Lest you think I’m going to arrive here throwing turds and/or grenades at corporate pay structures, let’s start by covering off on one thing: I actually took a graduate-level compensation class in, well, graduate school … and I got an A in it. That was largely because the final was pretty free-form and I do better with free-form than with structure, but still … I took a high-end compensation class and I rolled it up and smoked it. I know a little bit about salaries and calculating them.
If you Google “how is salary determined,” this article from Salary.com (logical) is one of your first hits. They list eight factors, namely:
- Years of experience
- Education level
- Performance reviews
- Who your boss is / what your reporting line is
- Your span, or number of reports under you
- Professional associations and certifications
- Shift differentials (in certain jobs)
- Hazardous working conditions (again, certain jobs)
I’d argue that’s a good baseline. This article goes more into it, especially around the idea of salary bands, and talks about demographic/market research. That also factors in, and often majorly.
Here’s what I would argue is missing:
- Value of your role in terms of revenue
- Proximity and relationships with decision-makers
There’s a lot of stuff to address here, so let’s go 1-by-1:
1. Salary is a huge facet of your life in a first-world, white-collar job situation — and yet, it’s one of the major things you can’t talk about. (Ironically, one of the others is sex, and that basically explains your existence on the planet. People need new rules about what is and isn’t OK to discuss.) Whenever people start discussing salaries, it’s fangs up at a lot of places. Buffer makes their salaries public, and people fleece ’em for it sometimes. That seems weird to me, but again, maybe I am a weird person.
2. It’s a huge facet of your life because it kind of determines how and where you can live, and what you can do when you’re not working. I agree completely that money isn’t actually tied to happiness — but unless the right kind of baseline is there, contentment/happiness will be hard to seek or find.
3. I think my two extra bullet points are the core issue here. No one is going to pay you $200K unless you’re in a role that brings in money, or unless you have a ton of experience/lead a huge department. (For example, the SVP of HR at some company might make $200K+, and HR technically isn’t a revenue center, but … that guy/woman runs an entire division and catches all the heat for it.) Also, being paid more means you’re closer to the top of a hierarchy. People closer to the top of a hierarchy tend to spend a lot of time together in meetings/off-sites/etc. Do you think they want to bring in some asshole to that group? No. They want like-minded individuals. This is essentially called “homophily” in business, and it explains a lot of the problems that orgs run into.
4. Performance reviews are a general joke at this point; I think people use those to justify/turn down the annual raise that (hopefully) stays ahead of inflation, but … beyond that, I don’t think they mean anything to most people. It’s essentially paperwork to cover your ass if you want to can someone. Yes? Can we all just admit that?
5. Here’s where things get interesting, IMHO:
- Job descriptions are usually pretty awful;
- The process of hiring off new headcount is usually pretty awful;
- Business needs are thought to be constantly changing;
You can come into a job on a description that’s not accurate, get hired through a flawed process, and then … weeks later, be doing something totally different than what you were hired for. What I’m describing isn’t even uncommon. It happens a lot. In some companies, it’s common. Hair-on-fire, deliverables, bandwith, etc… people running around screaming those words leads to poorly-contextualized hires, which leads to someone doing 1/2 the job, or 5x the job, they thought they would do.
And as employees, we’re supposed to deal with that … and maybe once a year we get a percent raise off a review, and maybe once every couple of years we get a promotion, even though we’re already doing more work? Point being here: salaries need to be considered more, and the context of the work and the changed role needs to be taken into account.
6. Final point, and more of a gear-grinder for me: you need to understand what your salary represents. While it’s often not very transparent in most companies, the essential idea is “Here’s a certain amount of money in exchange for a certain amount of deliverables/work, which will in turn help the company make money back.” That’s the general deal.
I’ve probably worked with 1,500 people in my life so far in various jobs, and approximately 4 of them have understood this. People are always praising others for “going above and beyond” when, in fact, the people receiving praise are just doing something they’re already compensated for. (“He returned my call on the account he manages!” “WHAT??!?!”) Your salary exists for a reason. It’s set for a reason, even if said reason is vague as hell at some companies. It escalates for reasons (again, may be vague too). And here’s the thing: when you say something “isn’t your job” and thus you can’t do it, well, no. Here’s how hierarchy works: if someone tells you that you need to do something, you need to do it. In return, you’re compensated every couple of weeks. Again, salary is there for a reason. It’s a tie, a point of connection, back between you and the company.
Admittedly it complicates a lot of stuff about how you feel, how hard you work, your personal ROI, etc … but it exists at a level for a reason. So please understand that first. Every time you toss yourself on the cross about some work you did or how late you stayed or whatever else, well, you were compensated for that — so it’s OK.
(Admittedly this does get a little complicated. Most people want to think, “Well, my job description and responsibilities say that I do this!” so when you do more, you deserve more money. That’s logically true, but no one claims a workplace is logical. Job descriptions are often flawed — see above — and priorities often shift — again, see above. It takes a long time for the process of more money to come into play even if the base ideas have shifted.)
Final anecdote: a few years ago, I was talking to this big-wig C-Suite type guy. We were at a conference. He was out drinking with some buddies, but he tells me, “After we leave here, I probably gotta go back to the room and work until 3-4am.”
To this day, I have no fucking clue why this guy said this to me. Did he think I cared deeply about his post-midnight schedule? I know he was trying to justify how hard he works — I get that — but here’s the deal. At that level, your base is six-figures, maybe more for the company in question, and your bonus is probably five-six figures too. You’re compensated for those 3am nights. It ain’t indentured servitude. You know what I’m saying?