For workers who earn a lot, the salary they receive isn’t as important as other factors in their work environments. Even workers who earn the minimum wage will sacrifice higher payments if other factors in the work environment make them feel safe.
For instance, most people are likely to forgo better salaries if it means they’ll be working in unsafe conditions, facing discrimination, harassment, or overbearing managers.
Numerous studies into the topic have confirmed that salary ranks third or fourth in the list of motivations for employees. The leading motivators at work tend to be
- The nature of the work.
- The recognition the employee receives for doing a good job.
- Their degree of participation in the company’s decision-making procedures.
However, all employees want to be compensated equitably in a timely manner.
In most cases, employers aren’t trying to pay their workers the least amount possible. Only imprudent bosses engage in such destructive behavior.
Most employers want good value in return for fair salaries. Smart employers pay their important employees whatever is necessary which in most cases means the market value of the employee.
However, major problems arise when employees feel that their bosses don’t know their value and the importance of better compensation.
“Why should I give you a raise?”
That’s the question I was asked when I decided it’s time to discuss a raise with my ex-boss. Unfortunately, I couldn’t answer that question in detail a few years ago. Some of my co-employees had answered it right and walked away with a raise in a couple of months. I answered it wrong and showed myself the door in a couple of months.
What I found out later was that irrespective of the outcome, the answer to the question, “Why should I give you a raise?” affected me and my co-worker’s future relationships with our employers.
Answering that Powerful Question
The fatal mistake that I made while answering the question, “Why should I give you a raise?” was communicating my financial needs to my employers. I was fresh out of college and just started investing. In short, I needed more cash to invest better and get out of that job.
Of course, I didn’t say that bluntly to my employers so I made up some horrible lies.
Rather than stressing on what value I was providing to my employers, the reasons I shared were self-centered, not employer-centered. Soon enough, I could feel my employers viewing me as needy and greedy, not present or future-oriented.
My employer was not interested in my financial needs, no matter how dire I made them sound. In a way, I attempted to burden my employer with my problems and indirectly appeared as a financially irresponsible person.
My engagement levels at work took a toll soon after that brief discussion. I thought my bosses should feel obligated to give me a raise only because I had increased my standard of living over the period of the six months that I had worked there by taking on new expenses.
At the risk of sounding selfish, I’ll say that I was glad to discover that the feeling of being underpaid was something I shared with millions of people.
You Are Not Alone – Many People Feel Underpaid
The lack of open and honest discussion regarding salaries is a widespread problem across the country.
This widespread feeling of injustice is brewing in several companies and that’s why many employees from various fields are now ranking compensation as equally important as career advancement opportunities, feeling valued, and future enthusiasm for the companies they work for.
- Fishbowl surveyed over 4,700 employees from various industries and revealed that 60% of professionals think they are underpaid and that their salaries don’t match their qualifications or their levels of experience. In that study, accountants of the country fared the worst with 62% of them saying they feel underpaid.
- Microsoft, the company that spends billions on acquisitions every year, isn’t exempt from this problem as well. In 2018, 38% percent of the company’s employees felt that they weren’t being rewarded as well as their job performances.
Do You Deserve More?
What is your salary problem with your employer? Are you aware of how salaries are handled in your company? Are salary raises usually determined by management and then broadcasted to workers by their superiors or do workers have some contribution into the payment process?
For instance, annual performance reviews or seasonal salary appraisals are good tools for employees to discover why they feel underpaid in the first place.
Unfortunately, most employees have no clue whether they’re paid equitably.
According to a PayScale study about the link between salaries and employee engagement, one of the key determinants of employee satisfaction or dissatisfaction was their employers’ ability to clearly talk about compensation.
Of the 71,000 employees that were surveyed, almost all of them stated that having a clear idea about their salary structures played a major difference between “intending to leave” and “satisfied at my job.”
So, if you’re feeling underpaid, the root issue might be communication.
If you’re a recognized performer who frequently takes on new responsibilities, you must ask yourself if you’re effective at influencing your bosses to take actions that play to your advantage. Bear in mind – getting a fair salary won’t make you feel extra satisfied at work. But, getting unfairly recompensed will make you feel disengaged.
An Issue for the Managers
According to Gallup, there are already 22 million disengaged employees in the United States. This costs the country’s economy $350 billion dollars every year in loss of productivity. So, ensuring that employees receive fair salaries is also a concern for managers who want to create productive workforces.
In most employee complaints, the real issue wasn’t a lower number, they were deeper issues such as –
- Imprecise job descriptions
- Unsuitable job structuring (dysfunctional allocation of job responsibilities)
- Lack of a clear pay structure or concept which leads to miscalculations
- Poor job evaluation systems in the company
I’ve worked with both managers and employees who’ve dealt with these issues. Here are some positive outcomes I’ve witnessed –
Problem #1 – Lack of a Proper Payment Structure
One of my college friends started working with one of our professors at college. The professor had quit his job to start his own investment firm and hired my friend as soon as he left college.
Their work environment was quite unconventional and laidback. Instead of working with a team, he was working with friends. Instead of dealing with a CEO, my friend was dealing with a mentor.
But the company was small and my friend had to take on many responsibilities. From managing clients, to administering the company website, to managing events for the company – he constantly had to play three or four roles simultaneously. After a couple of years at the job, he was still making $30 an hour which neither covered his bills nor met his aspirations.
Financially, the company was close to breaking even when my friend decided he needed to move on from this job to get to the salary he deserved. But he was way too invested in the company to quit. Even worse – he didn’t want to hurt his long-time mentor who was emotionally dependent on him.
To get out of this pickle, my friend took these steps –
- Valuation –
Before starting to explore other options in the marketplace, my friend decided to evaluate his skills. He checked his value on LinkedIn, Glassdoor, Angel.co and Salary.com (One more way to find your worth is to keep floating your CV/Resume across the market to see what other companies have to offer – by that I mean keep applying for interesting jobs parallelly).
After learning his worth, he decided he shouldn’t complain about his salary but rather clarify his worth to the company. He also discovered that there were other investment firms in the market that were willing to pay more and offer better career advancement opportunities.
- Offer to Leave –
My friend assumed that raises or equity stakes were out of the question. So, very politely and sincerely, he offered his boss to find and train a replacement and leave the job for a higher paying job.
He stated that given that he was juggling multiple responsibilities at once, his value to the company was far more than what he was being paid.
- Finding Common Ground –
After the discussion, both parties agreed that they valued the business that they had both helped build way too much for mere arguments over compensation to disrupt their two-years long journey.
Instead of paying more, his boss stated that it’s better if my friend has equity in the business.
At the time, a 10% stake in the company meant nothing compared to my friend’s long-term salary demands. But now the company is doing very well. After that conversation, my friend became even more engaged in his company. He currently manages a twenty-person workforce.
Why this Solution Worked –
The root problem wasn’t that my friend was being underpaid. It was that he wasn’t sure about his role or contributions to the long-term future of the company.
His boss could’ve denied his proposal and my friend could’ve easily found a higher-paying job elsewhere. But this initial conversation allowed both of them to redefine the workforce for the better.
Problem #2 – Paid Less than Other Workers with Similar Job Titles
My friend Carl had started working as a graphic designer at an exciting management software company. After a year, he discovered on job searching websites that people with lesser qualifications than his were being offered better salaries.
While he was excited to keep working at his current job, he was also keen to be paid fairly for his contributions to the company.
The Solution :
Since the company didn’t have periodic performance assessment sessions, Carl decided to pen his manager a detailed email. In this email, he mentioned about his research into the average salaries that were being offered for his job title in his metro area.
He also mentioned his thirteen-month tenure at the firm and the experience he had gathered at the company. He mentioned that a salary increase of at least 20% was justified.
He mentioned that since he started working for the company, he had taken on several initiatives that added considerable value to the company. He listed his most impressive accomplishments, highlighting the most recent ones. His salary was increased in two months and he got a new job title as well.
Why This Solution Worked –
Throughout his pitch, Carl avoided using words that weakened his position. Instead of saying “I feel” he confidently stated his reasons for getting a raise.
Instead of reasons, he gave his manager evidence. Plus, he expected merely a response and careful consideration from his manager – he didn’t expect his salary to be increased straight away. He was asked some follow-up questions by his manager which he answered in that very email chain.
After some questions, the manager thanked him for the overview he provided about his contributions to the company.
The manager also stated that a raise of 20% wasn’t possible at that time but promised to make a case for it in the future. Carl, instead of taking his manager’s word, asked his manager to give him details about bringing up his case in the future. The manager clarified certain skills that Carl had to demonstrate for three months to earn more compensation.
In less than two months, the manager reported to Carl about his discussions with the CEO. Soon enough, Carl got his raise.
What if your boss shows more resistance than the bosses mentioned in these two cases?
Then, there’s nothing more you can do but look for greener pastures. However, the fact that you showed a willingness to confront your fears and ask for what you deserve will serve you in the long run.