Wednesday, August 01, 2007

A Big Pay Day for Shadox

I got a 16.6% raise yesterday. That would make yesterday a very good day on any personal finance blogger's scale. Since I joined my company slightly more than two years ago, my salary has increased by 55%. That's pretty impressive, but this large percentage increase is mostly because I was grossly under-paid when I first joined my company. If the information I have been gathering is correct, I am still about 15% below the market rate for my title, responsibilities and experience. I hope to erase this gap within the next year. How about that for an ambitious goal?

You may be wondering why I took a lower paying job to begin with. You readers always ask such great questions. I took the job because it allowed me to switch to a new industry which I really wanted to break into. In addition, my company is a major player in its field, and by taking my position I was able to join this company in a very influential role. Bottom line, I thought it was a good long term career move.

When negotiating my offer, I made a conscious decision not to negotiate my compensation and instead very aggressively bargained for my title and responsibilities. I gambled that this would pay off later down the line. This gamble seems to have worked, and if I play my cards right my title and position in this specific company could be highly marketable when hunting for my next job at some point in the future. I was also gambling that I would be able improve my pay in relatively short order. Well, it has taken me over two years to achieve this pay increase, but I think that I have made the right decision.

Before I end this post there is one more lesson that I would like to share. This lesson is all about how to avoid snatching defeat from the jaws of victory:

This salary increase has been in the works for a couple of months now. My boss has previously hinted at this, asked me what I thought my fair compensation level should be and even told me that I would be getting a raise. However, she did not tell me when the raise would come through, nor did she tell me the exact magnitude of this raise. Well, like any red blooded human, curiosity got the better of me and I tried to find out more information about this impending raise. To do so, I consulted with our VP of Finance. A few days ago he told me that my raise was approved and that I would be receiving 100% of what I had asked for.

It turns out that he had the wrong information. My actual raise was lower than what I had asked for. Since my company did not give me formal notice of my raise and its magnitude, I found out the specifics only when I opened my pay-check yesterday. Even after opening the pay-check I had to manually calculate my new salary based on my pay stub. And here is the punchline: I was actually disappointed that I got a 16.6% raise. What should have been a big happy moment for my relationship with my company turned out to be a little disappointing, because the company did not set my expectations in advance and because I obtained some erroneous information from a source that turned out to be unreliable.

The lesson of the day is this: if you are going to give someone a raise, set their expectations in advance. Surprises are highly over-rated, especially when they... don't come as a surprise. I think that this is a life lesson that goes well beyond salaries and personal finance.

3 comments:

Eric said...

Sorry to hear about the failed expectations. I took a gamble like yours a few years back. I went to work for a small IT company that had potential to grow large very fast. I knew if I was one who helped with that growth I could end up with a nice paycheck and title for future career growth.

I took the job and was offered $10K less than I wanted. I drove on expecting the ends to justify the means. We grow a lot in the first 4 months after I joined. Then the owner began enjoying his new lifestyle. He told me he never brought in more than $40K/year himself and was waiting until the company was generating consist $1,000,000/year profits before he gave himself a pay-raise. Well then I found out he was paying himself $80K. I figured he needed to live to. So I rode it on out.

Then he decides we need more people to grow. He asks me to help him hire someone. I do so. He tells the person that I hire that they will be in charge of me (though they had less education and experience) and paid them $15,000 more than me.

Well that was the last straw for me. I applied at a major company, and got a job making near market and have since taken another promotion and am now making 80% more than I was at the last company.

I'm now gunshy, but I still would like the chance to take that kind of risk again and experience results like you have.
Eric
Moneydork.com

Brip Blap said...

Most people probably would tell you that you're crazy to be upset over a 16.6% raise, but I understand where you're coming from. I'm surprised they didn't even formally tell you - that means, to me, that they expected you to be disappointed which is even worse. I think in the long run you have to consider that type of behavior when you think about leaving your current company.

Well, enjoy the raise anyway. It's still a nice recognition of your contribution, even if it's somewhat half-hearted. Just make sure you don't let them forget that you are undercompensated!

Shadox said...

Eric - I am all for taking career risks, especially early on in your career. As your career progresses, and the cost of failure becomes higher, that strategy becomes less attractive. Regardless, you always need to work that is managed by people you can trust. Know what I mean?

Brip Blap - there is some news. Yesterday my boss finally gave me my formal announcement letter regarding my raise. As a tactical move, I told her that I was happy with the raise, and while I am still 15% below market, I did not expect the entire gap to be bridged in a single raise. I will bring up the subject again in the near term, and will continue to do so until my salary is equal to my market rate. If I am unable to get to market within the next 12 months, I will find a new job.