There are exceptions: when salary is the ONLY problem, and usually that topic will have come up. So if the employee came to talk salary, was denied, then got some offers, came back with them, and asked again, then sure. But any company worth its salt will have done something before the other offers were ever in play.
If someone gets offers right off the bat and never talk salary first, then they'll be gone in 6 months unless you give them way above market rate.
Career advancement some times requires that the current manager say :
"Sofia, this is a great opportunity for you. While we could make you a counteroffer - you really should make the move to advance your career. Please let me know if you want a counteroffer anyhow."Raising the pay of one employee out of band will usually lead to group behavior, meaning others do the same for the same reasons. I was also mostly budget constrained in the past and could not raise budget to significantly (say 20%) pay raise several employees.
If the employee for whatever reasons earns say 10% below average of the other employees, I would get her a pay raise.
I figure the only way to really fix this 'the only way to get a raise is to leave for a year' method is to figure out how to include retention in engineering manager's perf evaluation.
What else would they be motivated by? It's not their hobby.
This doesn't mean they are also not into programming and coding challenges -- but those are constants that they can find in another employer too.
if they like the programming, it's not that they can't find a programming job elsewhere.
>2. If you give in once to this, the employee will come back 6 months later with demanding the next pay rise.
Sounds like the slippery slope fallacy. Even if they do, you can deal with it (and e.g. let them go) then.
The actual work (what is being done), the mission of the company (are you helping kids send pictures that disappear after 10 seconds or are you working on finding a cure to hearing loss?), the team, the location (do I have to spend 2h commuting?), the opportunities to learn, the opportunities to grow, etc. We each value different things, but if money is your only consideration, you will be treated as a "disposable mercenary" because that's exactly what you are. You will never be trusted, because your loyalty is directed at whoever shows more $$ to you.
Companies value more than just pure technical skills: loyalty, teamwork, communication skills, attitude, ethics, drive, independence, etc... If you only play in that one dimension, the game becomes very rough for both sides. I've never seen that work well, except for very short term assignments.
The problem is that most companies treat you that way anyway. If you want me to not act as a "disposable mercenary", want me to stay longer and want me to give you loyalty, give me a contract to prove it. Unless you're willing to surrender your power to dispose of me at will, I'm going to treat you as if you'll use it at any time.
Work is a simple contract. I give time. I get money. Period. The company will not hesitate to throw me under the bus if it can bring more money, and I do not see why I should be more considerate toward them ?
Honestly, I would rather work somewhere that is willing to get rid of useless and/or corrosive employees than somewhere that refuses to do so out of misguided loyalty.
Its a strange problem I guess. Systems are put in place to keep good employees around but are abused by bad ones. Then those systems are thrown out and everyone suffers.
I can say of a previous employer, all of the senior management took pay cuts before impacting the rest of us in a downturn. When my department did have to reduce by a person (I was the obvious choice to downsize), the entire (small) department, including my boss, took a furlough day instead. (Obviously, I started looking for new offers at this point, but I was never unemployed due to this.) Love that company. Great people.
I think a lot of people here may have experience with two types of terrible corporate environments: Faceless entity behemoths and cutthroat startups. There's a whole realm of small to medium traditional businesses out there where the owner knows everyone personally, and actually cares about the people who works for them.
Of course you have the right to deny a rise and let the employee go, maybe it really doesn't fit in your budget and/or you can hire someone else for less, but don't talk like the employee is wrong for searching a opportunity to grow.
Companies exist to make money.
Money must be my only consideration, because that is usually the only thing of value that I get out of the employer-employee relationship.
All those work-related properties reduce to money and time. A shorter commute means less time spent in traffic and less money spent on fuel and maintenance, but often also means more money spent on housing. If my company wrote software for managing cancer trials instead of flight mission planning for military aviation, I might give them a break of 2-3% on my salary expectations. But if they offer $20000/year less than I currently earn (anecdotally, this has happened to me), well, sorry doe-eyed leukemia kids, but I have to make rent.
As for the team... Well, do you pay them enough to stay? People who entice others to join because they foster a great team environment should be paid more, not less, and your suggestion implies the opposite--that people who work on a good team should be willing to accept lower salaries.
If you have employees coming to you with competing offers every six months, that means one thing: your raises are not competitive with the market. We all know that job hunting is a stressful, unpleasant ordeal, and that is a cost that satisfied employees won't be willing to pay. If you see competitive offers from your employees, not only do you pay too little, but you pay so little that someone was willing to do the job-hunting dance in order to find better pay.
Anecdotally (n~=9) I have found your final statement to be inaccurate. Companies are interested purely in how much money they can make from your work. Your individual manager at a company may value more things, but those things might not translate to another manager, or might not help you if the money is ever a problem. For instance, you might get a $500 discretionary bonus for exemplary work one month, and be laid off with 3 days notice and no severance the next (this actually happened to me).
Companies value money. I value money. As long as we are both honest about this, it tends to work out. It doesn't get rough; it's just business as usual. It is only when people start lying about how their companies value things that problems occur. Based on the statistics, companies generally value loyalty at -3% of current salary per year, or worse. The article implies -7%, I think; the math wasn't entirely clear, and heavily assumptions-based.
A wage that will enable me to buy a house and my kids to go to college.
Loyalty is not a asset that a bank nor college accepts as payment.
Furthermore, a company is a paper entity, a legal fiction. A company is not a person. A company has no conscious, no dreams, no aspirations.
No human being should pledge loyalty to a piece of paper - which is not capable of returning that loyalty.
Being employed with a company is a business transaction, where one party sells their time and skills in exchange for money.
Aren't employees disposable anyway? When the company runs low on cash, they are not going to hesitate to fire you to restore the financial health of itself.
Companies are motivated by money. It is in my interest to be motivated by money too. Companies are not loyal to employees. It is foolish to expect employees to be loyal to companies.
In my experience, there is a substantial difference in the quality of work of a person who cares about what they're doing and someone who doesn't care. Perhaps you've worked with a contractor who was willing to do a half-assed job, only fixing things if they were cornered. I certainly have.
Money can motivate that caring only so much.
Caring about money, caring about mission and loyalty and caring about work are all orthogonal to each other.
Working conditions (am I expected to be on call/respond to contact outside of hours), vacation time, flexibility in work from home and in leaving for appointments, how in traTed by my colleagues or other teams (does the sales department continuously overpromise and put me under fire?). The office space - I'd rather be in an open plan with my own "area" than in a cubicle farm with 500 other employees and no natural light.
Obviously pay is important but I'm not going to jump ship for a 5% raise if it comes with a worse work/life balance. Also, not everyone lives in San Francisco. There aren't _too_ many companies hiring c++ programmers in my area, so I'd go through them all in 5 years and probably annoy a lot of people along the way. Personally, for something that takes up so much of my time (40 hours a week) I'd rather be comfortable and get on with the people I share a working space with, than have them waiting for me to jump ship in 6 months
The Surprising Truth About What Motivates Us: https://www.youtube.com/watch?v=u6XAPnuFjJc
Based on studies done at MIT and other universities, higher pay and bonuses resulted in better performance ONLY if the task consisted of basic, mechanical skills. It worked for problems with a defined set of steps and a single answer. If the task involved cognitive skills, decision-making, creativity, or higher-order thinking, higher pay resulted in lower performance. As a supervisor, you should pay employees enough that they are not focused on meeting basic needs and feel that they are being paid fairly. If you don’t pay people enough, they won’t be motivated. Pink suggests that you should pay enough “to take the issue of money off the table.”
To motivate employees who work beyond basic tasks, give them these three factors to increase performance and satisfaction:
Autonomy — Our desire to be self directed. It increases engagement over compliance.
Mastery — The urge to get better skills.
Purpose — The desire to do something that has meaning and is important. Businesses that only focus on profits without valuing purpose will end up with poor customer service and unhappy employees.
https://en.wikipedia.org/wiki/Drive:_The_Surprising_Truth_Ab...
I'm not really sure how this often quoted study relates to retention since that is outside the scope of the study.
If you want leverage in any negotiating situation, you need to be able to walk away from the negotiation if the final terms are undesirable. The party with the best "next-best option" is usually the one most willing to stand their ground on terms, or walk.
That means you need to be prepared to lose your job when you discuss changing its terms, which implies BOTH that you should have other offers AND that you should know your boss might fire you on the spot (or worse, talk you into rejecting the other offers and also quietly stop considering you for advancement in your current role).
The key, of course, is always to understand your BATNA: Are you actually willing to leave? You can play a significantly more daring game if you're prepared to lose, rather than accept status quo or a modest improvement.
I have never succeeded in getting any raise unless I had a concrete actionable BATNA, i.e. a competing offer.
Please note that I do encourage doing "research" - it doesn't have to go all the way to an offer, but what I mean is to build confidence that you can indeed get one at the given salary. This is your BATNA, but because you're not giving an ultimatum, you don't have to walk away to a new job immediately - you can just start looking.
#2 especially - what, they'll find a better and better job every six months? Not likely. If somebody can show you how they'd be paid better somewhere else, deal with it. Denial gets you nowhere.
#3 is exactly what the above remark addresses. If I can show my boss I'd be treated properly elsewhere, the boss sure better get on board and start doing those things.
If you feel you are treated better elsewhere, as a manager I'd help you transition to that elsewhere. If that is what you really want and think is best for you, I would make it as easy for you as possible. If you think money is most important to your current situation (house, wife, kids, debt, ...) and you're skill set is beyond my budget, than this is fine with me.
I'm more interested in people-relationships than job-relationships as I have met many of my employees in other companies and we're still friends - and most of them left for a different job with probably more money. Some of them told me years later they should not have left because I usually invest a lot into people development and money is only one parameter to job satisfaction.
I'm pretty sure you're an exception.
The BATNA for the employer is training a new person who isn't going to make every 6-12 months a fight.
Suggesting that it's fine for the employee to exercise their BATNA, but that it's not OK for the employer to exercise theirs seems a bit odd.
what, they'll find a better and better job every six months?
From the commenter above, make your employer fight for you every 6-12 months.. A lot of people hate stack ranking ("making your employee fight for their job every 6-12 months"), so why do people think that companies will want to be in the reverse position.
how they'd be paid better somewhere else, deal with it. Denial gets you nowhere.
The above poster said, "wished the employee all the best with his new job.", which is dealing with it, and not denying it. It's a win/win for everyone. The employee gets a new position with presumably higher pay, and the employer gets a chance to hire someone who isn't going to make them "fight for you every 6-12 months".
So if an employee you have hired is able to get a competing offer every 6-12 months, it is worth spending time to figure why things are so screwed up in the company and resolve that.
Once or twice I can understand. Pay isn't always calibrated correctly, weird stuff happens due to company/employee history, whatever. But if your employee is consistently able to get higher offers once or twice a year then something must be screwed up.
2. Of course, because he wants to be paid like the market is paying people in his position, not to be the only idiot with a worthless salary.
Because, you know, they are asking you to offer them the same the competence is able to give.
What you want is an underpaid worker who never ask for a raise and have his mouth shut up for everything, hell you would take a slave if you could
Is there any other type of employee? You think it's a bad thing that people work for money? I'm not spending 40 hours a week out of charity. I only do it because I need money. I'm tired of people trying to make employees feel bad because they want more compensation.
Do you have a lot of millionaires trying to join your startup as an employee? If you don't, then money is probably a major motivating factor for all of your employees.
It's more likely ignorance of your specific market price than malice.
First, the employer isn't even going to know your outside market price if you don't get an offer in the first place. For you to prove that you're worth the 10% salary increase, you would have to be vetted by a prospective employer as having met their requirements to be hired at some price.
Secondly, your current employer needs to agree that you're worth that 10% salary increase. Their perception of your value may simply not match your own perception of your value.
In these situations often the employee is getting raises that do not even cover inflation. So the employee now sees their market value and would like to continue working for the company, but they have realized they could take on risk for a 20-50% raise instead.
I mean the risk equation is simple, with such a raise you can save enough cash to justify the risk even if it doesn't work out.
I always ended up taking the offer from the more generous company, and they tended to increase my pay to offset more than inflation and then a bonus to justify staying.
By saying that you'd rather they talk to you about salary directly instead of getting competing offers, you're essentially saying that you'd prefer them to be uninformed about their true market worth when having the discussion. You probably don't mean that, but that's the result.
One thing employers need to realize is that this is 95% of jobs. I'm not a developer solely for money. But I am a developer at your company mainly because of money. I would have to imagine that the vast majority of people are in the jobs they're in because of the money.
Talking about my dissatisfaction with pay during 1:1s has never got me a raise. Getting a competing offer has.
> 1. If the employee is only motivated by money, he will be gone rather sooner than later as there is always a higher offer around.
I may not be motivated only by money but money is a motivation. I am selling my skills in exchange for money, so it is in my interest to sell my skills to the highest bidder that matches my other requirements such as good role, autonomy at work, etc.
> 2. If you give in once to this, the employee will come back 6 months later with demanding the next pay rise.
Only if you are paying him below the market rate. If the pay is at par with market rate, it is not going to be so easy to come back 6 months later with another significant pay rise that is hard for you to afford.
Are you fucking stupid? Your employee is giving you a chance to retain them. They want to work for you, but can't make it work financially, and you're turning your nose up at them? For what reason? It's probably going to cost you the money to hire someone new that it would've taken you to retain them! I will never understand this line of thinking.
And, no, I don't buy the line that companies can't find the money for their payroll. Not when corporate savings are at an all time high.
> 1. If the employee is only motivated by money, he will be gone rather sooner than later as there is always a higher offer around.
So? What have you lost then? You upped their pay for a short period of time and now they're gone. Big deal. You've lost an employee who didn't want to work for you anyway. Seems like a fine outcome.
> 2. If you give in once to this, the employee will come back 6 months later with demanding the next pay rise.
OK, and if it's unreasonable, they're probably going to have a hard time getting it. Or you won't be able to retain good talent. I'd say if it's the latter, you might want to restructure your exec bonus structure.
> 3. You might have done something wrong in the past. An employee who can envision herself in the company in some years in a different role with personal development and fair pay rises (see 4.) does not leave.
First off, I like that you say "her" as though you're not part of the problem in the .75/$1 shortchanging for women (hint: it comes absolutely from companies being tight gripped on their payroll and playing hardball in salary negotiations). That aside, I'm not sure I get your point here. You're saying you wouldn't provide a pay increase, and here you're saying that your employee's perception of that being the case might be a problem. Gee, I wonder how they would've gotten that perception...
> 4. You might also have no transparent pay rise process in place and clear guide lines why people have which salary. You might also have a wide band of salaries, which will bite you sooner or later.
Yet again, not sure how this affects the instance where an employee comes to you asking for a pay rise commensurate with offers they're receiving. Seems like a good time to get your pay structure under control.
5 and 6 seem to be tips all of a sudden on how to be a worthwhile compensator, so I'll ignore those.
""" Be civil. Don't say things you wouldn't say in a face-to-face conversation. Avoid gratuitous negativity.
When disagreeing, please reply to the argument instead of calling names. E.g. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3." """
Is it civil? No, but neither is cutting the legs out of a generation of employees because you're too dimwitted -- or worse: greedy -- to not pick up that dollar next to the dime.
You can be 5% off of market or even 10% if its a nice place but once you go past that, do you really expect your employees to sit there and take it? I know my landlord's not gonna wait for me to get a raise before they raise my rent
/s
1. If the company is not paying you well now, it will also not give you timely raises or promotions, so you will have to do it again and again.
2. If there's a great team there, and the only problem is with the money, unless it is a temporary thing with known causes, odds are the entire team will leave soon. So it's not something to consider.
3. It's very likely that your employer will work towards replacing you and will let you go on their schedule. It's always best to leave on your schedule than getting it forced onto you.
"Build strict processes for potentially political issues and do not deviate—Certain activities attract political behavior. These activities include: Performance evaluation and compensation [...]"
https://a16z.com/2010/08/24/how-to-minimize-politics-in-your...
[Edit] To clarify the blackmail note: It's better to talk in the weekly 1:1 about salary expectations, changing markets or during people development focus, than to pull up a competing offer out of your hat while not talking about your dissatisfaction with pay during weekly 1:1s.
1. If the employee is only motivated by money, he will be gone rather sooner than later as there is always a higher offer around.
2. If you give in once to this, the employee will come back 6 months later with demanding the next pay rise.
3. You might have done something wrong in the past. An employee who can envision herself in the company in some years in a different role with personal development and fair pay rises (see 4.) does not leave.
4. You might also have no transparent pay rise process in place and clear guide lines why people have which salary. You might also have a wide band of salaries, which will bite you sooner or later.
5. Your salaries might also be too low and not working in the local market. This often happens when startups grow (or employee markets change) and salaries are not adjusted properly. Earlier employees - or employees before a VC round - often have too low salaries in this case. Fight for a budget rise to get every salary up in line again.
6. This might also happen if you agree to too low salaries when hiring. This often happens when you hire women, but also happens otherwise. You should always pay what the employee is worth, not what he is demanding (often too low). Don't feel happy if you hire below budget, this is a mistake. As a manager the easiest pay rise you can get for your team is during hiring.