Pay Discrepancies in Corporate America

[younginvestor2013]

Hi ER Community!

This topic has probably been beaten to the ground on many forums on the internet, but it is really beginning to bug me given my situation lately.

I work for a small (but growing) company with few "levels" or "titles" to the top. Some may view this as not ideal for career progression, but given my department within the company and our continued growth in closing new deals, it is a good spot for me to be in at my stage in the career.

However, I am starting to become really down based on the pay discrepancies I am learning about in my company. Some background: I have 5 years of progressive Finance and Accounting experience. I currently make $73k base, and just found out that our Admin makes $60k base. Additionally, a coworker who is two "titles" higher than me, makes $130k base. I have basically been told that I will be promoted this year by my bosses, which is great. However, I am starting to feel that, since I started at such a low base, I will never catch up to my coworker making the $130k that is only two "titles" higher than me. When I get promoted, at which point I will be one "title" lower than her, in theory, I would expect to be bumped up to about $100k base. That would be around a 40% raise, and you and I know that both won't happen.

From the outside looking in, it may appear that I have a lower skill level than those making more than me, but that is simply not the case. I have received excellent reviews since starting here and, I have consistently stepped up and done the same quality job as those above me when they are out on vacation or traveling, etc. Additionally, this coworker does not have decades of experience - they only have about 5 more years experience than me.

I am just confused, annoyed, and perplexed, amongst other emotions, as to how to handle this. Of course I want to be paid a fair salary compared to my coworker, but at the same time, I think it is unreasonable to ask for a 40% raise with my anticipated promotion.

All things considered, I am fairly content with my workload, my company, and my overall job, except that I feel I am being highly slighted on my compensation for the output that I provide. So, my goal is to try and get my base up to $90-95k, which still seems like a tough shot given that would be a 22% to 30% raise. I think that would be a competitive salary for my age and background.

Any thoughts or suggestions that the ER Community could provide would be helpful. I think I need to approach this professionally, but also need to play the game a little bit...and play hardball.

[travelover]

When I was first promoted into management (and could thus see pay scales for those below me) I was shocked to see that I was the lowest paid person in my group, including the people that worked for me.

Over time, I more than caught up and worked to even out the inequities among those I managed. I think it is important to discuss this with your direct manager and ask them to do the same for you. Give supporting documentation to them, as they have to fight for you. The raise pool is generally a zero sum split.

[Big_Hitter]

call a headhunter and see if you are underpaid - I know a few in Chicago not sure if they are in your lob or not

sometimes you need to change employers to get a pay raise

who knows you may get a 25% raise and a DB plan!

[younginvestor2013]

Quote:

Originally Posted by Big_Hitter call a headhunter and see if you are underpaid - I know a few in Chicago not sure if they are in your lob or not sometimes you need to change employers to get a pay raise who knows you may get a 25% raise

Agreed on changing jobs, but I guess my preference is to not change jobs. I like everything going for me, and there is plenty of room for growth at a quick pace. My dilemma is, even though I may get promoted a two or three times in a 5 year span, if I only get a 10-15% raise, I will never catch up to my coworker who started way higher.

I think my company knows this and I'm sure they want to pay me as little possible to keep me happy. Since I am a valued employee and get great feedback, I think I need to play hard ball a little bit if they aren't willing to come higher. Who knows, they may bump me up right to where I want to be after all. We have been very successful and the money is definitely there for them to do so. I have seen our recent financials.

[Options]

I get the following from your post:

1) You feel you are well placed that the current stage of your career;
2) You have been told you will be promoted this year;
3) This was told to you by someone you report to;
4) You have received excellent performance reviews since starting with the company;
5) Upon promotion, you will then be one title below an individual higher than you currently making $130K per year.

From my assessment, you are doing very well for yourself. Upon promotion, you will probably be moved into the lower (25th) percentile of the grade the position you are being promoted into is slotted. Whether that will amount to $100K annually depends on the compensation structure of your company, and what the bottom and top of the pay bands are for the grade you are being promoted into.

I normally don't do this, but I recommend not doing anything at this point and waiting until you are promoted (well, don't do anything except continue to garner the good favor of the people you report into and continue to receive excellent performance reviews). Yes, you may be underpaid now, but being considered for promotion, particularly in a company with few pay grades is most definitely a form of compensation. Don't underestimate this. Upon promotion, if you think at that time the salary offered you is unfair, counter with a request of 10-20% above the salary being offered. OTHOH, do not counter unless you can justify this increase with specific, concrete ways you have added value in the past to the company by making things/processes, etc. better, cheaper, newer, or faster. If at that time, your counter is refused, you can then make the decision to take your value to another organization that will be prepared to pay you for the value you feel you can add. It's a mistake to do this before the time is right or before you are ready.

Everyone takes their salary personally. The iron clad rule in the world of work is you have to put in before you get out. People who get their rewards before they're ready almost always crash and burn (sooner if not later). Be prepared to add and show value throughout your career in advance of earning it and you will never go wrong.

You appear to be on a very good career trajectory. I would personally be quite thankful for this. Good luck!

[Big_Hitter]

Quote:

Originally Posted by younginvestor2013 Agreed on changing jobs, but I guess my preference is to not change jobs. I like everything going for me, and there is plenty of room for growth at a quick pace. My dilemma is, even though I may get promoted a two or three times in a 5 year span, if I only get a 10-15% raise, I will never catch up to my coworker who started way higher. I think my company knows this and I'm sure they want to pay me as little possible to keep me happy. Since I am a valued employee and get great feedback, I think I need to play hard ball a little bit if they aren't willing to come higher. Who knows, they may bump me up right to where I want to be after all. We have been very successful and the money is definitely there for them to do so. I have seen our recent financials.

still, nothing wrong with checking the market, call a headhunter and go over your situation - heck, you may go to a few interviews and get an offer or two - then you have some real ammo

[Freedom56]

Do you have a degree in finance or accounting? Does the co-worker have a degree? That makes a lot of difference. I worked for four companies during the last 35 years before retiring last year. All four companies required degrees for professional management positions without exception. Not only did they require degrees but also relevant degrees for the position from good universities. I often saw our HR director frown on people with online degrees and would not even consider them. When I started my career in 1980, I saw many people who were always held back from promotions because of the lack of a degree. Higher education leads to better mobility.

[Big_Hitter]

out of curiosity, how do you know what your coworker makes?


discussing salaries is generally verboten in corporate 'murica

[ERD50]

Quote:

Originally Posted by Big_Hitter out of curiosity, how do you know what your coworker makes? discussing salaries is generally verboten in corporate 'murica

Also curious.

I find it interesting that they were only dissatisfied after learning what someone else makes. Reflection time?

As others have suggested, if you don't know what you are worth on the open market, you don't really have much leverage. And depending how you learned of the other salaries, they could say none of your business, or even that your information is wrong. And you did mention the other person is two levels above you (with very few levels). Do you know what the salary ranges are for each level?

At mega-corp, salary ranges were published for each job grade. So you knew where you were within the grade. If you were at the low end of the salary range and performing very well, a larger than average raise could be justified to bring you up in the scale. It might take a few years of continued good reviews to move very far though.

-ERD50

[Koolau]

Never allowed to see individual salaries at my Megacorp, but the "scales" were known and it was reasonably well known about where new employees started. Our MC had a tendency to hire new folks at significantly HIGHER salaries than those who had been there for 1 to 3 years. It was a simple calculation to MC. If those 1-3 year employees had not already distinguished themselves in some way, they had no leverage at MC OR elsewhere. They were either stuck at MC or would have to start at the bottom someplace else. Simple! If they HAD distinguished themselves, they were now above the new starting salaries. JUST THE POLICY OF MC. Live with it or leave unless you have the ability to negotiate - which MC did not offer us. YMMV.

[Just_Steve]

Also longevity plays a part in what some folks make, I had one manager below me in title that made a bit more than myself and other managers in the same title as me, they were old timers that were there for the boom years and got big raises. Such is life. Being a state employee our salaries were a matter of public record.

[bclover]

Quote:

Originally Posted by Big_Hitter out of curiosity, how do you know what your coworker makes? discussing salaries is generally verboten in corporate 'murica

which I always thought was laughable. My mega corporation always insisted that salaries not be discussed and every year when annual promotions and raises came out, employees knew full well who made what.

lol, we had a saying that by the time the finished with the last progress review the information was "leaked" and down the hall before the last person left the meeting.

I also agree with "About Steve". we had many "old timers" who were with the company during the very flush years before 9/11. they were recipients of 20 and 30% raises along with serious bonus much in part to very good years. someone who has been with my company say only 7 years has only seen raises of 4,5 maybe 6%

[W2R]

Quote:

Originally Posted by ERD50 Also curious. I find it interesting that they were only dissatisfied after learning what someone else makes. Reflection time?

+1

My kneejerk reaction to the original post, was that the problem was not so much low pay as possibly feeling "slighted" by the fact that this other person was making so much more. I could be wrong! But if this is the case, then I would suggest:

1) The OP should now take some lined paper and a pencil, and write "Life is not fair" on it 3000 times. Then put it in a drawer.

2) Repeat if/when feeling this way again.

[Big_Hitter]

OP, whatever you do, don't go to your supervisor and say "hey, I know soandso makes X so I think I should make Y" you may get shown the door

[MichaelB]

Quote:

Originally Posted by younginvestor2013 I am just confused, annoyed, and perplexed, amongst other emotions, as to how to handle this. Of course I want to be paid a fair salary compared to my coworker, but at the same time, I think it is unreasonable to ask for a 40% raise with my anticipated promotion.

Breathe deeply.

I still remember my first manager job - marketing planning. That included projecting the division salary plan for the following year. To help me do that one of the inputs was the current salary for each employee in the division, up to and including the CEO. It was rough. I saw how much every one of my peers were making, all the managers and execs, and felt terribly disadvantaged. Most of my peers were making more than me, and many (most?) also lied to each other about how much they made.

Being able to get past that was a critical step in my evolution and career. Comparing yourself with others won't necessarily lead to a positive outcome. What matters in not your judgement, but your employer's. Harsh, but true.

What I tell my children is the current job market rewards specific skill sets. If they want more income, they need to get the skills, then show they have them, then move to jobs (or employers) that use those skills.

I would suggest you not worry about your coworker, but instead focus on your skill set.

[Bamaman]

You're certainly not going to see any 40% raise with a promotion in most companies..

I know my old MegaCorp had a cap of 10% to 12% max. when someone went to one pay grade higher. No more.

[Big_Hitter]

First of all, a promotion is not a pay raise, it is an increase in responsibility


Second of all, sometimes you do get a pay raise when you get promoted, but not always

[ESRwannabe]

My observation is that the best way to make more money is to switch employers every 3 years. Unfortunately, I have stuck with the same employer for 15+ years. So I am probably one of the poorest people on this message board. Not that I'm complaining.

[dallas27]

You get what you fight for and win, not what you think you deserve


Sent from my iPhone using Early Retirement Forum

[youbet]

Quote:

Originally Posted by younginvestor2013 Any thoughts or suggestions that the ER Community could provide would be helpful. I think I need to approach this professionally, but also need to play the game a little bit...and play hardball.

The answer is to move on! In today's job world, putting in decades with the same employer is NOT the way to get ahead. Go shopping. Find out what you're worth on the market. And, importantly, be prepared to actually leave and start a new gig at higher pay.