A few weeks ago, a friend of mine learned that he was being paid less than a few of his peers in similar positions at his company. He had been there for more than 15 years, and this newfound knowledge caused some upset. It seemed unfair that these people who joined the company long after he did, but were in similar positions, were making more money than he was. So, he asked me what to do.
As a corporate lawyer, I’m often privy to private salary information for employees. And, admittedly, there have been times when I have seen some numbers and questioned “how in the world is that person making that much money?!?” It is a natural reaction. However, there is a reason that this information is private. And, the reality is that just because another person is making more money doesn’t always mean that you are being paid unfairly. There are many things that factor into compensation beyond salary including paid time off, flexible schedules, bonus potential, equity and other benefits.
So, before letting this information ruin your day, and running to your boss to ask for a raise, ask yourself these two simple questions:
- Before learning this information, was I happy at my job?
Compensation goes beyond your paycheck. Does your company treat you with respect? Do they acknowledge your work? Do they give you the opportunities you want to learn and grow? Are you challenged and engaged in the work you are doing? Do you have the flexibility you need? Do you get good benefits? The list goes on. But in short, are you happy?
- Is my compensation appropriate for my skill and experience?
Benchmark yourself against compensation for people in comparable positions in your region. It’s easy to find this information online, as many of the large job-hunting sites, among others, provide this data. Find out what your skills and experience are worth in the market and see if you are within that range.
If you answer “no” to either of these questions, I recommend a sit down with your boss. The good news is that, assuming you are a strong employee (which I’m sure is the case of anyone reading this blog post), then you have an advantage. Studies show that newer employees are often paid more and perform worse than more tenured employees – at least for the first two years in the position. And the cost of replacing an employee is between ten and thirty percent of that person’s salary. So, it would seem sensible for companies to compensate their employees fairly to keep them as long as possible. However, don’t rely on that alone. Make your case by clearly presenting:
- Your unique value in the relationship
Remember that you are getting paid to do a job. So, simply making the case that you do your job well is not much of a case for a raise. Focus on what you are doing and your contributions to the bottom line over and above that which is expected of you.
- What you believe you should be making
Don’t compare yourself to others in your company (you probably shouldn’t know that information anyway). Present external market data to show your worth.
- What you need (beyond compensation) to be happy
Beyond compensation, what else is bothering you? This is not a time to complain, but rather a time to share what is bothering you and work together to find a solution.
Your job is a two-way relationship. And for that relationship to work – like any other relationship – you need to feel like each party is contributing equally. There may be times when one party is doing a bit more to help the other side get through. That is how great relationships work. However, when the imbalance goes on for a while, and there is no correction in sight, it is time to address it or move on. Be prepared that if your employer doesn’t agree with your position, you may ultimately need to leave. But always weigh the pros and cons, and try to objectively evaluate whether you are moving on for the right reasons.
If you are reading this, I know how awesome you are. Good luck! As always, please share your thoughts with me.