Some thoughts on asking for a raise
heidiroizen.tumblr.com
heidiroizen.tumblr.com
1) That I'm the de facto lead engineer on a product that's making €X million per year while also strategically important for the company. i.e. I'm valuable to the company and would appreciate them acknowledging that via the well-understood language of money.
2) That my raise would be small change to the company in the grand scheme of things.
3) That I could expect to walk into a different job at the salary I was asking my boss for, and have been considering doing so.
4) That if I left, he'd expect to pay an equivalently experienced replacement a similar amount, while also suffering the pain of upheaval on a small development team.
So I tried to keep it balanced between reasons why it would be good for both me and the company to give me the raise, while leaving him clear about the consequences of not doing so.
Note that I didn't have a job offer from elsewhere to use as leverage, but in my case the threat of leaving seemed to concern him sufficiently (recruiting good developers is pretty tough in northern England) that it worked almost as well. However, it still left me in a weak position when he asked me for a number.
I should also note that I was extremely nervous about championing myself so overtly, and it didn't come naturally at all (we programmers are excessively meek at times). I'm happy to report that none of the disastrous consequences I'd imagined in my head came to fruition, and my boss reacted extremely positively.
I never had to ask for raise at my job (for several years), but with the change of my boss, it looks like I will have to. I'm actually pretty happy with the money; what I more concerned about is the feeling of being treated unfairly.
My boss, unlike me, has all the information, so he can decide to treat people around him fairly. If he does not, and makes these decisions based on what people ask him, then he is certainly not being fair. Then, why on Earth should I want to work for a person like that? Doesn't that kill motivation too?
In other words, what's wrong with wanting to stay humble about your work (there are many articles that ask engineers to be exactly that, and it's certainly a great characteristic for a coworker), but at the same time, demand fair treatment?
Theoretically I'd love to work at an environment where you're paid fairly without having to negotiate, and where negotiation skills would not affect one's compensation. However, wherever productivity is hard to objectively quantify (which is very often the case), the compensation is unfair out of statistical necessity (errors in attempts to quantify productivity are much more likely than no errors.) Negotiation skills will thus necessarily impact compensation because they're basically about convincing that you're worth more than you're paid and employers cannot be "immune to convincing" because they have no truly objective criterion to rely on.
Another angle is that there are many things worth working on in environments where fairness is not only an elusive goal, but not even something the employer aims at; rather, they aim at minimizing their expenses, or out-negotiating you for the sport of it, etc. You can stay around for a while, underpaid, and then quit and not work on that thing anymore; or you can negotiate a better deal and stay and keep working on that thing. Sometimes you might prefer the latter. Another scenario is, your skills are uniquely valuable to someone who minimizes expenses rather than maximizing fairness, and the best deal you are likely to get for yourself is by negotiating with that party.
In my eyes, this is the most important line: "And finally, here is one thing NEVER to do when asking for more money. Never ask for it nor justify it because of your need." That does not just apply to money. This behaviour is nothing but begging and playing on emotions. Professional people will look right through it.
I read the paper version :)
http://www.manager-tools.com/2013/12/when-ask-a-pay-rise http://www.manager-tools.com/2014/04/how-ask-a-raise-researc... http://www.manager-tools.com/2014/04/how-ask-a-raise-cost-li... http://www.manager-tools.com/2014/05/how-ask-a-raise-making-...
This is something I hear contradicted here quite a bit. As someone who hasn't been in the industry a long time, I'm interested in hearing more about why this is or isn't true.
It's absolutely true. Employers really don't want to screw employees, they just have no true measure of your value. They have to use your most recent pay, YOUR OTHER OFFERS, industry stats, and a biased set of personal anecdotes to ballpark a placeholder when you get hired, because there really is no other information.
Once you are hired, your manager never thinks about your salary. Until he has to, like annual reviews. OR YOU HAVE A COMPETING OFFER. And during annual reviews, he's given one bucket of raise that he needs to divvy up among his staff. There isn't a lot to go around, nor any way to handle special cases.
That's just the way it works. If you want a good raise, get a competing offer.
As someone in this exact position, my solution was to ask for a raise, and when they said no, I considered trying to make a quick move. But after realizing that I really don't want to job hunt right this moment, I put my head down and went back to work.
I think in order to get to that point in your career where you can easily have multiple competing offers to choose from, you need to be a really good developer with a spiffy-looking portfolio. Takes time to get there, and beating the bushes to get offers just doesn't appeal to me, and probably won't until I've fine-tuned my development process to where I can whip up websites like no tomorrow. My job is Good Enough for the moment, yours might be too if you think about it.
Oh and parent comment presented his opinion as a TL:DR of the OP, when in fact it's just his opinion. The OP is nuanced and quite worth the read.
This is what bothers me most about this sort of advice. As someone who is often trying to hire people, it's a lot of effort to get a candidate through the pipeline to the point where an offer is made. Intentionally causing people at another company to waste that kind of effort would make me feel like I was doing something unethical. I really don't think you should look for a competing offer unless you're willing to accept that offer if you don't get what you want from your current employer.
As someone in this exact position, my solution was to ask for a raise, and when they said no, I considered trying to make a quick move. But after realizing that I really don't want to job hunt right this moment, I put my head down and went back to work.
Yeah, I think that's just the value judgment everyone has to make. Either you get another offer and are willing to walk if it's not met, or you're willing to wait it out and see if you can get a better raise later. It's a personal decision based on your circumstances.
Oh and parent comment presented his opinion as a TL:DR of the OP, when in fact it's just his opinion. The OP is nuanced and quite worth the read.
I think the parent was actually tl;dr'ing his own post up front.
Then make sure your staff aren't forced to get a competing offer just to get market rates.
"Intentionally causing people at another company to waste that kind of effort would make me feel like I was doing something unethical"
The vast majority of people applying for roles will switch if the offer is right. Sure if you offer 10% more I'd much rather just get my current employer to match... but if you offer 30+% then we have a deal. I don't want to stay with an employer who will underpay me by so much.
I'm not sure what this has to do with what I said. I'm talking about the cost in time and effort to hire someone, not to retain them. (Regardless, I have no say or control over salaries, so I can't do much about this.)
The vast majority of people applying for roles will switch if the offer is right. Sure if you offer 10% more I'd much rather just get my current employer to match... but if you offer 30+% then we have a deal. I don't want to stay with an employer who will underpay me by so much.
Eh, maybe. I'm not sure I agree. Even if I was feeling underpaid at my current company, it'd have to be a ridiculously sweet deal to get me to move (I mean, so sweet that no one would ever offer me something like that). I have enough forms of attachment other than salary that even say a 50% raise would be unlikely to get me to budge. I think there are quite a few people who feel similarly.
And that's what I object to: someone shopping around with zero intention of accepting another job, but only doing so to use as leverage with their current employer. Yeah, "it's just business", but the people at these other companies whose time you're wasting are real people who don't deserve to be jerked around.
But the stakes are really high here. Your employer has a lot more to lose than you do if you jump ship over a relatively small amount of money. You took the job, so obviously it was right for you at some point. Did that really change just because they turned your raise request down? Do you really want to hang them out to dry over what's essentially a misunderstanding? Don't sacrifice your professionalism to feed your ego.
My solution is to just keep getting better and better until I can make my own opportunities. Then to start on one as my current projects wind down, giving plenty of notice as to my intentions. Everybody wins.
> I think the parent was actually tl;dr'ing his own post up front.
Ah, right.
It's not about being sociopathic. You said it yourself: it's just business. Really, that's what it is. You are exchanging skills for money, if one party isn't happy with the agreement, they can terminate it. Don't confuse the issue with wording like "hang them out to dry" or "professionalism." Professionalism has nothing to do with martyring yourself. If you're unhappy with anything enough to leave, then leave.
If you can get a better deal from your current employer via other means, you should certainly do so. If not... well, I'm personally uncomfortable interviewing at other companies with no intention of accepting an offer. Opinions differ, of course.
I wasn't unhappy enough to leave. That's why I didn't leave.
I find it really hard to try and figure out what other benefits, aside from a salary hike, you might get from a new job. Realistically, I think you need to make your way right up until the point where they do or don't offer you something. Everything about the interview process is as much of the company seeing if they like you as it is you seeing if you like the company.
Sure, if you have no intention of changing your employment situation, well, yeah, you're wasting a bit of someone else's time... but there's also the flipside that you might not even notice that there's something more interesting, or something intrinsically more valuable, about a new job until you actually get to the point where you're being offered it.
Same with your job.
However, employers don't particularly care about their candidates either. Generally you're expected to skip a day of getting paid, at crappy notice, to come talk to some people who've laregly already made their minds up about you.
You might be the special case that doesn't treat candidates like shit, but after a while of getting stiffed, most people learn to play the game. I can't really blame people for trying to get what they're worth.
I suspect though, if they're willing to take the chance going back to their employers with a competing offer, they're at least willing to take that offer should their current employer react poorly or fail to match it.
I really don't think you should look for a competing offer unless you're
willing to accept that offer if you don't get what you want from your
current employer.
Also, unless you're one of the very very few companies that are honest in their job descriptions, offer a good work environment, and release the salary plus comp on offer at the beginning of the negotiation rather than the end, you're wasting a candidate's time just as much as he or she is wasting yours, if you choose to view it that way.
Would you shop around for a new job without any intention of taking it?
an engineer reaches out to you, and your reaction is, "Show me I'm not wasting my time"
I'm asking you an honest question here. Would you, personally, engage another company about a job that you don't have the intention of taking, in order to gain leverage over your current company?
I can't see myself as being willing to do such a thing, but I'm interested in the thought processes of someone who would. Maybe I'm operating under false pretenses. You don't know unless you ask.
Not true at all. Development is currently a hot market and you can get competing job offers right now without any portfolio as an average developer.
If you wait a few years development might not be such a great market and you might not get a raise even if you are a much better developer.
I'm sure there are some bad actors that try to keep their employees from figuring out what they're actually worth. The semi-recent revelations of no-poaching agreements between some high-profile tech companies certainly suggest that some do put a higher priority on retaining employees than they do on fair compensation.
But I really don't think that's the norm. I don't think many HR departments and managers sit around trying to come up with ways to keep their employees' salaries down. I hope I'm not being too idealistic thinking that.
If your a web designer, developer or software engineer I'm sure your getting one recruiter a day to a week offering you X job.
A lot of ppl don't like to deal with recruiters but for me I'm flattered and think I don't need them now they need me. Thus when they ask how much I seek for their opportunity I significantly jack up my rate. Doing this has led from going from one company(every 2 years) to another each time making significantly more money. Though one company I worked for learned I was going to take a better offer and matched it.
Knowing what the going rate is is an important base for understanding the direction in which your career will develop, and what you should expect in remuneration as it develops. But, I feel it is foolish to go into that negotiation and say "salary averages say I should earn X, therefore, pay me X."
What you may end up finding is that if you ask for market rate, you'll hear "if you can fetch that in the market, go to the market." Market rates are an average, a very broad average, that does not always take into account your geography, your industry and any specialisation you have. Some companies will value more, some less.
A better way to approach that discussion is to understand your remuneration is based on some contractual period, namely 12 months. What you need to do is work with your employer to set how those next 12 months should be valued. It's all about trajectory. If you've had a few years of positive development, it should be an easy case to make that the trend will continue upwards.
It's also an interesting test, if you can't see how your next year will provide increase value to the organisation, it may show early signs of changes that are about to occur internally. That said, if you have an actual offer, that's a different discussion.
You should be delivering significantly more value than market rates! Market rates for your skill level should be a salary floor. Surely you can deliver far more value to your company than a random developer who walks in the door.
I know I can, as a fairly average developer, easily outperform top developers because of all the internal knowledge, market knowledge, and customer knowledge I have built up over the years.
If you aren't worth market rates in your area then you should consider changing jobs because your company is clearly getting you to do low value easily replaceable work.
About a year into the job I accidentally came across a piece of private paperwork a less experienced co-worker left on the shared printer that had her salary on it. It was almost twice what I was making!
I started a campaign to fix this discrepancy. I started keeping track of every task I performed, even little one-off tasks, and also the impact that completion of that task had. I often found that the tiny half-hour one-off tasks I was taking care of without a second thought were generating huge returns on efficiency for my company. A simple script that turned a 40 hour a week copy-and-past data entry job that was eating into corporate overhead into a 30 second run-once-a-week thing was freeing up an employee to work on higher billable hour tasks. I was not only saving the company money, but making it money by pinpointing and automating problems in their business processes.
The next evaluation period I walked in with a 20 page print out of every task I had worked on in the last year, what it was, and how it had impact on the company's bottom-line. I asked for as big of a pay raise as company policy would allow.
It worked, and it continues to work everywhere I go. Having an irrefutable record of your value to the company makes it impossible for them to turn you down. And when they do, you now have an excellent archive to use for resume filler when you go looking for your next job.
Things I never do:
- threaten to go somewhere else if they don't give me the raise, this is implicit. If they don't give it to you, leave the company. Simple as that. No threats. Managers don't like it and it's just as likely to backfire on you. I guarantee they'll muddle along somehow without you.
- get upset, what employees are paid is a complex business that you can only ever really understand when you're in the position to be paying them. Sometimes you'll end up getting paid less than an employee in a similar position. It sucks, but sometimes there's reasons for it that you aren't privy to. Don't compare your pay to others too much, compare it to yourself and where you want to be.
- demand pay that exceeds what you should be making in that position in that industry. It sucks, but if you work phone tech support or are a receptionist, you're not going to be making $250k/yr. If you want to make that kind of money, ask what the requirements are for that job then pursue them. Hold the company to that claim. When you fulfill those requirements, if they don't pay-up, move on. Congratulations you are now qualified for a better job at a competitor.
- take a raise, then quit immediately. I feel this is a point of honor, if I make a big fuss and my manager goes through a lot of trouble to get a silver bullet for me, I feel like I've just made at least 12 month commitment to them. You'd be surprised at how important this has been for me career-wise many years later. I've had old managers who've hired me back at new companies (or give me open offers) just because I stuck around after they put their neck on the line for me, even when the work environment sucked. As a manager it can be difficult justifying huge percentage pay increases for your people (my 20 page list of completed tasks usually helped them significantly).
- ask for it based on need. "I need to make more money to make my rent". I did this once, and my manager responded with, "well you should live in a cheaper place". And that was the last time I tried that. Your company is not responsible for your personal spending habits, full stop.
> threaten to go somewhere else if they don't give me the raise, this is implicit.
Even in an in-demand industry like tech, this is definitely not implicit.
Edit: To expand - I'm not saying you absolutely should threaten to leave if you don't get the raise you want, but you need to be able to discuss your market value with your manager in a meaningful way. The market value is your BATNA, and without one your bargaining position is diminished.
Companies, especially bigger ones, can do and do mess this stuff up occasionally, even when they/your manager really likes you. The "take it or leave it" response to a raise offer is an overly simplistic world view - you simply cannot ignore the market.
"Hey, I've decided that I'm now worth $X. Since you've already hired me and it's less hassle to stay than to change jobs, I'm giving you the opportunity to meet my price before I look elsewhere."
Assuming that you didn't just pull $X out of your ass, the company can then make its decision accordingly. But if you really think you're worth $X, I find it strange that you would get declined by the company and then say, "...oh. Well, I guess I'm not worth $X, then. Never mind." At the very least, you'd be looking at other companies that are willing to meet your price. After all, you got your number from somewhere, right?
Once you give in to that kind of ultimatum, you set yourself up in a negotiating position where all any of your employees have to say is "...or I'm leaving" and you've basically agreed to give away the farm for sometime truly inconsequential stuff (employees talk between each other and a successful and simple tactic like this will spread like wildfire).
Interesting note on this... At GrantTree we're (still in the early stages of) trying something different. Since all pay is open and we use something called the "advice process" to make decisions, to change their salaries people need to make an open proposal to the whole company, gather feedback, and then make a decision (note: they do not need to incorporate all or any of the feedback; we trust them to make the right decision).
With this in mind, the proposal is meant to cover 5 key angles:
1) What do I deserve?
2) What do I need?
3) What is the market rate for my role?
4) What can the company afford?
5) What is good for GrantTree?
We explicitly ask people to include their needs in this. They are people, they have needs - ignoring that is stupid, in my opinion. If we have someone on staff who is contributing greatly to the company but has high mortgage payments, and I pay them less because I have this other person who is contributing the same but has much lower monthly costs, and I pay the first the same as the second, I will lose the first because they can't afford to keep this job.
Obviously we're still experimenting with this (about 3 months in), but I think that considering the needs of the person is essential - particularly in a decision model where they make the decision anyway, so they will obviously be considering their own needs as part of the equation! But even if someone else was making the decision, considering the person's needs is absolutely mandatory if you expect the person to also consider the company's needs.
In other words, if you don't care about their needs, why should they care about yours? "Oh really, this has been a bad year so you don't want to give me a pay raise even though my market rate has increased? Fuck you, I'm off."
Oof. Not sure how I feel about this rationale. If I were the other guy in this equation, I'd be pissed if I was making the same contribution as someone else, but got paid less because the other guy "needed it more". Why am I being punished because I live within my means?
Maybe the response to, "I need a higher salary because I have a large mortgage payment", should be, "maybe you shouldn't have bought a larger house than you could afford".
How about this: say this guy works at your company, and presents this rationale, and gets (takes?) his raise. Then the other guy, who is (for the sake of the argument) exactly equal in experience and skill, and provides the same value to your company, steps up to the plate and says, "I would like a raise as well, because I should make the same amount as someone who is my equal and peer". Would the group agree with that? I certainly hope so. If I were that guy, I'd quit on the spot if not.
And this extends to other things as well: one guy has 4 kids, the other has 2. Kids can be expensive. Does the first guy's decision to have more kids make him more deserving of a higher salary than the other guy?
I could extend this to just about anything. In the end, once you're above the poverty line, your "needs" aren't really based on anything rational or "fair". It's really just what you want. I'm not saying you shouldn't try to get what you want, but suggesting that one person's wants entitles them to a higher salary than someone who has more modest wants... well, that's ridiculous to me.
This is actually a great example of one of the reasons why employers like to keep compensation secret. If this hypothetical high-mortgage guy is that important to the company, you want to be able to give him more money if not doing so will cause him to quit, all without pissing off the other otherwise-equal guy with the now-lower salary.
So my thesis here, I guess, is that if you're going to be transparent about compensation, that compensation must be based on measures as objective as you can make them. Otherwise you have to keep compensation secret so you can make "unfair" deals with some employees as necessary, without pissing off other employees who don't get such a good deal.
At any rate, I do think what you're doing is a really cool (and brave!) experiment. I hope it works out for you and your company, but I'm very much afraid that making personal needs a component of public compensation decisions will lead to others harboring resentment.
A lot of your examples are somewhat linked to the issue of having just one person with a very limited supply of knowledge about their staff decide on salaries.
I'm not sure the one-person-decides bit really applies here. I object to "personal needs" being used as evidence for or against giving someone a raise, regardless of whether it's one person making the decision or many, or whether it's made by someone who knows the person and their work deeply, or only has superficial knowledge. I just don't think that matters for this particular case.
I see this as negative discrimination and feel it ought to be very illegal.
You are paying people more on the justification that their life choices suggest they were more privileged to begin with.
This is the same type of justification that people have used to pay women less, re-coded to fit modern social values.
Completely agreed. "I'm being punished [paid less] because I didn't take out that mortgage I couldn't afford?" Seems like it rewards irresponsible behaviour.
It's probably not very convincing as an argument, but take my word for it: the way we do this, openly and transparently, is not discriminative - on the contrary, it is collaborative, open, respectful, etc.
As I said, the "what are your needs?" side of things is fairly new and untested. It may not work out. Still, it's worth trying and seeing whether it works, I think.
It really isn't, sorry. Having to share what should be private personal details with my employer and coworkers in order to get fair compensation is unreasonable. Plus as others have mentioned it's a potential gold mine for lawyers.
First of all, there's no "have to share personal details to get a fair compensation" involved. People share personal details because they work closely with other people who become their friends.
That said, your overall attitude is perfectly reasonable, and it's great that you're aware that that's your position on this - because we would definitely not want to employ someone who is uncomfortable with transparency. I've found that the reaction that some people have to transparency is a great hiring filter.
In this case, privileged enough never to have observed any personal problem with transparency nor to have any aspect of a personal life that they might not wish to share with work colleagues.
You are trying to rationalise discriminatory practices.
Perhaps I wasn't clear about something: we do consider personal/medical issues to be a person's own thing to share if and when they're feeling like doing so. Business data secrecy is hunted out of existence, but personal sharing is entirely voluntary, and not everyone shares everything about their personal life obviously.
I don't believe you have any reason to pay people more than they are worth. That would be bad for your business and is not credible if we exclude nepotism.
So, by admitting that you pay people different amounts for the same work, you are paying some people less than their genuine value to you. You are paying people unequally because of their personal circumstances.
Although I don't doubt that many or most companies do this privately, I cannot see it as anything other than discrimination. The fact that you are open about this process is not an improvement. It's an admission that you're glad to have the ability to do this.
I found it a bit shocking that elsewhere you suggested being openly gay at work is somehow unusual - are you hiring openly gay people on the basis that they are cheaper than the market rate for the same skills? because they have fewer good options? Do you, in reality, use this justification to pay your black, gay, and female employees less than white, straight, male ones?
I don't suggest that is your motivation for this (nor even that it is realised in such a small sample), but that is how I interpret your line of reasoning and I would be spend significant time talking to a lawyer if I was entering an employment relationship with you.
> So, by admitting that you pay people different amounts for the same work, you are paying some people less than their genuine value to you. You are paying people unequally because of their personal circumstances.
That's an interesting perspective... But incorrect. I guess your perspective comes from a traditional work environment. Remember that all our finances are entirely transparent. Because of that transparency, any such unfairness (like paying black, gay and female employees less) would stand out painfully to everyone and drive people away from the company, particularly since many of us are quite sensitive to discrimination. For example, when we detected that one of our recruitment sources seemed to have a negative bias (sending us only candidates from fairly "elite" educational backgrounds), several people in the company (including senior people) declared that they would quit if we kept using this source of candidates. Imagine how they'd react if there was any kind of discernible policy to underpay black/gay/female people??
The rest of your comment is just extrapolating from this incorrect assumption, so I won't address it. Yes, if we did this it would be the worst kind of discrimination, but we don't.
As I've said elsewhere, our practices can't easily be translated to a secretive, control-based, non-open environment... Without trust none of this is possible. Perhaps a good analogy is surgery... without trust in the person doing the surgery, it's a criminal grievous bodily harm to cut people open... with trust it can life-saving, essential. You can't extract the action from its context and judge it in isolation.
I found it a bit shocking that elsewhere you suggested being openly gay at work is somehow unusual
I did not suggest that being openly gay at work is unusual, I was responding to someone who said that people wouldn't want to share their sexual orientation at work saying that several people here are clearly comfortable with that (and some others aren't).
Obviously no one is being forced to share their personal issues. All I'm arguing about here is whether someone's needs should be a part of the equation determining their pay.
There's a stanford case study on AES, an energy company that employed 40'000 people and had similar compensation practices. Here's one of their values, quoted in the study:
Fairness . . . the term `fairness' means `justice.' Often `fairness' is confused with `sameness' ... We don't mean that. AES aspires to give everyone special treatment. Everyone is unique ... And the effects of treating people justly in corporate systems and organizations can be profound.
They scaled that value to an international, public corporation with tens of thousands of employees. Worth pondering instead of rejecting outright, no?
And, likewise, I imagine quite a number of people here would definitely not want to be employed by someone who takes that sort of attitude.
There are some things that it's just not possible to ethically consent to within the context of an employer-employee relationship. It might seem like everyone is onboard with this transparency, but it might equally make someone deeply uncomfortable but also feel like they're unable to question it without putting their job in jeopardy–as your comment just here has hinted that it might.
If you disagree, fine. GrantTree only employs 20 people at the moment. You don't have to work with us. There are literally millions of other places you can work who do not have transparency as a core value.
I'll add that transparency is not something that's sprung on people at the last minute. It is explained abundantly upfront to people before they start. We're in central London, where there are a bajillion other startups and companies. It's not like they have to take a job with us.
Surely you can accept that some people out there are interested in working in a transparent company, even if you personally aren't.
Talk to your lawyer about how things play out in your jurisdiction, but in general, asking questions in the workplace which are virtually designed to solicit the comment "I have children. Please adjust my salary accordingly." seems designed to incur legal risk.
Please correct my reading of your comment, but it sounds like you're saying that "people who aren't naturally open about such things [like being gay] probably wouldn't be hired" because that sounds like the very definition of discrimination.
Don't misunderstand: the "being gay" part is completely irrelevant. What we discriminate on is the culture fit, in particular values. And we discriminate a LOT on that basis. If anyone throughout the interview process doesn't think the candidate is a culture fit, they are personally responsible for voicing that and ensuring the candidate is not hired.
One of our core values is transparency. We don't hire people who aren't open.
The best answer here would be to pay the two equal employees the same amount. The responsible one can save, or treat him/herself, or whatever. Paying irresponsible people more is dangerous for your company and your employees. I spent years on the pointy end of that stick. It was a really shitty situation; I knew that the guy "needed" a lot more money than I did, because he had a gaggle of kids, a nice house in an exclusive neighborhood, a bunch of cars, etc, while I live in a modest house, owned my car outright, and kept my expenses low. The worst part about my resentment was that I felt bad about feeling it; I denied to myself that I even felt it, because I really didn't feel that it was fair to deny this guy the ability to feed and pamper his kids, keep his house, etc. So, I worked hard, kept my head down, made about a third of what he did, and bottled up and denied my resentment for years. I'm still trying to repair the damage.
So, that was long-winded and just an anecdote, but seriously, be careful with treating people of roughly equal value differently because one of them needs more money than the other one. It can work out poorly.
I don't see how employee's "needs" are at all relevant to what you should be paying them. In my experience, when a small company tries to do this kind of thing, people may play along to not look bad, but no one actually likes it. (Well, maybe the person that's getting a raise because they spent more.)
It also seems like there would be a lot of interpersonal complications; I mean, I'm far from a political sort of person but I know my relations with my coworkers tends to hit low and high points. Usually I just do what I think is right and try not to worry about who will be pleased or offended. While I want to be well liked, if they had a direct effect on my compensation the relationships would be a lot more distant and calculated.
Having a pressing need for the money just speeds up that process.
That being said, the last person you can trust to give you a raise is your employer. I don't think it's out of maliciousness, but it's just reality.
It's a rare boss that actually cares enough to guide you and to push you to make your career better, because that means they will be losing you. I've had 1 of those bosses, when I first came to Silicon Valley, and it affected how I look at things.
The rest of my bosses just want me to make their lives easier. They will pay me well and treat me well if I make their lives easier, ie. add new features, fix bugs, handle customer escalations, and I'm grateful for this because they've treated me very well.
But things like raises, career growth, it's rare that managers think too much about this, because it's precisely the type of thing that makes their life worse, because if you grow out of your current role, they will lose you.
The other part of this equation is that you need to be able to properly evaluate yourself. If you're just average, then you deserve market rate, because you're easily replaced. But 80% of all people think they are above average, which causes friction. If you're really good, then you deserve higher-than market, but everyone else should get market.
The article provides fine high level advice but doesn't get into how to get this 'good data' on your market price. Is glassdoor good data? Because my general impression is that it is not very accurate and probably skews low. What are some other sources of this information?
Instead of giving the market price for a company/job title, we aim to give a market price for your own background and skills.
I understand the "collective intelligence" angle you're going for. However, the way SalaryFairy is implemented seems to "taint" the collective intelligence, at least in my case.
After predicting quite a few salaries, my score was -9 because apparently my predictions were different from the "crowd" predictions. This negative score is encouraging me to "guess" the crowd predictions, rather than simply make my best guess as to what the salary would be for the given prediction.
Since I noticed that my guesses are, on average, quite a bit lower than the "crowd" guesses, my new "strategy" is to guess the salary, then pad it $10-$50k to improve my score.
This seems like a bad thing when it comes to the "collective intelligence" goal of the site.
Just a thought -- hope it's helpful.
Sometimes what you see as crowd prediction could be just a couple predictions. As new predictions come in, we adjust individual scores. We are planning to hide scores until a healthy number of predictions are made on that profile. That should help a bit on the dependency issue. We are open to suggestions as well. Thanks for the feedback.
And of course, as the GP stated, once I started getting dinged for guessing higher than the predicted score, I started lowering my predictions. All the scoring system managed to accomplish was to drive my predictions closer to the standard data, which seems like a bad way to motivate people to give honest answers.
Also, Wealthfront keeps their startup compensation tool pretty up to date (https://www.wealthfront.com/tools/startup-salary-equity-comp...), so that's useful.
Agree that Glassdoor's data isn't very reliable. There are too many crossed incentives in that system to make me want to believe.
I'm in the middle of leaving my old job and starting a new one, and I know that I'm pretty far above the average reported salaries for my position at both companies and I know I'm not anywhere near the high point of pay for my kind of position.
If you feel there is a discrepancy between what you are currently being compensated and what you are worth then it is your job get fair value for your skills. Either you prove your worth to your current employer or you find someone in the marketplace that is willing to pay the price you have set for your skills.