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Underpaid (Live)
Do you deserve a higher salary? In a live taping with an audience of compensation experts, Dan and Alison answer your questions with the help of Susan Hollingshead, the chief...
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Do you deserve a higher salary? In this episode of HBR’s advice podcast, Dear HBR:, cohosts Alison Beard and Dan McGinn answer your questions in a live taping with an audience of compensation experts. With the help of Susan Hollingshead, the chief people officer at Vendini, they talk through how to get more money when you haven’t been in your role long, the company isn’t giving out merit increases, or you’re at the bottom of your job’s salary range.
Listen to more episodes and find out how to subscribe on the Dear HBR: page. Email your questions about your workplace dilemmas to Dan and Alison at dearhbr@hbr.org.
From Alison and Dan’s reading list for this episode:
HBR: How to Ask for a Raise by Carolyn O’Hara — “Pitch your raise as not only recognition for past achievements, but also tacit acknowledgment that you are a dedicated team player committed to growing with the company. Lay out your contributions, then quickly pivot to what you hope to tackle next. Assure your boss that you understand his pressures and goals, and pitch your raise as a way to help him.”
HBR: New Research Shows How Employees Feel When Their Requests for Raises Are Denied by Lydia Frank — “According to our analysis, 33% of employees who were denied a raise were provided no rationale. Of those who did receive some rationale (whether budgetary constraints, performance, or some other reason), just over 25% actually believed it. And of those who didn’t believe the rationale or didn’t receive one, more than 70% said they planned to seek a new job in the next six months.”
HBR: How to Get a Raise When Budgets Are Tight by Peter Bregman — “Think like a shareholder of the company. Ask lots of questions about the strategy, what’s keeping the top leaders awake at night, how your department impacts revenue or profitability, and what’s important to your direct manager. Identify, with your manager, the top two or three things you can work on that will drive revenue or profitability. Once you’ve had that conversation, you’ll have your raise-worthy work focus.”
HBR: 15 Rules for Negotiating a Job Offer by Deepak Malhotra — “Sadly, to many people, ‘negotiating a job offer’ and ‘negotiating a salary’ are synonymous. But much of your satisfaction from the job will come from other factors you can negotiate—perhaps even more easily than salary. Don’t get fixated on money. Focus on the value of the entire deal: responsibilities, location, travel, flexibility in work hours, opportunities for growth and promotion, perks, support for continued education, and so forth. Think not just about how you’re willing to be rewarded but also when.”
DAN MCGINN: Welcome to Dear HBR: from Harvard Business Review. I’m Dan McGinn.
ALISON BEARD: And I’m Alison Beard. Work can be frustrating, but it doesn’t have to be. We don’t need to let the conflicts get us down.
DAN MCGINN: That’s where Dear HBR: comes in. We take your questions, look at the research, talk to the experts and help you move forward.
ALISON BEARD: So, today we’re talking about people who are underpaid and what they should do about it with Susan Hollingshead. She is the chief people officer at Vendini, a box office management software company. Susan, thank you so much for joining us today.
SUSAN HOLLINGSHEAD: It’s my pleasure.
DAN MCGINN: Now, Alison, before we get started we want to tell our listeners that we’re doing something completely different today. Ordinarily, we tape the show at our studio in Boston. Today, we’re at Disney World.
ALISON BEARD: A very different place.
DAN MCGINN: We are at a compensation conference put on by PayScale and we’re having this conversation today in front of a live audience. [APPLAUSE]
ALISON BEARD: That’s right. We’re incredibly excited to be here. This is our very first live taping of Dear HBR:. And the best part is this crowd in addition to Susan, we have all of these pay experts in the room who are going to help us answer our listeners’ questions. So, who here is ready to help us give advice today? [APPLAUSE] All right! I like that response.
DAN MCGINN: Are you ready to get started?
ALISON BEARD: Yeah, let’s do it.
ALISON BEARD: Dear HBR: I’ve been at my company, a large technology firm for four years. Every six to eight months I’ve been moved to a new team. Each time I move I take on more responsibility and lead more complex products. I’ve received great reviews each year. The problem is I’m not receiving compensation that correlates with the increasing responsibilities. During one prior move, the manager said I’d receive a large pay increase, but it never happened. Last month I was told I’m moving to a new team. From the first one on one with my new manager, I told her that I wanted to review my compensation. She reviewed the pay scale and told me I’m being paid the lowest salary possible on my current level. She told me the median salary for my level is $30,000 higher than what I make. But the manager told me that the company will only review salaries once a year. That I won’t see a change for another six months and that it will probably be a small increase. How should I handle this situation in which my manager acknowledges that I’m being paid far less than I should be, but isn’t able to fix it?
SUSAN HOLLINGSHEAD: This is a tough question for a lot of companies today. If this person is indeed a star performer and they have in fact taken on significantly different, not just more, but significantly different kinds of job duties, than their peers, and suddenly run into a budgetary problem. Because next year you’re going to have to take half your merit budget to get this person up to where they need to be if you can.
DAN MCGINN: I feel for this guy. I can sort of hear his frustration. It strikes me that there’s sort of a good cop, bad cop element. You go to your boss, you’re underpaid. The boss empathizes, feels your pain and then says I’ll go try to do something about it and then their hands are kind of tied. I think it undermines the credibility of the supervisor. It’s a big problem.
ALISON BEARD: So, Susan you’re focused on the organization and what’s going wrong there. Dan, you’re focused on the manager and what’s going wrong there. I want to get back to this letter writer. I think the biggest problem is that he doesn’t have an advocate and I think that’s probably because he’s been moved around to so many different managers. And his new manager isn’t going to go to bat for him. I don’t know why he or she would. So, my thought was is there a way to sort of marshal the support of all the previous bosses that you’ve had, pair that with your reviews, your performance records, all your accomplishments and then go make a case to HR. Is that a crazy idea Susan?
SUSAN HOLLINGSHEAD: It’s not a crazy idea. I think it’s an actually very good idea. I think you have to be careful about how you put that together because we don’t know what the culture of this company is. But I definitely think the first step might be to approach his supervisor and say hey, I know that probably your hands are tied. So, I’d like to talk to the HR department about this because long before I came to work for you, and that kind of let’s this supervisor off the hook and maybe deescalates them a little bit, this problem was evolving. So, do you mind if I go talk to somebody in HR in the compensation department about what steps could be taken to address this.
ALISON BEARD: That’s great advice. I mean I also wondered about determining his market value. And also, whether the company could easily replace him for what he’s currently being paid.
DAN MCGINN: Yeah, Patty McCord from Netflix, who we’ve published several times in the [Harvard Business Review] magazine when she was running talent at Netflix for many years, she would encourage her people to interview as early and as often as they possibly could. She said, look we might be underpaying you. The only way we can know that for sure is if you go out and get an offer and tell us about it. So, she would encourage people to go out and do that. Not a lot of companies want their people out doing interviews.
SUSAN HOLLINGSHEAD: She could do that quite comfortably at the time and I know Patty because their corporate strategy at the time, they didn’t give equity like a lot of companies in Silicon Valley do, was to pay at the 90th percentile of the market. So, I think she was encouraging them to go out because she knew they’d come back and say whoa. I’m actually being paid a lot of money here.
DAN MCGINN: Yeah, it’s interesting. When I think about compensation, I was woefully underpaid through most of my twenties until somebody made me an offer and suddenly, it corrected in a very dramatic way. Probably not what progressive companies should be doing, but–
SUSAN HOLLINGSHEAD: I think sadly, that we tend in too many companies to do a very inadequate job of budgeting extraordinary increases. Merit’s get budgeted, but we don’t budget money to deal with these situations where you’ve got a superstar who’s really taken off and they’re compensation begins to fall behind based on their performance. And literally, the position is, well, there’s just no money to give them that big of an increase. And that to me is a real failure of the C-Suite.
ALISON BEARD: But how can our letter writer affect that in any way?
SUSAN HOLLINGSHEAD: They can’t. [LAUGHTER] They can go talk to HR. Maybe HR can. Maybe there is a budget for things like this and hopefully, most likely they will. If the company’s just like, you know what? We’ve got a limited amount of money and this is the way we handle things. Then if this is a great employee, sadly they’ll probably lose him or her eventually.
ALISON BEARD: So, given sort of how big a gap that he sees between what he’s making and what he should be making, what happens if they come back to him with only a modest increase? What should his reaction be?
SUSAN HOLLINGSHEAD: It depends on how much he loves the company, what he thinks going to happen in the future. It is going to get equalized or not, does he really believe them. You know, my feeling is if I get kind of halfway there, I think I’d still really have my doubts about this company.
DAN MCGINN: Good. So, the microphones are on. We love when people disagree with us. So, tell us where we were wrong, and let’s try to help figure what to do. By show of hands, who thinks there’s a reasonable path forward for this guy to get a raise that puts him more in towards the median range of where he is? Hands?
ALISON BEARD: Hmm, a third?
DAN MCGINN: Yeah, a third. Yeah, wow, I would have guessed higher on that.
ALISON BEARD: Me too.
DAN MCGINN: Now, obvious question. How does he go about doing that? Yeah.
MALE AUDIENCE MEMBER: One thing that they might want to consider is the other type of benefits beyond base pay that they could leverage when talking with their managers about potential increases. Maybe is there a variable component to their pay? Spot bonuses that could be considered? And even the concept of, well, if I’m not going to get a base pay increase, can I get some funding for potential certifications, or a flexible work arrangement.
DAN MCGINN: Yeah, Deepak Malhotra from Harvard Business School, he calls that thinking about other currencies. Good. What else?
FEMALE AUDIENCE MEMBER: I think there’s a little bit of missing pieces for me. I think an honest conversation with his leader or HR is really important here. But he could be very newly promoted to the role, even though he’s been with the company for four years. So, paying lower in the range and the rotation might very well be to gain the skills he’s actually gaining to be paid closer to the median. So, maybe there’s the path there that he’s not aware of.
DAN MCGINN: So, it sounds like two things there. It sounds like understanding what the trajectory is and understanding —
FEMALE AUDIENCE MEMBER: Where he is now.
DAN MCGINN: Yeah, where he is now. And some patience too.
FEMALE AUDIENCE MEMBER: Although he’s been promised a raise once and not gotten it. So, that makes me a little bit cautious about the company and their truthfulness.
DAN MCGINN: So, Alison, what should we tell this underpaid guy?
ALISON BEARD: So, we really sympathize with him. We think the organization definitely needs to review its compensation strategies. We think the manager needs better training on how to talk to employees about pay. But in terms of what he can do, we think he definitely again, like the advice we gave earlier, needs to investigate his market value, needs to see if he could easily get another job at higher pay and also, whether the company might be able to replace him at what he’s being paid. Armed with that information, he should ask his manager if he can talk to HR, or someone more senior at the company because he really needs advocates who understand sort of his trajectory of performance. At the same time, he could be patient. He needs to better understand the path that he’s on, what the organization expects for him, how they intend to compensate him in the future, but then he really needs to ask himself whether he trusts the company anymore. If he doesn’t, he should explore other opportunities.
ALISON BEARD: Should we move onto the next question?
DAN MCGINN: Ready for number two.
ALISON BEARD: Let’s do it.
DAN MCGINN: All right. Dear HBR: I’m a recent college graduate. After graduation, I was able to get a job in the Human Resources Department of a government agency. I’ve been here for about seven months. In our department, my manager oversees two salaried HR Analysis, plus me. My job title is Hourly HR Technician. It’s a new role, so the duties aren’t very clearly defined and right now it’s a contract position. My manager hopes to make it permanent sometime soon. Overall, I enjoy my job. I find it somewhat challenging and the learning curve has been steep. My manager is incredible, both within her supervisory duties and in her support of my professional development. Here’s the problem. I’m regularly outperforming the two salaried analysts in the department even though I’m paid 45 percent less than they are. I’ve been going above and beyond in my job and I share many responsibilities with the analysts, which wasn’t anticipated when this role was created. The analysts also frequently ask me questions about complex situations, even though they have much more HR experience than I do. I don’t want these extra responsibilities taken away from me because they are incredibly learning opportunities. But I’m not being appropriately compensated, and the unfairness is frustrating. My manager understands my frustration. She said that if we were working in the private sector she would hire me on as an analyst in a heartbeat, but she doesn’t have that kind of flexibility in government. And even if one of the current analysts left, I don’t meet the official requirements to be hired because I don’t have a business degree. I am working on an undergraduate certification in HR and some other certifications to increase my credibility. I’ve thought about looking for a new job, but it’s very difficult because I’ve only been here for seven months. But I don’t know how much longer I can stand this, especially when the higher paid analysts complain about how much they hate their jobs and how much they want to quit. Am I just being impatient or entitled? Should I resign myself to remaining underpaid and if so, for how long? Or, is there a way to fix this unfair situation?
SUSAN HOLLINGSHEAD: Woo. [LAUGHTER] Woo-woo. [LAUGHTER] That is about 10 questions within a question and they’re all really, really tough ones. Parsing out a couple of things, she works for a governmental agency. She’s in a contract position. We don’t know exactly what the job duties of the other analysts she’s referring to are compared to hers, nor do we know how seniority and long-term performance are factoring into her compensation and probably a good deal is my guess, is that one of the reasons they’re earning what they’re earning, and it is a valid distinction legally, is it they’re in permanent positions. They’ve probably been there a while and they probably receive performance based or depending upon the governmental agency, automatic step ups based on seniority in their positions. So, that’s one thing to consider.
ALISON BEARD: So, you do think that she’s impatient and entitled?
SUSAN HOLLINGSHEAD: No. [LAUGHTER] No. I wouldn’t say that. I would say maybe inexperienced. Maybe needs to understand more about the environment that she’s working in and what the opportunities and constraints of a governmental structure are. And one of those constraints is getting funding to make that job a permanent job. I mean she says that she would have to have a business degree. That’s true in some job specs in some governmental agencies, but usually there’s also a provision for substantially equivalent experience. So, what that really is, there’s a lot of missing information here. One of the things that I think might make her feel a whole lot better is to start down the path in a very methodical way of gathering some of that information. If she has this wonderful manager, and it sounds like she does, and it sounds like she really likes their relationship, then it’s time to start a thoughtful conversation about her situation.
DAN MCGINN: I think she’s impatient. [LAUGHTER]
SUSAN HOLLINGSHEAD: That could be.
DAN MCGINN: She’s seven months out of college. I think her first goal should just be to get a permanent position here to move out of that contract role into the permanent position. The thing I focus on the most in this letter, if you get beyond the frustration are I love my supervisor and I’m on a very steep learning curve. I know a lot of 23-year-olds who did a great job in college and would love to be in a place where they love their supervisor and are on a really steep learning curve. Life is about tradeoffs. Oftentimes you’re trading off pay for lifestyle, or pay for learning opportunities. And I think she needs to pull the lens back a little bit which admittedly can be really hard when you’re 23 years old, and recognize if you outperform people, over time, the market’s going to recognize that. And I hope that this situation will get rectified not sooner, but later if she can be a little bit more patient.
ALISON BEARD: It’s funny. I had totally the opposite reaction. I said she has to get out of this rigid government, bureaucracy that’s not letting her advance as quickly as she wants to and clearly deserves to. Dan, you made a very valid argument however.
DAN MCGINN: You’re younger than I am so you —
ALISON BEARD: Not by much. Not by much.
SUSAN HOLLINGSHEAD: And I’m older than both of you probably put together so, I’m the great conciliator. I think you’re both right. I think she’s impatient. I think she’s in a tough situation that may not be fruitful for her. Yeah, that learning curve is really worth a lot sometimes.
ALISON BEARD: Well, the question I had for you Susan, she is in HR. Would she face the same problems in the private sector?
SUSAN HOLLINGSHEAD: You know, that depends entirely on the company.
ALISON BEARD: It seems like her personality doesn’t match the culture that she’s in. So, I would love to see her go find an organization that values that ambition.
SUSAN HOLLINGSHEAD: If she’s adequately assessing herself. And there’s a second question and it sort of sits under Dan’s suggestion that perhaps she’s impatient. Is her own self-assessment valid? Or, is it inflated? And it’s not unusual, I had a bunch of kids, I can say it’s not unusual at 23 to have a somewhat overinflated self-view. [LAUGHTER]
DAN MCGINN: I’ll jump in and say if this were a television show, people would see a lot of nodding heads and a lot of knowing smiles from the people in the audience here.
SUSAN HOLLINGSHEAD: But if she is that good and she is really capable, then one of the things I would do if I were she is look for a really fast-growing industry and company where she has the opportunity to move up quickly. That might solve the impatience problem.
DAN MCGINN: That’s great advice.
ALISON BEARD: Terrific. So, we would love to hear some advice from all of you. Again, if you want to fight with us, please do.
FEMALE AUDIENCE MEMBER: A couple of things. I totally agree with you that I think it might be both here. I think it’s very possible for people to expect the next move for them, especially when they’re that young and I’ll speak for myself personally too. But I’ll also just say, the times in my life when I felt the most unhappy with my job has been when I’m comparing myself to the people around me, as opposed to how I’m contributing to the job, what they’re asking of me and what people think of how I’m performing. So, I’m sure that its super frustrating to watch other people around this person complain about their job, that they want so badly. But at the same time, I don’t know that that’s going to lead to success or any amount of happiness when making these kinds of personal calls.
DAN MCGINN: So, the code for what you just said which I tend to say all the time, is swim in your own lane.
SUSAN HOLLINGSHEAD: And you know one thing I think we should acknowledge, pay is just very emotional. I mean we tend to take it as a measure of our own self-worth and I think most companies still lack transparency or even the knowledge of how to have constructive conversations about compensation with their employees.
ALISON BEARD: And I would also just add to the point of her youth. I feel like there’s a growing awareness that if you tolerate being underpaid for a long time when you’re young, that will impact you later on. So, you need to start having these conversations earlier and earlier, even if it’s not after seven months into the job. We’d love more comments.
FEMALE AUDIENCE MEMBER: So, I might disagree a little bit with that last statement.
ALISON BEARD: Oh, good.
FEMALE AUDIENCE MEMBER: So, I think the core message that I would give her, advice I would give is you have to go slow to go fast. So, take your time. Take your time. Take advantage of those learning opportunities. Take advantage of the opportunity that you’re working for someone who seems to be so supportive. Learn everything you can so that you can build your resume and then move onto that next thing. I feel like the salary will come.
ALISON BEARD: That’s great advice.
DAN MCGINN: Is there a hand back there?
MALE AUDIENCE MEMBER: My advice to her would be stick it out. Seven months in, if you leave now, we will not consider you for the next position. Hang in for a couple of years and that may be a little painful, but it’s been my experience that 23-year-olds don’t know what they don’t know. And it’s not likely in my estimation that she is doing everything that all her colleagues are doing. So, I would say hang in for a couple of years, meanwhile do the market research and determine should I move on.
DAN MCGINN: There we go.
FEMALE AUDIENCE MEMBER: I think that we’re kind of putting a lot of weight on her age. Because I know as an HR professional, I love me a go-getter. I love it. She’s studying at night. She wants to go get all these certifications and all of a sudden now she’s impatient. My advice for her would be to set a goal. Set a time limit and then check in with herself because if her values aren’t matching with the company culture, get out of there. Life’s short.
ALISON BEARD: I’m with you. [LAUGHTER] I’m so glad that someone backed me up.
SUSAN HOLLINGSHEAD: See, it was Dan. I didn’t say impatient. [LAUGHTER]
ALISON BEARD: She said impatient. She asked. Which does show self-awareness to your point, Susan.
DAN MCGINN: Yeah, absolutely.
ALISON BEARD: Dan, should we wrap it up?
DAN MCGINN: Sure. We admire her level of ambition. Clearly, she’s a go-getter. She wants to go places and she wants to go places quickly. There are some of us who think that, especially in a public sector job like this, she would be wise to be a little bit more patient. To recognize the fact that she’s being challenged. She has a great supervisor. She should be talking with the supervisor about her frustrations, about what her goals are long term. Go fast to go slow and try to learn all you can from this position before you move on. At some point, her level of ambition is probably going to make her ill-suited to staying in this public sector kind of job. She might be better off in the private sector whether it’s now or whether it’s later. We think she might be especially well-suited to a fast-growing company where roles expand very quickly. So, even if she stays at this job, she might start thinking about what kind of opportunity she should get to next.
ALISON BEARD: Dear HBR: I currently work in an assisted living center as an activities director. We used to receive raises of between three and five percent each year, based on performance. The company has been expanding, but as it does the competition is getting tougher. This year our numbers are not what management hoped and they say they need to save money, so they’ve announced that everyone will get a standard raise of one and a quarter percent. Until now, I was focused on working toward promotions and those performance-based pay increases. I thought I would be spending many years with this company, but a future of one percent raises, doesn’t look very attractive. It would take me years just to earn one dollar more per hour. The elimination of merit raises has made my motivation disappear. I’m wondering if it’s time for me to look for opportunities elsewhere, or is there some way to show them that I’m worth more than the standard raise?
SUSAN HOLLINGSHEAD: Well, first of all, that’s a really tough and a really sad situation. Certainly, there are many companies who fall on hard times. Sometimes it’s temporary, sometimes it’s long-term. And it’s not unusual, unfortunately, when that happens, like they will cut back on many other expenses, to also see them reduce or eliminate their merit budget. I would say typically that’s not forever, but it could go on for several years. I think it’s interesting that they characterize the raise they are giving as 1.25 percent. And interesting that they didn’t choose to use that as a merit budget that they might have distributed based on performance at different levels across the company. It sounds like they’re thinking this is some sort of cost of living adjustment.
ALISON BEARD: But what can she do? I mean it seems like she’s this incredibly valuable employee. She was highly motivated before. Is it time for her to talk to her manager? Is there any wiggle room?
SUSAN HOLLINGSHEAD: I think she can do a couple of things. I think she can talk to her manager and ask her manager to the degree that the manager is able to disclose this, what she sees as the future of the company. Are we going to recover from this? Can we expect merit increases as we’ve experienced them in the past? How do you think I’m situated if we do recover and we do have a merit? Or, perhaps there’s a promotional opportunity where she could move up to a higher salary range. But all of that is a process that she ought to at least begin to a conversation with her manager.
DAN MCGINN: As the activities director, it seems like that’s a really key position. You know, there’s probably lots of people in all sorts of other positions that don’t have as much singular day-to-day effect on the quality of life for the residents. Do you think she has an argument because she’s in that singular position?
SUSAN HOLLINGSHEAD: You know, it depends on whether and how her compensations been evaluated by that company. Do they do merit-based pay? Do they evaluate that compensation relative to other positions in the company? How do they set their compensation strategy? Those are the things I think she can begin to ask her manager, but those are also delicate conversations. There’s a balance between becoming threatening and being positive and proactive and saying, I love this company and I want to be here, and I think I really contribute, and so I want to know how I can afford to stay here.
ALISON BEARD: It’s interesting because you’re sort of talking about internal conversations, the investigation that she can do about the company and my first thought was she needs to determine her market value. She needs to start doing research outside this company. She needs to look on LinkedIn or Glassdoor, or she needs to talk to other people in the industry. She says it’s a competitive and growing industry. There are lots of companies offering these services. They’ll probably all welcome a talented activities director. So, not necessarily that she should start interviewing immediately, but that she should just arm herself with data about what her worth is.
SUSAN HOLLINGSHEAD: I don’t disagree with you. There’s lots and lots of crowdsource data out there. There’s some very large databases like PayScale where she could get that information, assuming she’s in an urban area. There’s probably lots of other similar institutions she could talk to. But if she really loves this company, I think she at least needs to engage in a parallel path where it’s an internal conversation and perhaps an external investigation.
DAN MCGINN: That’s what’s missing from this letter when I read it. I get the sense she likes the company. I don’t get the sense that she loves the company. I’ve been in situations where I worked at a company that I really liked the job, really liked the people. The company hit hard times. Raises got a little bit meager, but I could see a light at the end of the tunnel and it was worthwhile. But I think you really have to have sort of a real deep engagement and a real deep emotional investment in the firm for that to work.
ALISON BEARD: Well, one thing to note is that she is doing very meaningful work, right. And that has a value in and of itself. I was thinking if she does like or love this company, or if she feels she’s in a good spot and there aren’t external opportunities, she could easily explore, is it possible to have a more flexible schedule? More vacation time? Development opportunities, since this obviously seems to be an ambitious person. So, Susan in your experience, do managers who are stuck in this sort of wage freeze, do they have that sort of flexibility? Could she ask for that?
SUSAN HOLLINGSHEAD: They very well may, and I think often these times when companies are short on cash, there are other things they can do. The other thing is, I mean she talks about a very competitive industry. How immune is the rest of the industry from this situation? Are they likely to be so competitive that they’ve cut back on expenses? She needs to look carefully at those others if she’s going to consider one because she could fall in the same situation again.
DAN MCGINN: Let’s get sort of a general indication here. By show of hands, how many people think that if she’s not happy with the one percent raise that there’s not going to be an internal solution? She’s going to end up having to look for a new job to get what she wants?
ALISON BEARD: Wow. Very few actually. That’s surprising to me. I would just ask a question of the audience. When she does have this conversation with her manager, what should she do to prepare? I would just love to hear some advice on that.
FEMALE AUDIENCE MEMBER: I’ll just contribute that I think to some degree she has to go into this conversation with some realistic expectations and not necessarily demands. So, I think it’d be good for some self-reflection, and to your point, recognizing how bad do I want to stay, and for what reasons do I want to stay beyond the compensation?
ALISON BEARD: Thank you so much.
MALE AUDIENCE MEMBER: I think the internal promotion opportunities, the right one, but not just based on time and tenure and performance, but the skills, the values she can add. We can’t overpay for every job just because the person’s been there. We need to pay for the skills and the value they can contribute to the organization.
DAN MCGINN: That’s a good point. So, there may be credentials or additional things she can bring to the table that would allow her to be more valuable to the firm and to ask them to monetize that value. Huh?
SUSAN HOLLINGSHEAD: You know, I’d add something which is we all assume because she said so that she’s underpaid. We don’t necessarily know that that’s true. So, we mentioned doing her external research. I think it’s important that she find out before she goes too far into this conversation, is she actually underpaid compared to her job elsewhere in similar industries? I think that’s a really important piece of knowledge to have under her belt as she thinks about her options.
DAN MCGINN: Good. Yeah.
FEMALE AUDIENCE MEMBER: I would just like to piggyback too on the research piece. It’s not just that, but also research what are the average increases that are being given across her industry? It might be an industry thing, not just a company thing.
DAN MCGINN: Up front.
FEMALE AUDIENCE MEMBER: So, one thing that occurred to me, it seemed to me that she was getting that information that, was it 1.25 percent?
DAN MCGINN: Right.
FEMALE AUDIENCE MEMBER: For everybody across the board. I think often I’ll give the advice not to take kind of a piece of information like that or bad news to you, or no when you’re asking for a raise, as the end of a conversation, but the start of a conversation. So, I would also encourage her to ask more questions. Often the communication breakdown is part of the issue, is that the employer feels like they gave enough information, but employees are left with other questions and they might not be asking them.
ALISON BEARD: That’s great.
SUSAN HOLLINGSHEAD: I think there’s a thread that runs through all three of these questions, which is most companies are still not doing a good enough job of teaching their managers how to talk about compensation. I mean, it’s possible that all three of these organizations have perfectly fine compensation strategies, programs, salary ranges, but the managers have not been equipped to talk about those.
DAN MCGINN: Lots of heads nodding at that as well. So, it seems like a lot of the audience agrees with that sentiment as well. So, Alison.
ALISON BEARD: I’ll just sum up our advice. So, first, we think that our activities director should understand that wage freezes are a fact of organizational life. And it might be for a limited time, so she really needs to understand what’s going on at the company and how long it will last. At the same time, she could start an external investigation. What is her market value? How much might she be able to make elsewhere? And then she should talk to her manager and explore whether it would be possible for her to get a promotion that would give her higher pay, whether there might be other perks like vacation, development opportunities. They should focus that conversation on the skills that she brings to the table and hopefully work out a solution together.
DAN MCGINN: Susan, thanks for helping us find some answers for these people.
SUSAN HOLLINGSHEAD: It’s been a pleasure.
DAN MCGINN: That’s Susan Hollingshead. She’s the chief people officer at Vendini.
ALISON BEARD: Thanks to the listeners who wrote us with their questions. If you, in this crowd or out there listening have a workplace dilemma, please email us, and we will do our best to help. The email address is DearHBR@HBR.org.
DAN MCGINN: And if you’ve enjoyed today’s episode, please subscribe on your podcast app and please review the show on iTunes. [APPLAUSE] Thanks for listening everybody. You were a great audience. Thanks, and thanks for the great comments.
ALISON BEARD: We really appreciate it.
DAN MCGINN: I’m Dan McGinn.
ALISON BEARD: And I’m Alison Beard. Thanks for listening to Dear HBR:.