I recently was asked by a client for some advice in a tough situation: She had applied for a lateral but much higher paying position in her own company and was told that she was far too valuable in her current (lower paying) role to be considered for the new job. This obviously did not sit well with my client and she made a strong case for getting a pay bump to stay in the current position. Management agreed and made promises that when the next budget for her department was approved, my client would have a raise to bring her salary into parity with the other position that she was trying to move into.
Fast forward nine months and, though the department budget was approved with funds for the pay raise, she was told that “HR” would not sign off on the raise for various reasons. Most of those had to do with preserving pay scales for all for equivalent positions, and although HR agreed that some of the jobs equivalent to my client’s position pay much more, they are reluctant to raise any more of the salaries in that organizational level for fear of inflating all salaries. While may be a valid fear, it really does not help my obviously frustrated client.
This stuff happens all the time. Here’s my advice to people in a similar position and also a quick bit of advice for HR professionals on the other side of the issue:
For Those Who Aren’t Getting A Promised Raise
1. As tempting as it is to blame a monolithic entity like your HR department, this is not really their fault. Even if it seems unfair to you, they are tasked with creating a sustainable and equitable salary structure throughout the organization and are almost certainly “just doing their jobs.” In other words, they were not the ones who promised you the raise, so they are not the ones failing to come through on their promise.
2.Therefore, the blame falls squarely on the boss that promised the raise. Either they didn’t anticipate the push-back from HR or they are unable or unwilling to make a compelling enough argument to push the raise through despite the HR objections. Probably both. This fact was difficult for my client to grasp as this boss felt much more like an ally in this battle and not the person failing to deliver on a promise.
3. My advice was simple: sit down with the person who promised the raise and tell them that you appreciate how hard they tried to get the promised raise. Then explain that given the situation and the long time you’ve waited for the raise, that your disappointment in not getting it is a major factor in your future motivation to stay in your current position and deliver your high level of performance. This isn’t the same as a threat to quit. Rather it is a completely honest statement of what is happening, and shifts the situation in the manager’s mind and HR from compensation to retention. In other words, now the desired and promised raise is not about what is fair for everyone, it’s simply about how much it’s worth to the organization to keep you.
4. It is fair to point out that a highly possible outcome for this situation is that the boss either decides to let you leave and/or cannot convince HR to approve the raise to keep you. Given the situation, this might be a blessing in disguise, especially if you are a top performer. Your chances of getting paid in accordance to your talent and experience at your current organization is not good if they can’t/won’t deliver on this kind of promised raise. Another company that sees the opportunity to acquire a top performer will typically pay much more than your current company will pay to keep one they already employ at a lower cost.
For HR Professionals – Think About Retention
1. Remember the rule that current exceptional talent is always cheaper than potentially great outside talent. Although you obviously need to preserve some kind of equitable pay structure for similar positions in your organization, you probably also agree that high-talent or valuable employees are worth more than average employees. This is exactly why you hire for positions using salary ranges. If you aren’t doing it already, maybe those ranges should be used more aggressively in employee retention as well. If your pay structure currently says a job level should be paid between X and X+20%, perhaps it is warranted to change that formula to X to X+50% in order to keep high talent in your organization with that extra 30%.
2. Don’t get misled by trying to stick to a level of ‘fairness’ on paper that doesn’t correspond to what is actually happening. Think about it this way: Employee A and Employee B both do similar jobs. Employee A is not only extremely good at their job, they also are a person that would be an obvious candidate to replace their boss if that person left. On the other hand, Employee B is fairly good at their job, but lacks the potential to move much beyond their current position. Do these two employees make about the same in your organization? Probably. Or worse yet, the factors determining their relative compensation revolve more around initial hiring salary or the amount of time each employee has been with the organization. Do you think that seems fair to the high potential talent? Not really. And in any case, it just isn’t in the best interest of your organization for Employee B to make close to the same salary as Employee A. If they were both new applicants to your company, who would be offered a better salary? This is a good indication to what they might be worth relative to each other at another company. Any guesses on which of these two Employees will be leaving first if their salaries are close to the same?
Finally, for those of you wondering “what happened?” — My client took the advice and she eventually got the raise. She is both moderately happy financially and moderately demotivated that she had to fight for what was promised to her. While her company did the right thing to retain her, they probably regret the way they handled it in the first place, as she will require more attention in the future that was not necessary.