Tuesday, May 27, 2008

What am I worth?

The Value of a Soul...(or at least a warm body)

I am currently making $50,000/year. I applied for a new job today and will eventually have to tell them how much I'd like (assuming I get the position). What do I say? I am satisfied with my current salary. 50k is nothing to sneeze at, and with some basic money management skills we should do quite nicely as a family of four on this income.

On the other hand, what if I ask for 60k and get it? I don't want to come across as pretentious, cocky or greedy, but I would like to make as much as I can. An extra $10,000 a year would help nicely with our house buying goal.

Dispair..ity

Today after I had prepped my resume, I asked my colleague on the inside of this company if he would be able to give me a salary range I could expect. Through our conversation I discovered that he is making substantially less than I am currently -- probably in the $40,000 range. His skills are nearly as good as mine in some areas and better in others, and he's probably a harder worker.

He isn't, however, as assertive as I am. I'm not pushy or anything, but I know what I can do and I know what I want. If this company won't give it to me, I am blessed to be in the position that I can walk away from it. I'm not sure that my colleague could pull off the same thing.

If we were sharing salary info, he would know that he is being under paid, and could ask for a raise. On the other hand, if his request for a raise were turned down, and I were hired on at my current salary or higher, there might be a bit of animosity or bitterness between the two of us.

A Tradition of Secrecy

My dad has never told any of us what he makes each year. The closest I came to finding out was when I took the ACT test in high school. It asks for your parent's salary info during the registration, and when my dad said $100k+ I was amazed. To this day I have no idea how much more than that he makes. I expect I'll only find out when I have to handle the will.

I think that his attitude is typical and professional. I'm not completely convinced however that it's the best for everyone involved.

In Praise of Openness

In an open market place I would know what others are making, and I would be able to ask for a salary that isn't too far off the mark from what my peers are making. If I wanted more money than they are making, I would have to argue why I am a better value to the company than the other workers.

On the up side for me, I wouldn't know if I was getting what I am worth.

As an up side for the company, they could offer lower salaries, but then offer more performance bonuses.

In Praise of Closedness

Secretive salaries have many benefits for companies. For one thing, it is harder for competitors to poach employees. The competitor would have to offer enough extra money to be sure to pass the employee's current salary.

Another reason is that some workers aren't going to request enough money for their pay, and the company will get a good deal since the employee doesn't know that they are being undervalued.

Employees not knowing each other's salary provides less opportunities for disgruntlement between them.

Lastly, as a potentially valuable employee I know that I can request a larger salary because I know that they are saving money by not paying my colleague as much as he's worth. (Of course, I'll never know if I'm also getting low balled, just not as badly as him!)

Conclusion?

I'm still undecided about if I would rather have everyone's salaries out in the open.
Perhaps the best solution would be to publicize anonymous statistics so that the data is available, but that individuals won't know who to be bitter with.

2 comments:

MKL said...

One thing you can use to help you determine if you are at least being paid fairly for your sill set as relates to your induistry and profession is to become familiar with the O*NET Database. this is sued by companies, and also often used by Immigration case managers when they are negotiating things like H-1B Visa's and Intended Job vacancies. The O*NET database can be viewed at http://www.onetcenter.org/. In addition, it can be used to see if you have the skill set that is nationally considered necessary to qualify for your rate of pay desired. It's not a full transparency into everyone else's salary, but it's a good way to get a feel as to the norms for your industry.

Realize that, oftentimes, there are tradeoffs that one makes, and the O*NET numbersa are meant to be a guide, not an absolute. In my case, I work for a very small company and actually make less thatn the median for my line of work, but I have a larger share of ownership in the company should iot go public or be purchased by another entity. This was something I considered, and I decided the potential upside was worth it to me, plus I really enjoy the people I work with (I'd rather have a job that pays OK that I love compared to a job that pays great that I can't stand).

bmitzleplick said...

I try and stay away from giving out any sort of salary expectations (including expected benefits) before my potential employer gives theirs. Usually the first one to mention a "price" is at a disadvantage in negotiating as they've laid their cards on the table already.

One other important thing is to figure out what your minimum expectations are beforehand and be willing to walk away if they are not being met. Obviously, if you're employed already, this is going to be easier to do.

Cheers,
Brad