> You can observe this as a manager, when you can see the salaries of people and watch the pay inequity get worse and worse to punish people who have been there a while.
If you’re the manager… do you let this happen intentionally? Why not fight it?
I constantly hear how people want to retain their employees since it’s cheaper than new hires. Why not take actions to reward the loyalty?
Power to do this is limited at many Big Co (or small Co copying Big Co policies blindly).
1. Usually, policies around max % pay raises are set the organization level. In the name of equity, the right battle to fight is having a higher cap for everyone which a middle manager is ill-equipped to do well.
2. Yearly budgets are set early partly based in the above formula, you'll need to be in a room with the C-suite to make the case that costs should be higher than they are next year to right-size everyone.
3. Sometimes, you requests for outsized adjustments get rejected. "Hey we're paying Senior XYZ less than New Hire XYZ, can we increase Senior XYZ's comp by 20% to match the market rate?". Some answers: A. "No, it's against policy and needs an excalation. Sr XYZ isn't critical enough to the business to change the rules. B. "Sure, but you still have $ABC budget for the year. That raise will mean reduced budget for person G's promotion or we give up headcount next year and Project U is at risk, etc etc".
I'm sure others here can add even more examples.
I've come to the conclusion that any policy that is not "We will automatically raise you to top of market"* like Netflix will have this problem.
For the C-Suite, that means costs are a bit harder to predict and it also means that in some world, you should be ready to accept your salary going _down_ if the market moves downwards and you're well above the pay to hire a new person.
If you’re the manager… do you let this happen intentionally? Why not fight it?
I constantly hear how people want to retain their employees since it’s cheaper than new hires. Why not take actions to reward the loyalty?