Salary Spin

Steven Alligood steve at
Thu Aug 16 15:40:42 MDT 2007

Nicholas Leippe wrote:
> On Thursday 16 August 2007, Hill, Greg wrote:
>> I guess the idea is that once you're at the ceiling, you'll keep getting
>> the same salary for a long time and feel stagnant.  I'd rather be
>> stagnant at a good salary than continually getting raises to be almost
>> where I should be.  Plus, if you're underpaid, there's a better chance
>> that a competitor will whisk you away because they can afford to give
>> you a big raise.  In that regard, I would think that it benefits both
>> the employee and employer to pay people what they're worth.
> Not to mention that working where you know you're underpaid can be very 
> demotivating--thus hurting productivity and moral, which can be contagious.
> Happy/satisfied employees work better.

People that don't get raises leave companies.  It is a morale issue.

If you are at 95% penetration in your pay range, and you get a 1% raise 
because of it, and your coworker (same position) is at 60% in the same 
range and gets a 5% raise, mathematically you are still doing better 
than he is (long term, more money in each check, etc).


You don't know what he makes.  Now he starts blabing that he got a raise 
of such-and-such, and you got half that, and you know you are three 
times the employee that he is.  You now feel under appreciated, 
undervalued, and annoyed.  You start looking.

HR departments love to have all these ranges and theories and equations, 
etc, to attempt to pidgin hole employees.  I had one HR director that 
got promoted to a VP because she saved the company millions of dollars 
by making the cap on raises from 6% to 4%, and introducing stricter 
guidelines as to who qualifies (and no, Ghandi would not have gotten the 
4% raise that year because he wasn't enough of a team player).

Basically, it is all a load of crap.  Get the most money you can get 
now, and just know that when the raises come, you are already making 
more than the shmuck that did the 30% penetration.  Be happy with your 
job at whatever they pay you, or find another one.  Changing jobs is the 
only proven method of jumping to the next level.

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