Tag Archives: salary

7 things employees wish they could tell their boss about salaries

LinkedIn had an interesting article Friday whose title I snagged for this blog post.

The 7 items are:

  1. We don’t care about pay scales
  2. Forget policies. We talk.
  3. We think about our pay a lot.
  4. We will sometimes let you take advantage.
  5. When we have to negotiate … we both lose.
  6. No matter how much we earn, it’s not enough.
  7. Still, reasonable pay is ok.

Several of the points resonated with me – especially in light of things I have written previously.

“If the company can’t afford to pay an employee more, smart bosses say so. If they think a certain percentage raise is fair, they explain why. Smart bosses use pay scales to build their budgets, and use reason and logic – and empathy – to explain pay decisions to employees.”

Can’t agree more: if you don’t treat your employees like rational, smart human beings, but rather like mere resources – you create and/or perpetuate a culture of dehumanization.

“Many companies actively discourage staff from talking to each other about their salaries. I know a few companies that require employees to sign agreements stipulating they won’t disclose pay, benefits, etc to other employees.

Doesn’t matter. Employees talk. I did, both when I was “labor” and when I was “management.” Generally speaking, the only employees who don’t share details about their pay are the ones who are embarrassed by how much or how little they make.”

Yes, yes, a million times yes! In my blog post “publicizing compensation – why not?“, I point-out that forcing people to not talk about their compensation makes folks more likely to try to find out, and can lead to discontent.

“Employees think about pay all the time. Every time they deposit their paychecks they think about their pay. To a boss their pay is a line item; to employees, pay is the most important number in their family’s budget.”

Funny thing is: managers get paid, too – but rarely think about that when it comes to their employees.

“Occasionally the job market is a seller’s market, but many new employees are just really happy to land a new job. And since business owners are born cost cutters, it’s natural to hire every new employee for as low a wage as possible.”

This is related to the next point …

“Great employees are worth a lot more than their pay. You get what you pay for, so smart bosses pay whatever they can to get and keep the best employees they can.

When smart bosses find great employees they always make their best offer, knowing that if their best offer is too low, there is nothing they could have done.”

If you want to be the best possible employer ever, you need to start with your best offer to candidates. If you start with anything less than your best, you’re implying that you don’t really value their time, expertise, or potential contributions to your organization. It has been said that “everything is negotiable” – but if you don’t start with your best offer, you’re telling your current/future employee they have to make you want them more. It may turn out that your “best offer” is $120,000 per year with 3 weeks of vacation. And maybe that employee really wants 4 weeks of vacation – and is willing to accept a somewhat lower salary for that perk. Start with your best, and then massage it into what is best for both of you.

“We all want more. It’s natural. Unfortunately no boss can always give more. And that’s okay.”

Wanting more is not inherently wrong (though wanting more for merely the sake of more is probably unhealthy) – and that’s why the last point in this article is so smart:

“People are smart. They understand market conditions, financial constraints, revenue shortfalls, and increased competition. They understand when a company can’t pay top-of-market salaries. What they don’t understand is when they don’t feel fairly compensated compared to other employees in similar positions, both inside and outside the company.”

“Fair is a concept that only exists in economic theories not based on effort.”* When you look at services like Glassdoor, you can quickly see that salary is only a single facet of employee compensation (and important one, and [generally] a large one, but only one). And it’s easy to get caught-up in the mindset of keeping up with the Joneses. While it is nice to have “more”, it’s important that honesty and transparency flow from management to employees as well as the other way around.


* publicizing compensation – why not?

publicizing compensation – why not?

Many (if not all) companies have provisos when you become a salaried employee that you not discuss your salary/compensation package with other employees.

Most people have been raised in a mindset, largely because their parents have worked for companies like this (and maybe their grandparents, too – it is 2013, after all, and this is not a new phenomenon), that they shouldn’t ever discuss how much they make doing job R when their friend does job H – even at a different company.

Let me state, first, that I am not going to promulgate the idea that everyone should go around bragging about how much they make – especially if you are in front of either mixed company, or in front of someone you know is having a difficult time financially- after all, who wants to be the one guy in the room making $35000 when everyone else is in the 6 figures and gloating about it? I sure wouldn’t.

However, (and maybe I’m weird – though I don’t think so) I have never cared about how much you made in comparison to myself. If we are doing the same work with the same experience and we do not have the same compensation, it implies that one of us negotiated better (I have some thoughts about negotiating, too, both published and not). If you manage to get an extra $1 an hour ($2080 more per year), that’s awesome.

Given that the previous paragraph, outside of “basic” jobs like warehouse work, cleaning cars, etc, never happens – why should anyone be surprised that not everyone has the same compensation as the next guy? Somewhere along the line we got the idea that salary+benefits needed to be “fair”. “Fair” is a concept that only exists in economic theories not based on effort. (The first thing to know about compensation is encapsulated in the book Everything is Negotiable – and a related, but highly specifized1 form for salaries.)

There are services like Glassdoor that help to provide “competitive” salary information … but salary is only a small portion of compensation. Let’s say you and I both make $5000 a month ($60000 a year – make the math easy). But you have 2 weeks of vacation, and I have 4. But I took the lower-deductible insurance option, and you took the higher. Which one of us is bringing home more per month? Who cares! My individual desires and needs are, apparently, being met on my package, and yours are with yours. So why does it matter that we not discuss salary information with each other? Transparency is vital in the security world, it also is internally in a company. And between friends (though, of course, the amount of data we dump, and the methods we choose, will vary) it establishes trust.

Do I care if everyone in the world knows how much I earn per year? No. Tax returns are not public, but they’re not exactly private, either (they’re not that difficult to get if you want them). House sales prices are matters of public record. And from a house sale, along with known mortgage rates at the time of sale, you can determine how much someone is spending on their housing payment every month within a decent error margin (eg, $200000 home, 4% interest, 30 year mortgage, 10% down, you have in the ballpark of a $1000 base mortgage payment2 – within about 5-10% (to cover taxes, insurance, and PMI)). Presuming you’re not living on your credit cards, that means you’re making at a minimum $1500 a month ($18000 a year) just to afford to have a house payment. Add-in other normal essentials of 21st century America (car insurance and maintenance (or bike/bus money), groceries, phone, internet, tv, student loan, etc), and you’re at least at the household income level of $40000 (pretax). Likely quite a bit higher – especially if you have a car payment of any kind.

Why go through the miniature exercise above? Because no one seems to mind comparing they car insurance premiums. Or how often they eat out. Or what they like to cook at home. But SALARY! Heaven forbid you ever talk about THAT! That’s the one no-no in discussion of financial data between friends and coworkers. But it’s irrational when in just a few second you can ballpark the minimum someone earns.

We can compare generalities – vacation time, insurance plans, sick policies, maybe even bonuses (but only as percentages – don’t you dare use real dollars when discussing them) … but not the salary.

I read recently an Atlantic article discussing Millennials and the slow break-down of corporate boundaries to sharing compensation information. I think that’s wonderful.

Publicizing (at least internally) salaries (even if it’s in bands, a la FogCreek, HP, IBM, or the Federal Government (and Military)) is extremely positive. It doesn’t disclose stock options, bonuses, etc, but can give some kind of indication between colleagues of their relative value to their employer.

At one former employer, I found out shortly after I started that another recent hire (with more years of support experience) was being paid barely more than half what I was. And had had no options when he started (just weeks before me), when I had a modest issuance. Neither of us was upset about how much I was being paid, but I was disappointed to finally see “in the real world” such salary discrimination going on. The entire reason he was paid so much less than me? He didn’t negotiate well.

It was technically against company policy for him to tell me how much he made. And me him. Technically, it was a dismissable offense.

That’s the ridiculous part of not sharing compensation data – that by sharing it you can have your employment terminated. Employers who are worried about little things like whether a given employee knows another employee’s salary are [most likely] micromanaging – at least from the Personnel Department3.

Additionally, if the company is concerned that finding out how much someone else is earning is going to cause unhappiness amongst the team, they’ve done several other things wrong. They’ve [at least]:

  • hired people whose only motivation is money (or believe that’s the only motivator)
  • intentionally tried to undervalue their team
  • established an immediate sense of distrust
  • decided to treat their employees like children instead of adults who can rationally and intelligently discuss differences between themselves – and not just on their preferred lunch joint

I would love to see this aura of distrust disappear.

If you really do have people whose only motivation is money, you need a better team: they’ll jump ship as soon as something more lucrative comes along – instead of changing only when the work becomes more boring .. or more interesting elsewhere.


1 I know it’s not a word – I’m using it anyway
2 Divide the mortgage amount by 180, and you have the rough base payment on a 30 year mortgage (for the under 5% mortgages I see in mid-2013); your base payment is the home’s cost *2 / 360 (number of months in 30 years) – or just price/180
3 I positively despise the term “Human Resources” – employees are only “resources” to the MBA types: they’re people, and should be accorded good treatment (including referentially) as such