those goals during the next round of raises.
Instead of saying "no fucking way you can't do that job", You say "at this time were going to have to refuse this request", "here is the things your good at today (elaborate on list of items), You need to keep that up and do the following if you want me to give you that title and raise (give list)"
The problem might be you, not them. They may see needs you haven't identified yet, and aren't articulating them well. You may also have currently unstated expectations that you can get out on the table too. Lots of people are happy having a plan/path and might reach for it if they see it is possible.
There may be other mitigating factors in the ask that you aren't stating or aren't making us aware of as examples:
-- Are they asking for a role your hiring for?
-- Do they have life changing events going on that your unaware of, and a need for increased compensation?
-- Are you below market on pay, and pushing equity as an alternative? Stock options and free lunches don't mean shit if you have a sick family member or a kid on the way.
I disagree that personal circumstances should be a factor in making managerial decisions. It's not fair to the other employees, company or investors. If you feel strongly enough to intervene, you should do so on a personal level (offer to lend the person money with no expectation of having him return it, let him crash on the couch, etc) because the other employees and investors may not share the same values as you and you need to act in their interest.
Economist Ronald Coase had an interesting perspective as to why firms exist:
> Mr Coase argued that firms make economic sense because they can reduce or eliminate the “transaction cost” of going to the market by doing things in-house. It is easier to co-ordinate decisions. At the time, when communications were poor and economies of scale could be vast, this justified keeping a lot of things inside a big firm, so carmakers often owned engine-makers and other suppliers.
So paying someone no more than you have to would be the model of purchasing contract work rather than decisions made in the firm. In the firm, you accept some inefficiencies in order to minimize transaction cost, including those associated with finding, vetting and hiring a new employee.
[0] http://www.economist.com/news/leaders/21584985-anyone-who-ca...
Promoting someone (deserved or not) because they are having a kid or have a family issue would be a bad idea. If it is something temporary, then a loan or a place to crash might be in order, and that should be a personal decision not a company one.
Knowing what those circumstances might have a massive impact on what you do next. A boss of mine once told me "tell me your interviewing so I can fix your tie". As a manager on two occasions I have encouraged staff to find a job that would no longer limit their growth. At the time we simply didn't have enough money or a role for them to continue to develop. Helping someone move on, and doing it in the most constructive way possible might actually be in the best interest of your fellow employees and investors, and the person involved.
In a more personal case, I was instrumental in a good friend taking a lower paying job and relocating to help support a sick family member. It worked out in such a way that the "on paper" pay cut, turned into them having more disposable income.
I think that knowing those circumstances can lead you to a better managerial decision, and it has for me in the past, provided your open minded about what you can and can't do!
The problem is, people work for money and they want that money to live their life as they wish. Be it traveling the world 3 months per year or raising a family and buying a big house. They will tell you why they want a raise and you should understand their reasons: You want employees that perform and an employee that is happy raising their family because they have good work/life balance and the money they need would always perform better than one that just thinks he's not valued or not getting his economic needs covered by your compensation.
As a manager, you have two risks:
1) They leave, which in mid-term could be a blessing or it could just mean bad times for you. Nobody wants managers with high turnover on qualified positions - your team is never performing close to 100% in that case.
2) They stay. Unmotivated, venting their problems at the canteen with their colleagues, who start to think about theirs... You know, the rotten apple. This is most of the times not on purpose to hurt you or the company, it's just a de-stressing mechanism.
Employees are (still) human, so in order to be a good manager you need a holistic view over their needs and worries. After all, you're managing people and not software.