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Three Salary Secrets and Three Salary Myths
Posted By Jim On 11/07/2006 @ 8:02 am In Career | 3 Comments
Everyone who works should read this CNN Money article , which outlines the three salary secrets and three salary myths CNN Money has identified in our modern workplace. Some of these make sense, especially at the company I used to work at, and some I had no idea about so this was an eye-opening article for me.
Secret 1: Your pay doesn’t necessarily reflect performance and seniority
At my old job, incoming college graduates were making approximately the same as people who had been there three years. In fact, I was willing to bet that the people who had been there for three years (I was there for three years) were making about as much as the people who had been there for six. “Some companies are proactive about performing an equity analysis on a regular basis and correcting for the problem. If they discover that the gap between your pay and the newer hires isn’t wide enough, they may give you a larger bump in salary than the usual merit increase.” But then again, some companies don’t notice and in those cases you should bring it up to your manager – hopefully they’ll do something about it, if they can.
Secret 2: There’s more raise where that came from
CNNMoney claims that when it comes to merit increases, your boss has the power to give you more raise, but then they paint the picture where the top performer gets 5% and the below-average gets 2%. That means, after inflation, the top performer really only gets an increase of less than 2% and the below-average has lost purchasing power. But they say that if you are unhappy, bring it up because a “smart company” is willing to pay you a little more in order to keep you. When I received an average raise, I was also told that my manager “would work with me closely and consider an adjustment” but we hadn’t even set goals for 2006 (or had a group meeting) when I left at the end of August. Beware of just words.
Secret 3: When you’re told they can’t pay you more now, budget may not be the issue
This one is the best – it’s essentially saying that your boss might be telling you something. My old company was having a great year, making tons of money, except raises in my group “weren’t going to be good.” However, when I told them I was leaving for another job for more responsibility and more pay, they offered to try to counter the offer… so did they really not have any money or were they just playing the probabilities (that I wouldn’t leave, especially since I was midway through an MBA)? So maybe they’re saying something… maybe they’re not.
Myth 1: Your pay is all about you
CNN Money claims that companies use salary surveys and a systematic process in order to come to your salary. I learned that at my old company, they score each one of their employees on a yearly evaluation (that was no more than a list of “goals” with basically arbitrary scores alongside them), rank them, and then declare the top X% gets a raise and the rest doesn’t. Then they take a few quarters and try to split it amongst the top talent. In the end, how you performed that year, in that situation, hardly matters because your performance is just a single number.
Myth 2: Bosses pay more if they like you
I think this myth was weakly defended by CNN Money, I do believe bosses do hook up the employees they like as long as that person is working their butts off and the decision is easy to defend. I was pretty sure at my old job that the person in charge of the program I was a part of gave higher raises to people who kissed up to him. He was the type of guy that was only there because of his last name and not because of his ability, so you can understand why he hooked people up, since he had been hooked up. Does this happen elsewhere? I’m absolutely certain it is, nepotism ain’t dead folks, no matter what CNN Money says.
Myth 3: You can’t negotiate severance
I had no idea someone could negotiate severance considering the company wants to let you go… but according to CNN Money: “you may be able to negotiate a better package if you have some points of leverage… are you the only person at the company familiar with important details of a current project or who knows how to perform a critical function for the employer?”
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