Salary Negotiation/Dilemma

B

BigLeonard

100+ Posts
Here's the situation:

Two employees work the exact same position in a company, and both rely heavily on production (base + bonus). In past years, the position paid only base but the company decides to incentivize the position. The plan is pitched as if both are equal, but bonuses will be entirely separate as each employee works a different region of the country. Information leaks, and one employee discovers he's paid 20k less in base pay than the other employee.

Does the employer have any obligation to pay equal for equal job?
 
I think it should be OK to share your salary information. If you make more than me I can either a) shut up and take my pay or b) explain to mgmt why I'm worth more than I'm getting paid. Management just likes it to be all secretive so they don't have to deal with b)
 
Nope. They were good with what they were making when they agreed to the base pay. Either they can ask for more, which is fair, or they can leave.

Company is under no obligation to pay the same base pay. If you get one for cheaper, good on the company. The employee agreed to that price for the service. no one is getting screwed.
 
Are they working in the same place?

I know law firms often times might hire a first year associate in NYC for 175k for example, and the same person in h-town for 140k b/c of cost of living differences. You said they had different regions of the country- does that explain it?

Either way I don't think you can force management to do anything, but I'd be making my case for why I deserved the money the other guy is getting. But remember, you might have to prove that you could get it elsewhere if you really deserve it and that might be tough in this economy.
 
"Owes"? That's funny.

Base is often a product of when you were hired and how you negotiated at the time. They're not going to pay you dime one more than they have to. In inflationary times, newer employees will often make more than older employees - even given that those older employees have received raises etc in the time since they were hired.

They don't owe you much. And I wouldn't play that game in this economy. I might play that card if you really are a producer, but not know.
 
bevosayhi either works in HR or is clueless.

as an employee you want to be able to freely trade salary information so that you know you are getting market rate compensation. you should never let HR know the exact details, but you can make a more informed ask. i really dont understand remaining secretive about your salary just to please the employer. they'll take advantage of your lack of information. don't let them.
 
Employers never have an obligation to pay more, unless it's in their contract somewhere. Now, whether the employee actually is worth more to the employer has a ton of components.

1. Are they a good employee?

2. Can they be easily replaced by someone cheaper? Is it hard to train them for that job?

3. How likely is your employee to be able to get another job that pays better?

4. How unhappy is your employee, and how badly could they screw you over? That is, would you be in deep **** if they took a job with your competitor or something like that?

You've got to take all these variables into consideration. It all boils down to whether the job they are doing is worth 20k more a year. If it is, pay them their fair wage. If it's not, you'll probably have to throw them a bone of at least 5k and a song and dance about how different parts of the country have different standards of living or whatever if you want to keep them. If they are stuck and you know it, play hardball and tell them they are lucky to make what they do in this economy. If they don't like it, look for another job.
 
My role you know where has a ton of different levels of pay. The guy sitting next to you could make double or half what you make.

If the guy not getting the same amount is a good employee, there's his leverage. Depends on the job. In my line of work, sometimes the guy that makes the most money just happens to have the beest acct set.
 
To piggyback off of this thread, do hiring managers take salary demands when considering who they hire? What do you think if asking price is too low? Too high?
 
When I was hired at a newspaper in 1983, I was told they started all reporters at $200/week. I had three years experience, but they said $200/week was the maximum they could offer. A few months later I found out that two male reporters that were hired right before me were getting $230/week, straight out of school.

I went to the managing editor and told him that if my income didn't increase to a point where I was outearning those guys, I would find someone that would pay me what I was worth.

Within a month I'd been increased to $230, and within another month, I went to $250.

The logic was, well, they're men, and they might get married and need more money. Which, of course, is no logic at all. As I pointed out, I have expenses, too.
 
Thanks for the responses. The most troublesome part of the dilemma is that the employee making 20k less is more highly regarded. His superiors have sung his praises, and even told company executives that he's the better of the two. He's in a bad situation because he wasn't included in the special arrangement made for employee #2. Employee #1 was assured all would be taken care of, but the bottom fell out after it was discovered by another executive that all of these special arrangements had been made without their knowledge. As a result, #1 got nothing.

By the way, both are the same ethnicity and gender.
 
Well, is #1 gonna stick around? Depending on the industry, tough to be out there looking for a job right now. On the other hand, if he really is their top asset in that position, stands to reason that they need to take care of the employee before they bolt. This is exactly the kind of things employees will hold a grudge towards their employer about. You'll find that out when the economy turns around and they leave for the next good oppertunity.
 
I feel for #1 because he got caught up in a pissing match between two executives. He is upset because he loves his job, and doesn't want to leave the company. He obviously feels burned and undervalued. In the end, it's all been very unprofessional. With the economy the way it is, it's probably in his best interest to stick it out. It's not the time to be the "new guy."
 
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