Am I being underpaid?

February 4, 2008 10:35 AM

Am I getting screwed by my employer with regard to pay?

I really like my job. It’s everything I want it to be and my employers seem to be pleased with me as well and tell me they have big plans for my future. I’ve worked here for three years and though I started on a pretty low salary (considering my age, experience and university degree), I was willing to accept it as I had no formal qualifications in my field and I was fine with the idea that I needed to prove myself. So the last three years I have spent studying and taking exams. I will get the results of my final exam in a few weeks (I expect to pass) and then I will have a qualification which is probably the highest qualification in my line of work and highly regarded. However, ahead of my results, they decided to give me an unofficial promotion and basically pass the new job responsibilities over to me that I was promised once I passed all my exams (which I was very happy about, it’s what I had been working for).

We got our annual pay reviews today and I got the lowest possible increase that I was expecting. I was thinking in a range and the figure I got was the lowest end of my range. My boss told me that our parent company generally uses a 1.5% increase per year as guidance, and takes into consideration all of our benefits, which are quite good. He said that I had gotten one of the highest percentage increases of all the staff (10%). However, despite me having a university degree and now one of the highest qualifications in my field and having lots of new, major responsibilities, I don’t even make the national average salary. And I’m not in a low paying field - I work for a large multi-national bank in what should be a decent paying job.

I’m pretty confident that with my qualification I could get a job with a higher salary. I believe I could make at least 20% more. Can you please give me some perspective? It seems like a huge insult that in my 30’s and with the education and qualifications that I have that I would not even make the national average. I feel like I’ve had a carrot dangled in front of my face since I’ve started here and that once I gained all my qualifications I would be rewarded, and I don’t think I have. Well, I have in the sense that I have a lot of new responsibilities that I’ve been clamoring and working for since I started, but seemingly not the salary to back the extra work.

I have no idea how the whole process works and I may be over-reacting but I just feel hugely insulted. I’m hoping that someone who knows a little bit more about the process may be able to shed some light for me. If I am out of line, please let me know. If you think I should be looking for a new job, please let me know that too. I didn’t say anything at the time of the review - would talking to my boss about my dissatisfaction help? I have always gotten good performance reviews, my boss has let me know that they’re really looking forward to advancing me over the coming years. But they’ve been saying this since I’ve started and while they have done this (paying for training, giving me new responsibilities etc), I don’t think my salary has reflected this. Also, once the salaries are decided as far as I know they cannot be changed, so I don’t think it’s a matter of asking for more. Thanks in advance for any help.

posted by anonymous to work & money (20 comments total)

and tell me they have big plans for my future.

I never trust people or employers who say this but are unable to pay a decent rate today. Basically it is an excuse to jerk you around. And frankly, why trust someone to pay you well later when they can't pay you well today. There are exceptions, but this doesn't seem like one them. I suggest you polish your resume and include all that new wonderful stuff you mentioned and begin shopping around.
posted by milarepa at 10:41 AM on February 4, 2008

"Also, once the salaries are decided as far as I know they cannot be changed, so I don’t think it’s a matter of asking for more."

Says who?

What you're saying sounds entirely reasonable - you've gotten big responsibility increases, and are well-qualified, but are being paid well under what you could command elsewhere for the same work. Bringing that issue up with your supervisor is not out of the question at all.

(That said, be wary of taking averages and applying them without thinking - for example, are you in a particularly inexpensive area, while your better-paid peers are in more expensive big cities? But without any other data, you seem to have a classic case for better pay - or maybe for looking for a new job; big raises are often hard to come by if you're staying at the same employer.)
posted by Tomorrowful at 10:43 AM on February 4, 2008

The one thing I'm not sure about is the salary website national averages. I make quite a bit less than the average for my field according to those, but when I do the preview for the "customized" salary report (like $50) they say I'm above average in the sales email they send...and then demand the cash before they will give up the goods.

So I wouldn't use the national "average" salary as a basis. I would benchmark it against other colleagues in your job (at other companies).
posted by rocket_johnny at 10:43 AM on February 4, 2008

2nd'ing milarepa. "Big plans for your future" is a classic carrot-on-a-stick and if they can't pay you what you're worth then they're going to go heavy on this kind of talk in order to keep you around. It's an advantage to them to have someone with your qualifications on staff, after all. However, this doesn't mean that it has anything to do with you personally since they aren't paying for your classes.

The opposite of this carrot-stick is the old saw that the salary increases are hard-budgeted and can't be changed, everyone got the same shaft, etc. A business will pay what it takes to keep someone valuable, and if they won't then they don't have good business sense. This is also known as paying someone market (or competitive) rates.

I don't know what your niche is or what the salary differential is between what you have and what you want, but it's perfectly reasonable to be insulted if you think you're being shortchanged. I'd almost say it's your duty. You aren't working there for your health!
posted by rhizome at 11:01 AM on February 4, 2008

Get another job. I was in a very similar situation, working at a non-profit with very specialized skills that could have made me almost twice as much money in a for-profit setting. They attempted to squeeze every bit of work and knowledge out of me that they could with a non-survivable salary for this area, and they got away with it because I was told in Sunday School as a kid to be nice all the time, and concentrate on saving the world, not eating.

It got to the point where I had to get a second job and then suddenly realized, hey, wait a minute, this sucks. I told my boss that I would have to leave if I didn't get a raise, and she said, "we'll miss you." Buh bye.

Unless the boss is your personal best friend, I can guarantee that they are looking at their own belly buttons, and NOT for anything that resembles your best interests. And from their point of view, it's only natural that they'd maybe fib a bit to keep you doing exactly what they want you to do. It's not about you, so start thinking about what is best for you.
posted by Melismata at 11:01 AM on February 4, 2008

Refresh your resume with all your new qualifications, and look around for other jobs. Once you get some offers that look good to you, go to your boss and say "I have another job offer for $X/yr. I would love to stay here, since I like the company/people/etc, but if you can't match that then I will have to move on to further my career." Or some such. You can be as nice as you want depending on how much you want to stay in the place you are at.
posted by Grither at 11:13 AM on February 4, 2008

You have my sympathy, because I've been treated similarly. I don't have any idea of whether your current employer is screwing you over, but a couple of things jump out at me. ..

The '1.5% per year as guidance' wouldn't even cover inflation, and amounts to a 1.35% decrease in real wages.

The idea that salaries can't be changed is silly. If you believe it, I have a bridge...

Not everyone can be above average.

This isn't about fairness, it's about your employer acting in its own best interest, which dictates that it pay as little as it can get away with for the services you render. The only reason to pay you more is to keep you working for them instead of the competition, so you have to demonstrate an ability and willingness to jump ship in order to have any real bargaining power.
posted by jon1270 at 11:15 AM on February 4, 2008

Some perspective:

1) "He said that I had gotten one of the highest percentage increases of all the staff (10%). "
2) "I work for a large multi-national bank"

Generally the way this works at large financial institutions is that the base raise range is set from the top (as your boss said). He probably has a supplemental budget to increase some people's raises, and an additional budget for promotional raises. He probably took a bunch of that and applied it to you - it has to be your gut call on how much he had and how much he put to you.

If you really do like your job I would say to him that you understand its a substantial raise but that you still feel you are underpaid for your new duties, and if you perform them to the standards they expect over the next year or 6 months or whatever you would be expecting a "salary adjustment" - not a raise - and give some solid figures.
posted by true at 11:19 AM on February 4, 2008

Given your new responsibilities, did you also get promoted to new pay grade? In the big companies that I have worked for, moving from pay grade 10 to pay grade 11 is an opportunity for a big increase than just the usual merit/inflation/years raise that you would otherwise qualify for.
posted by metahawk at 11:30 AM on February 4, 2008

This is a common situation in large companies. They promised lots of opportunity for promotion and lateral moves, but the reality is, if you came into the company at a low salary, it can be very difficult for you to ever really make up the lost ground.

I knew someone at my last job who started out in an administrative role, but was very clearly way more competent than that job required and quickly moved up the corporate ladder in terms of job roles. It took her years, though, even though she outranked me in every way, to make as much money as I did, because she'd initially joined the company at an admin's salary and I had started out with a technical professional's salary.

Your only way to really make a huge salary jump may be to move to a different company, where they're hiring you as a professional with solid qualifications. Then that salary (presumably more than what you're making now) becomes your base there, and future increases work off that.
posted by jacquilynne at 12:19 PM on February 4, 2008

"If you really do like your job I would say to him that you understand its a substantial raise but that you still feel you are underpaid for your new duties, and if you perform them to the standards they expect over the next year or 6 months or whatever you would be expecting a "salary adjustment" - not a raise - and give some solid figures."

Ditto that.

Also, given that you've yet to pass your final and are all shiny-new in your new position, I'd give it through next year's review before trying your luck elsewhere. Obviously you can survive with your raise if you were surviving before it, and having the experience and a little of the shine off your certifications will probably make you more appealing to potential employers, not to mention improving your position in initial salary negotiations.
posted by notashroom at 1:09 PM on February 4, 2008

Perhaps you can get a realistic idea of what you are worth here. If what you are earning now seems out of line, update your resume and start putting out feelers.
posted by Daddy-O at 2:02 PM on February 4, 2008

nthing get another job. I was in the same situation years ago. Went elsewhere and got a 35% raise. IMHO Your current employer will never be able to match what you could get elsewhere due to company politics. You go in at a certain salary and even with promotions you cannot get to where you could with a new company.
posted by shaarog at 2:14 PM on February 4, 2008

"I don't even make the national average" is misleading. The question here is, where do you live? What is the cost of living there? If you get a job paying 20% more, will it be in your market, or would you have to move to a city with a 15-25% higher cost of living than yours currently is? It's more relevant to know whether you make the regional average. Since you're anonymous, we don't know where you live, what the certifications you've obtained are, what exactly your field is, or how much you're making relative to national and regional averages, we have no way to know whether you're being screwed by your employer.
posted by Cricket at 2:43 PM on February 4, 2008

Ditto what Grither said. You aren't working there for fun. You should be fairly compensated for the work you put out. If your qualifications allow you to make more, the only way to get an offer for another job. You can always leverage the offer to see if your current job really values your work.
posted by albolin at 3:34 PM on February 4, 2008

Are you a woman? If so, then the answer is YES.
posted by HerOdyssey at 4:14 PM on February 4, 2008

As others have said...if you think you're worth more, go out and prove it.

On the other hand, you got a 10% raise. That's more than a lot of people can claim. I can introduce you to a good many people who would be thrilled to get a raise of any sort.
posted by Thorzdad at 7:18 PM on February 4, 2008

follow-up from the OP

Thank you everyone for all of your answers. I was thinking that it may be time to look for a new job but was surprised to see that most people were in agreement with this.

To follow up on questions: I know that national average salary is not a good indicator but I have researched what people in my position should be making by speaking to headhunters and looking through job postings in industry publications so I have a pretty good idea what I should be making for my job in my region.

I did start in an administrative role and I agree that this probably hurt me somewhat. But as I had just moved thousands of miles from home to live here and I had no formal qualifications, I accepted the fact that I needed to prove myself.

I spoke with my direct supervisor yesterday and he admitted that my company doesn’t pay well and I could make more elsewhere but that people stay with the company for less pay because they like working here and then he gave a little speech about loyalty and that if I stick with it that I could be making great money in ten or fifteen years, which would put me well into my forties, which seems to me a long time to wait for all the hard work I’ve put in, and I told him as much and he said basically people here have to prove themselves before they start getting paid well. He also indicated that I wouldn’t be as happy working for one of our competitors.

So anyway, just wanted to thank people for all their good advice.

posted by jessamyn at 6:51 AM on February 5, 2008

Regarding his response: usually the longer an excuse is, the worse/more baloney it is. And suggesting that after three years you haven't already more than proven yourself... that borders on insulting.

An organization that doesn't compensate competitively in its market doesn't keep good people. Compensation is more than just pay but has to include some tangibles beyond liking it there.

Odds are you boss knows this and he wants to keep you because you're a bargain. That's fine, but don't let their problems interfere with your satisfaction. If you like the job enough to pass on other better paying opportunities, fine, but don't let THEIR rationalizations interfere with YOUR satisfaction.

Decide how much liking your job that much is worth. Maybe it's worth a lot - I took a cut to change industries and I haven't regretted it for a second. But use your own criteria, not theirs.
posted by phearlez at 9:27 AM on February 5, 2008

I spoke with my direct supervisor yesterday and he admitted that my company doesn’t pay well and I could make more elsewhere but that people stay with the company for less pay because they like working here and then he gave a little speech about loyalty and that if I stick with it that I could be making great money in ten or fifteen years

OK, but in my world this is absolutely unacceptable. What, he admits they don't pay well now, but they're planning on being able to pay well in the future? I mean, my first question about this would be, "Why aren't they that successful now?" I'm sure the company's lack of success has nothing to do with low pay for the people who actually do the work.

The employees don't continue to work there out of love, they work there because they're OK with everything. Think people haven't been telling the boss they just love their job while signing for their cost-of-living raise? What else are they going to say? Just ask around a little bit to see if people wouldn't take another job for 20% more money. Easy research there.

Your boss has come as close as you should push him to say that you ought to like it or lump it. They're not going to do you any favors, which you now know for a fact won't be forthcoming for at least the next ten years. DTMFA.
posted by rhizome at 3:45 AM on February 6, 2008