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Pay Injustices
Are you getting paid unfairly? Dan and Alison answer your questions with the help of Shirli Kopelman, a professor at the University of Michigan’s Ross School of Business....
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Are you getting paid unfairly? In this episode of HBR’s advice podcast, Dear HBR:, Dan and Alison answer your questions with the help of Shirli Kopelman, a professor at the University of Michigan’s Ross School of Business and the author of Negotiating Genuinely: Being Yourself in Business. They talk through what to do when a poor performer gets paid more than you, when the company salary structure is making people quit, and how to ask for more money when your boss leaves and you do their job.
Listen to more episodes and find out how to subscribe on the Dear HBR: page. Send in your questions about workplace dilemmas by emailing Dan and Alison at dearhbr@hbr.org.
From Alison and Dan’s reading list for this episode:
HBR: When You Find Out a Coworker Makes More Money than You Do by Rebecca Knight — “Your impulse might be to storm into your boss’s office and demand that he fork over more cash. Or maybe you just feel like scowling across the cubicle at your higher-earning colleague with a sneer: ‘Seriously? You?’ These actions, of course, are not advisable.”
HBR: Most People Have No Idea Whether They’re Paid Fairly by Dave Smith — “Perceptions about pay don’t always reflect reality, even if employers are paying the same — or more — than similar companies. In fact, a whopping two-thirds of people who are being paid the market rate believe they’re actually underpaid, representing a huge discrepancy.”
HBR: Envy at Work by Tanya Menon and Leigh Thompson — “When you’re obsessed with someone else’s success, your self-respect suffers, and you may neglect or even sabotage your own performance and possibly your career. Envy is difficult to manage, in part because it’s hard to admit that we harbor such a socially unacceptable emotion. Our discomfort causes us to conceal and deny our feelings, and that makes things worse.”
HBR: Make Your Emotions Work for You in Negotiations by Shirli Kopelman — “Your emotions matter in negotiations. They fuel your behaviors, energize you, and allow you to strengthen — or distance and damage — relationships with the people you’re negotiating with. But too often, people refuse to acknowledge their full range of feelings because they’re afraid of losing the ability to think rationally and act strategically.”
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. The truth is that we don’t have to let the tension, conflicts, and misunderstandings get us down. We can do something about them.
DAN MCGINN: That’s where Dear HBR: comes in. We take your questions about workplace dilemmas, and with the help of experts and insights from academic research, we help you move forward. Today we’re answering your questions about pay injustices. And here to help us is Shirli Kopelman. She’s a professor at the University of Michigan’s Ross School of Business. She also wrote the book, Negotiating Genuinely, Being Yourself in Business. Shirli, thanks so much for being on the show.
KOPELMAN: Oh, I’m delighted to join you today.
ALISON BEARD: We were surprised by the number of questions we got about pay inequality. As a negotiation expert, do you find that people focus on what their peers are making, but then when they find out, not being happy about it?
DAN MCGINN: Is that just inevitable, even if it does them more harm than good sometimes?
KOPELMAN: I think it’s part of human nature. [LAUGHTER] When we find out, it’s very hard not to have comparisons. But we don’t have to fall into that trap. Right? Of course, you could take it the other way, if someone’s making more, what are they doing? And how is that an opportunity for me? But I think the natural reaction people have is to think something’s unfair.
DAN MCGINN: Here we go. Dear HBR: I’m a marketing manager at a multinational company. About a year ago, a new woman, a very beautiful one, was hired into my team. Her position was hirer than mine. She was not a good performer. She pretty much messed up all her tasks to the point our boss was about to fire her. But then a superior took her over to his department and gave her a much easier role and clearly better compensation. I honestly feel crappy about this situation. I climbed the ladder from the very bottom to get where I am today, and here she comes in, does a bad job, and ends up in an even better situation. I really wasn’t thinking about complaining to anybody about it. I don’t want to sound like I’m unprofessional and powerless. But it’s really getting under my skin. I feel that this is so unfair that I should raise my concerns. Is that a good idea?
KOPELMAN: Hm, yeah, it’s just, wow. Right? It’s so easy also to resonate with this broad situation of a less competent person is doing better because they are, fill in the blank. Right? This person shares a group affiliation with the boss, or they play basketball together. Right? It’s anything that makes the person feel like it wasn’t competence, but some unfair affiliation or attribute that’s in place.
ALISON BEARD: So I had two initial reactions to this. One was that this does happen. It’s Scott Adams, who is the creator of Dilbert, I think that was his Dilbert Principle. You know, incompetent people get promoted to managerial positions because that’s where they can do the least amount of damage. And the competent people they want to continue to work efficiently and effectively.
DAN MCGINN: The workhorses.
ALISON BEARD: Exactly.
KOPELMAN: Ironic.
ALISON BEARD: So it happens all over the place. The second thought that I went to was envy. We published a great piece by Leigh Thompson at Kellogg and Tanya Menon at the Fisher School at Ohio State University. You can’t help yourself feeling jealous when colleagues, particularly ones that you don’t view as competent, get ahead in an organization. It’s a natural human emotion. But the problem is, what you need to realize is, those emotions that you’re having actually can debilitate your own performance. So the more you focus on them, the less you focus on your own success.
KOPELMAN: Yeah, and the thing that usually people will tell other people is just, well you shouldn’t be emotional. Make it go away. Be rational. Put aside that emotion. And I think what can be more helpful, because that advice is so hard to follow, right?
ALISON BEARD: Absolutely.
KOPELMAN: You really do feel, and emotions like jealousy and envy are kind of sharp. You can hear in the stories, the interpretation is about this horrible injustice taking place, or this feeling that this person has is maybe you can replace that emotion with a different emotion, instead of just trying to neutralize it.
ALISON BEARD: Hm, so what kind of emotion?
KOPELMAN: So first of all, you have to realize that perceptions can be deceiving. Is this person really incompetent? Right? Or could it be that there’s something I don’t know about. Right?
ALISON BEARD: Perhaps she is just better at managing up. Maybe she’s also really good at delegating and getting other people to do her work. So she might have skills that he isn’t displaying that have caused her to get ahead.
KOPELMAN: Maybe the first job that she was played in actually didn’t match her strengths, and being promoted to this other position has nothing to do with her personal attributes, but with a better matching for the company. So kudos for this company for adjusting and matching. Right? There’s so many alternatives. If she truly is incompetent, then she may feel horrible. Right? And feel guilty. You never know. Right? And so now you have choices, and now you might actually feel empathy and compassion instead of envy and jealousy. And so if you can flexibly reinterpret situations, you gain degrees of freedom, because you can trigger an entirely different set of emotions and then think about what would be most constructive? What am I trying to achieve? What is this about? Is this really just about me and the fact that I feel I’ve been ignored, and I’ve been step by step doing everything I need to do, and I’ve been overlooked. Is it really not about that other person? So what is it about? And then what am I’m trying to achieve?
ALISON BEARD: And that’s what Leigh and Tanya talked about in this envy at work article. Your comparison in your career should actually be to yourself.
DAN MCGINN: I’ve certainly worked in places where I’ve had conversations with colleagues where somebody else will get promoted, and they’ll want to gossip about it, and what I often try to remind myself and remind colleagues who talk about this, is that we’re all in kind of one-man races here, one-person races. And we’re not directly competing against each other, even though it sometimes feels like that’s true.
KOPELMAN: I think the answer is, he absolutely should not go complain about this woman’s advancement. All of the advice across the board from a variety of experts are, don’t be confrontational, don’t complain, don’t mention others by name, don’t give ultimatums. But if he does, after all that reflection, think to himself that he needs a promotion, needs higher pay, all of that, he could go into a conversation with his boss that’s very focused on himself, not on this other person and sort of any sense of injustice.
DAN MCGINN: I agree with that. What is his goal here? He’s clearly not going to get this woman unpromoted. One of the first questions that came up in my mind when I read the letter was, has he ever expressed interest in transferring to a different department? Put her out of the equation and be clear about what it is he wants and what the path is to get there. But let’s recognize, that’s like, eat right and exercise. It’s great advice, but no one follows it.
KOPELMAN: Well, it’s hard to follow. Right? And I love Leigh’s work. And we’ve worked together. And this advice makes a lot of sense. It’s just really tough to move from an emotional story to this, OK, now I need to do A, B, C and be confident about it. So what I think and tell people, and it’s very counterintuitive, is to replace that emotion with a different emotion. Right? And to somehow find a way to be excited. And to show how much you can about the company and have that fuel what you’re trying to do. So maybe even that idea of talking to that person, to this woman, and expressing your compassion and empathy and hearing them out, it’s part of a move that’s going to help you work through the emotions, have a different set of emotions in place.
ALISON BEARD: So I probably would never do that. So if you were going to go talk to this woman, well, first of all, why would you do it? And second of all, how would you go about it?
KOPELMAN: All right, so why would you do it? Because you’re curious, because you see it as a way to work through something that you now understand is your perspective and might not be the only perspective possible. And you work with this person. Why not just ask them, hey, do you have time for a cup of coffee? How’s it going where you are now? I’m sorry things didn’t work out.
ALISON BEARD: Isn’t that disingenuous, though?
KOPELMAN: Well, the question is, do you genuinely care? I would never do it if I didn’t genuinely care. Right? It’s not a strategic move. But why wouldn’t you care? I mean, you spent a whole lot of time with this person. They had a difficult time because they weren’t doing well, in your perception. Right? If you can find it in you to care, then it is genuine. And it doesn’t have to be a long conversation. Right? It doesn’t’ really matter. It’s the fact that you start talking to this person that will end up shedding a different light and a different angle on what was a perception in which you may have been stuck.
ALISON BEARD: And turn them into a human instead of sort of this evil villain.
KOPELMAN: Yeah. I mean, even if the fact that just think about, wait, this is a person who may have suffered.
ALISON BEARD: It doesn’t sound like she’s suffering, but —
KOPELMAN: Well, we don’t know. This is all from this one person’s perspective. There isn’t a right answer. It’s the fact that you can think about it from that perspective that takes you out of where you’re stuck. And I think that’s really important when you’re stuck in that place of envy and jealousy. Once you get unstuck, then you have possibilities.
DAN MCGINN: I feel like we’re putting a lot of onus on the person who wrote the letter here, and I think that’s appropriate. I also wonder, though, whether in general, bosses could be more proactive in anticipating the envy and jealousy reaction around these promotion decisions and announcements, and maybe handle them a little bit better in the sense that, if you’re a boss, and you’re about to give somebody a move to a better department that a lot of people are going to be jealous of, wouldn’t it be better to pull those people aside and communicate the decision and give them a little forewarning instead of just letting word trickle out, or instead of just sending out that standard memo.
KOPELMAN: I agree. It’s important to be proactive. It’s important to understand the emotional ripple effects that happen. And then take a leadership move that takes that into account, and narrate it for people. Because if it is a story of better matching, then that’s a great positive culture story. If it is a story about supporting the person who’s not promoted, have the conversation with them about their career, track and give them hope in a different way, but anticipate that people will make up a story to fit what they see, and that might not be the best story for the company or for your perspective as their manager.
DAN MCGINN: Yeah, the line in the letter that jumps at me is, I climbed the ladder from the very bottom to get where I am today.
ALISON BEARD: Absolutely, and you know, the workhorses don’t always get recognized and rewarded. He needs to be aware of that, and perhaps be a little bit better at that office politics piece of it, and at managing up.
KOPELMAN: You can’t sit in the dark and expect the light to just come in. You have to shine the light or have someone help you shine the light. And so, if you’re the hard worker who’s advancing one step at a time, make sure people are aware of that.
ALISON BEARD: So what are telling this letter writer?
DAN MCGINN: We’re telling him to recognize that it’s normal to feel jealous and envy when a colleague, especially a colleague you don’t perceive as being highly competent, is getting ahead of you. But at the same time, not to be super reactive to that. It would be a great idea to have a conversation with your boss about your own career, your own goals, where your ambitions lie within the organization. But you don’t want to focus on the fact that this other person is pulling out ahead of you. That’s probably not going to turn it into a productive direction.
KOPELMAN: And to do that, I think it’s important not to be led by your initial emotion, which is legitimate, which makes sense for the way you perceive the world. But it is a perception. And once you see that different perceptions, and flexible interpretations are possible, find the emotion that’s going to work for you and will be constructive, and then lead with that emotion, instead of just trying to cut all emotions out. Make your emotions work for you.
ALISON BEARD: Terrific.
DAN MCGINN: Good.
ALISON BEARD: All right, well, let’s turn to our next question. Dear HBR: I’m a manager in a midsized firm. One of our policies is to recruit a pool of new employees who are fresh out of college and train them. They’re spread across different business units and placed under different managers. We do this every year. The first year of them on the job usually runs pretty smoothly. But after that, when the pay hikes kick in, it gets really tricky to reward each person based on their performance. If we differentiate by salaries, then the ones who don’t get a big bump in pay feel that their efforts have not been recognized. They usually blame their managers for this. On the other hand, if we don’t give some people more money, then the truly high performers feel that their efforts have not been recognized. And surprise, surprise, they also blame their managers. This trend continues year after year. In most cases, half these people leave after just a couple of years. And all that work that we put into training and grooming them goes down the drain. In their exit interviews, pay injustice is one of the biggest complaints. What can we do to fix this?
KOPELMAN: What’s fascinating to me here is that it’s also much more of a system kind of problem. Right? It’s not about, I don’t know how to navigate the situation, personally. It’s, I have this system, and it doesn’t seem to work. And what appears rational doesn’t always work. So they’re nicely identifying this double-edged sword. Right? Either those who have not been recognized feel like something was unfair, or if you don’t recognize certain people, they feel that their hard work is not earning its pay, literally. And so they’re kind of stuck.
DAN MCGINN: Yeah, it seems like the simple question here is, should we pay our stars more, or should we default towards paying everyone the same? And what are the pros and cons of each of them?
ALISON BEARD: My immediate reaction was, of course you reward your high performers. And you don’t worry so much about paying your underperformers. And I don’t actually think that it’s unfair, if in this case there are people meeting metrics and getting paid more, and people not meeting metrics and not getting paid. I think that’s fine.
KOPELMAN: I agree with you, Alison, but I think there’s a question here about, first of all, how transparent and how thorough have their built in the system? So are people being evaluated in both subjective and objective ways? Can the system be improved? Because in the end of the day, a pay for performance system works well, if it really is working. And then the question is, how many people are they losing? And are they losing people because of perceptions of injustice about the process?
ALISON BEARD: We’ve actually published some really interesting research about this from a company called Pay Scale. And one of their studies showed that two-thirds of people who are paid the market rate for their role think that they’re underpaid. And they do argue that clear communication is the answer. And the idea is that as long as people know why some people are getting paid more than others, then even the people who are relatively underpaid will be more engaged and happier about their jobs, because they understand why it’s all happening.
DAN MCGINN: There’s a difference between pay for performance and merit pay. Pay for performance assumes that there’s some sort of objective, quantifiable metric. So you’re a salesperson. You’re being paid a sales commission. The other system is a merit raise, and those tend to be perceived as more, well, my boss went into the meeting, and did a really good job of fighting for me, so I got an 8% raise, and that person only got a 3% raise. So a lot of it does come down to whether it’s based on something that’s numeric, that can be justified, or whether it feels like a political or arbitrary system.
ALISON BEARD: Yeah, and I think it’s really hard in this case, because he’s talking about these people are in all different units. At the same time, I think even if they said, it’s based on your 360-degree reviews, or it’s based on your boss’s evaluation, at least giving a little bit of transparency into what’s going into these decisions, I think would go a long way.
KOPELMAN: There’s a sad story the way the question is asked. Right? This person feels stuck as a manager. And so, I’m just wondering if there is some way to differentiate the clean people, but not necessarily immediately as they’re recruited. So maybe it’s not about pay increases the first year, but get people to become more committed to the company and kick these programs in, maybe after two or three years. So at least in the first few years, as new leadership and emerging leaders in the company, the focus can be on the team, and all of us doing well. And then when you’re ready to be promoted, well, that promotion will come with an increase in compensation. You might be able to take care of the problem of attrition and the cost of training and not lose people so quickly.
ALISON BEARD: It also seems odd that pay is such a focus for this pool of young recruits. You wonder whether the company could do something totally unrelated to financial compensation, whether it’s leadership development, or just sort of general perks, you know, a great office environment, free lunch, whatever it is.
KOPELMAN: Yeah, maybe there is this narrow kind of framework that they’re stuck in, and that’s the frustration of this manager, that the only way that people feel recognized is whether they were the ones to be promoted in this way. And if they do more promoting of recognition, and these kinds of benefits, people won’t be as unhappy or won’t be as likely to leave.
DAN MCGINN: I also think, if a company can create the image that it’s a great place to work — flexibility, culture, benefits, mission — that it takes that spotlight off the pay package a little bit, and it makes people maybe more inclined to accept a collectivist, less differentiated pay system.
KOPELMAN: And the culture could be about compete together. Right? We want you all in the first few years, some people may be faster, so we don’t feel that it’s fair within a year to turn some into stars. But over time, there will be stars. So for now, it is part of our culture to take all the funds that we have available, and equally distribute them to the whole team, because we want you to be a team. And so, people don’t feel like the company is taking advantage of everyone. They really aren’t just doing lip service. They’re trying to build the culture. And then when it makes sense, they come in with the differentiation.
DAN MCGINN: One of the ways that companies try to deal with this, is they try to create a culture of secrecy around what people are paid. They want to hope that the three of us won’t compare our raises.
ALISON BEARD: Dan, you and I have never compared our raises or our salaries. [LAUGHTER]
DAN MCGINN: We just don’t think it’s going to be a good idea to do that.
ALISON BEARD: I know, it’s true. We did make this pact, truly. At one point, when we first started working together, because we started around the same time, we initially had this dancing conversation about whether we should talk about each other’s salaries. And we decided not to. To this day, after seven years of working together, side by side, doing very similar jobs, we have no idea what each other makes.
KOPELMAN: That’s fascinating. But see, that gives power to the company.
ALISON BEARD: It does. We’re doing the wrong thing.
KOPELMAN: Well, maybe you’re doing the right thing, because you’re prioritizing your relationship. [LAUGHTER] It’s often uncomfortable for people to talk to their friends, but sharing that information is helpful to one another. So you know what you can ask for. You can actually negotiate better when you know what other people have justified or what’s appropriate. So this secrecy thing about the stars secretly getting more only works because people don’t talk.
ALISON BEARD: It’s weird at this company, because it doesn’t seem like it is a secret. It seems like everyone is sharing this information, and people know that their peers who started at the same time, even if they’re in a different unit, are making more money than they are after the second year.
KOPELMAN: Yeah, see, I feel like there’s a simple solution here of, they’re new recruits. You don’t have to turn them into stars after one year. How would you really know after one year that someone’s a star.
DAN MCGINN: Yeah, I think in some firms, it’s intentional, because over time, they want to keep the stars, and they really want everybody else to leave. I mean, you think about a law firm that has a partnership track to it. That’s designed to create attrition. Consulting firms are often the same way. They’re not looking to keep the low performers on for years and years. So it seems like they’re economic model’s a little bit different here, because he is worried about the people who get the 3% raises leaving, and that’s not true everywhere.
KOPELMAN: It sounds like this person really cares. Recognize that in yourself. And get excited about it. So you’re noticing something that you’re describing as a double-edged sword. It sounds frustrating. It seems sad. That’s important information. But instead of just being bummed about it, instead of just thinking, OK, it’s a dead end. There’s nothing to do, notice how this could be an opportunity and get excited about this opportunity and what you can do to change things. And start those conversations. This person’s frustration could actually be a good thing, because maybe that’s going to position this person to lead this change.
ALISON BEARD: This letter writer sounds like a middle manager. If our advice to him is that he needs to change the way these new recruits are compensated, how can he be a change leader?
KOPELMAN: So anyone can be a change leader. I mean, that’s what’s beautiful about corporate culture today, and I assume it’s this way in the situation. You’re close to this data. Other people probably don’t see this. Other people may not be aware of the cost. And if you can put metrics to the cost, and put together a proposal and start having conversations about what you’re seeing, build a small coalition of people who will see it in the same way, and bring it up to the appropriate channel, and I’m not sure who that is, depending on the structure of the company, this could be an opportunity to shine and stand out for someone who really was able to not just see something, but address it and bring on some transformational change, because most people would just ask the normative questions. Is there something to adjust in the system? Not as many people would actually be bold enough to say, we need to change what we’re doing. Our new recruits are leaving. We’re investing this much money in them, and our attrition rate is X, and even though it’s rational to have stars, maybe we can redesign the star system and improve our culture.
DAN MCGINN: That makes a lot of sense. And I bet that at a lot of companies, they’re looking at it almost the opposite way. We’re spending a lot of money to train these people. A lot of them are leaving. So let’s spend less money to train them. You know, people move around too much these days. We can’t afford to invest as much in training as we used to.
KOPELMAN: Yeah, and that answer hurts. Right? You feel like, ouch. But it also could be that to recruit people, you put a lot of effort in, and then the system, systems just aren’t good at thinking about the next step, and the unintended consequences. And I think in that sense, they rely on people to be bold, the people who see this, to bring this back up and say, you know, we are investing all that money. So if we are investing all this money, let’s do this.
ALISON BEARD: So it sounds like we’re telling our letter writer that he should consider becoming a change leader in his organization. The current compensation structure for new recruits seems to be broken. He might want to consider a holistic revamp and pitch it to upper management in a way that would improve his attrition rates, ensure that high performers were still retained, and prove himself to be a real asset to the company.
KOPELMAN: Absolutely.
ALISON BEARD: Go for it.
DAN MCGINN: Dear HBR: I work for a big clothing retailer on a data science team of four people, including myself. My boss recently left for another company. We were the only people in our entire division with expertise in a certain kind of computer programming. He was a senior analyst. I’m still an associate analyst, two levels below. Now that he’s left, I’ve become the point person for all things programming. I was told I would be backfilling his role. I was glad to accept the challenge, and I was told HR knew they needed to adjust the pay scale for data science or else we’d continue to be a factory for data scientists to put in two years to get experience, then go get a gigantic officer to work somewhere else. Here’s the problem. I’m doing the work of a senior analyst, and I’m not being rewarded and regarded like one. How can I ask for the increased compensation I was promised?
KOPELMAN: You know, it’s interesting to hear this question, because it sounds so familiar. And my answer is going to start with being really simple. Initiate a conversation.
ALISON BEARD: So who should he initiate that conversation with?
KOPELMAN: Well, the story doesn’t make it clear. It sounds like he’s waiting to have someone follow through, and it’s not clear who that person is. So whether it’s his current director, or whether it is HR, the question would be, why not start and figure out who is the appropriate person to talk to? And then have the conversation as appropriate. Right? But sitting and waiting for someone to follow up on someone’s going to take care of me, is definitely not going to be helpful.
ALISON BEARD: Yeah, absolutely. Assuming that he does find the right person, he’s, you know, it’s either, his boss has left, so it’s his boss’s boss, or it’s directly with the HR department. What should he say in that conversation?
KOPELMAN: The story is pretty straightforward. Right? The resource that this person is now providing is unique. The work that is being performed is the work that was previously performed by a senior analyst. And so to put it in a data science language, the algorithm is simple. What is it going to take to align and adjust what I’m doing now to what seems to be appropriate? And so, just ask that question. There’s probably some emotions that are holding this person back.
DAN MCGINN: So data science has apparently, for the last three years, been the hottest job in America. Some of the biggest pay raises, the largest median salary, lots and lots of job openings. When he has this conversation, how much should he bring that sort of external evidence and data into it to make sure that the HR department understands that he’s a really hot commodity right now?
KOPELMAN: You know, the question is always, to what degree to mention alternatives, because they do come across as a threat. I think we go into our head thinking that there’s a lot more going on from the other side that’s preventing something from happening. It could just really be that the system is busy. Right? And a data scientist should be able to recognize that. And so once you reach the right person, and you communicate your passion, you describe the situation that you’re now doing this work, you could start by just asking, when is an adjustment happening? What has to happen? What can I do to help to make this adjustment? And signal something that would be constructive and be helpful, and that way not just to yourself, but to the department, maybe emphasize that it’s really important for us to have a strong team in place, because this is the work we’re currently doing. So I would focus internally on the value to the company before I would go into outside opportunities and the hot market that exists outside. They’re probably aware of it.
ALISON BEARD: And he should go in to make his personal case first, before sort of making this broader case about the team and the fact that the compensation structure isn’t going to allow them to keep talented people for a long time?
KOPELMAN: Absolutely, because otherwise you’re going in, and you’re complaining. Right?
DAN MCGINN: In this situation, where somebody’s essentially being promoted internally, don’t the pay raises tend to be on the smaller side, and certainly it’s in the company’s interest to keep them as small as they can. Is there anything he needs to do to try to increase his leverage and to prevent just sort of an incremental default kind of raise?
KOPELMAN: That could be true, and it doesn’t have to be true. So the question is, do they even have set pay grades for the different titles. So this could be such an easy conversation because if he is two levels below what the person before was, and he’s doing that work, it would be an easy gap to bridge. And then at that point, you want to ask yourself, well, is there an opportunity to have a compensation above and beyond that? The company should be adjusted to market rates, and that would be data that’s pretty easy to bring in to the conversation, so let’s look at what the senior analyst is being offered and make sure that we’re offering senior analysts a competitive offer in the current marketplace, and you go, and you get the objective data for that, that should be pretty easy to attain.
ALISON BEARD: This guy is a hot commodity. He should also explore his worth. Maybe interview for a few jobs, and see the type of compensation he could be offered elsewhere, and not necessarily go in with a threat, but it would give him more confidence. You know, you mentioned that emotions might be holding him back, and maybe it’s a lack of self-confidence about his true market value? And I think that just going out and even having a few exploratory conversations with other companies or people who work at other companies, could help him in that sense.
KOPELMAN: So definitely having an outside option provides a lot of power from a negotiation perspective. Where I think there’s something that he could consider before, is he really interested in going somewhere else? Because that’s a lot of work. And if it’s a confidence issue, maybe there’s something else that can be done before you put in that effort, unless that really is something that’s more global about your current job that you aren’t happy. But it could just be a lot more simple. It could just be, things just happen. Someone left. You have an opportunity now for an easy promotion in your company, and you’re just sitting there and waiting. And waiting and waiting for the system. Right? And if you wait too long, they might actually hire an external person, some hotshot will show up and be hired into that position. And before that happens, there’s other ways to gain confidence. So one thing that he could do is, redirect the focus of the frustration. I might be frustrated with myself if I focused on just sitting there and waiting, and if you start thinking about that, maybe that’s enough to boost you to think, well, there isn’t really that big of a hurdle to have a simple conversation about simple facts. And so, yes, outside options are really helpful, but that’s a big door and a big path to take, and it’s going to take a lot of energy and time. So in any case, you would want to know what your internal option is.
DAN MCGINN: Now, we published articles by Patty McCord, who was the HR director at Netflix for many years, and she argues that people should be interviewing for other jobs all the time, that that’s a great standard practice, that there’s really no other way to have a really good sense of your market value. I’ve always reacted the same way you do to this, that man, that sounds like a lot of work to go out and interview for a job I really don’t want, just to figure out what the market is like. Do people over rely on that as a tactic to figure out their market value? And is there a better way to do it?
KOPELMAN: I think they do, and I think it’s not very efficient. It’s definitely a strategy that has worked, and works, and makes sense, from a strategic perspective. But if that’s not your goal, or if that, to you, is exhausting and how you enjoy living your life, if you would prefer to be among the people you like, in a company that you love, then maybe they’re over relying on people expecting that to be the way to do things, or being taught that that’s the way to do things, is having an alternative.
ALISON BEARD: In this case, I don’t get the sense that our letter writer does love his company, and I think he really actually worried about how his company’s being run in terms of their management of the data science team. I, reading this letter, would argue that he should go out and see what other opportunities he can get at companies that have not just better compensation, but sort of a better attitude about what they want from their computer programmers, and how much they value them.
KOPELMAN: I mean, you want to be respected. You want the work that you do to be recognized. You want to work in a culture that treats you well. I would just say, make sure that it really is the situation you’re in, and even if that is the case, then you definitely want to know what they best option you have within your company. So if that’s your mindset, you still have to have that initial conversation within your company to see what the default is of staying, because you definitely aren’t interested in staying in the role he’s in right now.
ALISON BEARD: Yeah, and my worry is that he is going to get his promotion. He is going to get his raise. And then he’s going to inherit a team of totally disengaged, underpaid employees who are going to leave in two years. So I don’t think that’s going to make his life all that easy.
KOPELMAN: No.
ALISON BEARD: So I do think that sort of once he advocates for himself, he’s going to need to then advocate for his team.
KOPELMAN: Absolutely.
DAN MCGINN: One of the things that struck me with this question is that there was a promise made, and not a super specific promise, with no real timeframe tied to it. It seems like when a worker goes to a manager with an issue about compensation, one of the default response is to make some sort of a vague, you know, we’re going to look at that really seriously in the next few months, Alison, and I think we’re going to have some really good news for you. It doesn’t really mean anything. There’s no teeth to it. Alison, in that situation, would be left wondering what she should do, when she should do it. Do people sometimes lean too heavily on these vague promises?
KOPELMAN: I think they do, and I think the people making them might actually mean it at that moment, and then they get busy, and they forget. And that’s why it’s your responsibility to bring it back up. Right? When is it going to happen? What’s going to happen? Let’s talk about that. So initially, yes.
ALISON BEARD: That’s crazy to me. If I were a manager, and I had promised someone that they would either get a promotion or a raise, because they were backfilling a role, I would feel intensely guilty until I made that happen, and the paperwork was signed. So it’s surprising to me that this might be a common problem, that people just forget that they’ve promised promotions and raises.
DAN MCGINN: I think it happens all the time.
KOPELMAN: Yeah, and I don’t know if they explicitly, right, what they say is heard as a promise by the other person, they may not have even offered a promotion or promised a promotion. But the person hears the opportunity, because there was an explanation about the company definitely can’t have everybody jump out to other opportunities within two years. So they’re connecting the dots in a way that builds some expectation. I think there may be some miscommunications around that.
ALISON BEARD: But your assumption is not that that company is trying to take advantage.
KOPELMAN: Well, I would want to prove that assumption true. My initial assumption would be that it’s a much simpler, let’s see if we can just solve this problem. I think people jump into worst case scenarios before they address a more simple, straightforward, could this just easily be fixed.
ALISON BEARD: So what are we telling this letter writer?
DAN MCGINN: I see a pretty happy ending here, if he follows our advice and tries to just initiate a conversation and not hold a gun to anybody’s head. If we check back with him in six months, I’m betting he will have gotten the promotion. He’ll have gotten the pay raise. I wouldn’t be surprised if he has successfully advocated for them to rejigger the compensation for the whole data science team in recognition that these people are in high demand. And if that doesn’t work out, he’s still going to go out and get a great job, because he’s in demand.
KOPELMAN: Yeah, absolutely. It’s a great position to be in.
ALISON BEARD: Shirli, this has been terrific. Thank you so much for helping us work through these pay injustice dilemmas.
KOPELMAN: It’s been a real pleasure to have a conversation. Thank you, Alison, and thank you, Dan.
DAN MCGINN: That’s Shirli Kopelman. She’s a management professor at the University of Michigan’s Ross School of Business. Thanks to the listeners who wrote us with their questions.
ALISON BEARD: On our next episode, we’re going to be talking about career transitions. So if you want us to answer your question on that topic, or any other, just send us an email. We’re at dearhbr@hbr.org.
DAN MCGINN: To get that episode automatically, go to your favorite podcast app or wherever you’re listening to this right now, and hit subscribe.
ALISON BEARD: And if you like the show, please give us a five-star review.
DAN MCGINN: I’m Dan McGinn.
ALISON BEARD: And I’m Alison Beard. Thanks for listening to Dear HBR.