Denied a raise; what is my next step?
October 30, 2008 8:21 AM   Subscribe

I was denied a raise that I really deserved because the small company I work for "isn't doing so well right now." My request came after I was given a very positive review in which all parties agreed that have exceeded expectations.

When my request was denied, the individual who denied it acknowledged that there is a large inequity in terms of pay in the office and that when we have enough money to give raises, I am the first in line. I was also told that we need to wait and see how the 4th quarter goes, and that I should ask again in 60 days because the financial picture might look better then. I feel that I'm being fed a line here and that when I ask in January the "picture" will still be that I'm not being paid what I deserve.

So, are people paid based on the quality of the work they do or the ups and downs of the business? Should I insist on equal pay for equal work or do I just trust that they have my best interest at heart but just honestly cannot afford to pay me what I'm worth?

If it matters, I'm the youngest person working for the business and am female. The "inequality" in salaries is that some individuals make four times the amount I do.
posted by RingerChopChop to Work & Money (40 answers total) 4 users marked this as a favorite
Well, either you believe them or you don't. In this economy and being that you are young and new to the work force, I would hang in there and do what they said. Look at it as you may not be rolling in cash but you are building your CV, gaining experience and look for every opportunity to learn something. Then, if you still feel at a later date that you are being treated unfairly, you will be in a better position to move on. And hopefully, there will be more jobs to move on to. Good luck..
posted by pearlybob at 8:31 AM on October 30, 2008

Maybe go to your management and get to them to put on paper that when their financial position is stronger they will give you an agreed upon merit increase. If the company doesn't have the revenue or cash on hand to give you the raise today maybe they will in 6 months or a year.
posted by zennoshinjou at 8:33 AM on October 30, 2008

They have the company's owner's best interest at heart. That should overlap with your own best interest somewhat, but it's primarily their job to make money.
posted by kidbritish at 8:33 AM on October 30, 2008

I'd say both the quality of work and the soundness of the business go into salary. Take, for example, the airline employees who took pay cuts to try and keep their employers alive. Granted, here it's not an across the board cut, but it sounds like it's a freeze on raises until things pick up again, which doesn't seem unreasonable given what one reads in the papers.
posted by craven_morhead at 8:34 AM on October 30, 2008

I could be wrong, but this doesn't sound like the kind of excuse you get when someone's just trying to bullshit you. The economy, as you may have heard, really has taken a dive recently. I'd be surprised if it recovers in the next two months - so while you may be told the same thing in January, that doesn't mean it isn't true.

Having said that, people making four times what you do doesn't sound right. You're not giving us a lot to go on, though - do they do the same job as you? Is your job to generate business and they're better at it? Are they very senior and you're very junior?
posted by Dasein at 8:34 AM on October 30, 2008

The bottom line of the business ALWAYS affects how big a raise is, or if you'll get one. If you don't believe that, just look at how many companies are having to do layoffs right now. Hell, right this minute I'm on a listen-only conference call with my CEO trying to placate the employees about layoffs that were announced yesterday. More are to come, and this company has 5,000 employees. Surely your small company feels the pinch even more, because the margins are likely slimmer.

I'm not saying be happy with no raise. I'm not saying be happy that salaries exist that are 4x yours. (Though if they're not for equivalent jobs then you're talking apples and oranges.)

I am saying that you have to measure how pissed you are with the overall job outlook right now. Ask again in January, but think long and hard before issuing any ultimatum about getting a raise or leaving, because you'll have to follow through.
posted by ImproviseOrDie at 8:36 AM on October 30, 2008

As is so often the case in posts like yours, crucial information is left out:

1) You mention you're female. Do you have reason to believe this is a factor in your low pay?

2) You mention that some individuals make "four times" the amount you do. Do they do the same work, and / or have the same position?

Given the economic climate, it's easy to see where the company could be telling the truth. And given your omissions of information, it's hard to discern whether you're getting cheated or not.

My advice?

1) Get you resumé together.

2) Start looking for other places to apply.

3) See what they do in January. If they come through and you enjoy your job, congratulations. If they don't, start looking for another job.

The bottom line is, it really doesn't matter what their reasons for salary inequities are, you should get paid what you deserve. Even if times are tough and they can't do much about it now (well, by January), you should look for a company that pays what you deserve. Where there's a will, there's a way . . . either for you to find a job which pays properly or for them to cough up decent cash so they don't lose a valuable, hard-working employee.
posted by Dee Xtrovert at 8:37 AM on October 30, 2008

So, are people paid based on the quality of the work they do or the ups and downs of the business? Should I insist on equal pay for equal work or do I just trust that they have my best interest at heart but just honestly cannot afford to pay me what I'm worth?

People are paid based on what the company is willing to pay them. Right now, with credit for businesses dried up and with the GDP and personal consumption contracting, the fact that there is less money for companies to pay their employees is one reason why layoffs are increasing and the unemployement rate has gone up. Your company is not the only one that is denying raises, forcing individuals to take days off, cutting hours, etc. The world is in a recession - this is part of it.

The "inequality" in salaries is that some individuals make four times the amount I do

So? Do these people have the same responsibilities you do? Have they been there the same length of time as you? Are they executives? Do they generate more income for the company than you do? Is there a man at your company who is doing the same job as you for more money? Has he been there for the same length of time?

There is nothing in this that's a real question - it reads more as if you are upset about having your raise denied and you want to rant about it. If you feel that this in unfair, find another job. What your company did was say that they are unwilling to pay your more money right now. So find someone that will. But make sure that you aren't pulling the thing that young people tend to do where they overvalue themselves and believe they are worth more than they really are. If you are making much less than another employee doing the same job at a similar company, then go find another company. If not, then maybe it's time to readjust your own image of self worth or learn to manage your expectations when it comes to working.
posted by Stynxno at 8:40 AM on October 30, 2008 [5 favorites]

Normally if companies can't pay you it's not unusual to receive some sort of equity. Did you ask for shares?
posted by blue_beetle at 8:43 AM on October 30, 2008

You know how we've all been reading the news for months and wondering, "How is this going to affect me?" Well, this is how. You should take it in stride for the time being.
posted by [NOT HERMITOSIS-IST] at 8:44 AM on October 30, 2008

Point out that they'll be doing a lot worse when you leave, given your performance. You'll want to at a bare minimum have your CV updated and better yet research / be tin talks with alternate employers.

...the cost of employee turnover to for-profit organizations has been estimated to be up to 150% of the employees' remuneration package...

Threatening to leave is often the fastest way to a raise, sadly enough.
posted by allkindsoftime at 8:44 AM on October 30, 2008

If it is an across the board freeze on raises, i would really hesitate to push for a raise. They may be not giving raises in order to avoid laying off employees for example. Many small businesses are hurting - the smart ones are taking cautious steps to avoid disaster.

I would follow through in 60 days and judge by their response then. Althought I agree there will probably not be much recovery in 60 days
posted by domino at 8:45 AM on October 30, 2008

*be in talks. unless you work in industrial metals in which case tin talks is probably fine too.
posted by allkindsoftime at 8:46 AM on October 30, 2008

Start looking for a new job. If you find one, you will be able to use its salary as a negotiating point. Or, if you are laid off, which often happens when companies can't make payroll, you will have a new job to go to.
posted by ikkyu2 at 8:51 AM on October 30, 2008 [1 favorite]

It depends on the company -- some will try to do right by their employees and others will try to get away with as much as they can before employees start fleeing. Don't assume they have your best interests at heart. It doesn't sound like they're necessarily trying to get away with something either -- they told you to check back in 60 days, which is not that long, in light of a bad financial climate. It sounds like you need more information -- if you are not similarly situated with the individuals who make four times what you do, it would be a good idea to interview for a comparable position in another company -- that way you'll know what the market is for your skillset and experience and have somewhere to go if you conclude that your company is not going to do what you feel they should. Also, if there are not good comparable jobs or the salary is pretty much what you're making now, that is valuable information to have and may make you feel better about your situation.
posted by *s at 9:21 AM on October 30, 2008

I would try and get some documented specifics around when you can expect a pay raise. Also, it's often the case that one needs a job offer to get a raise.
posted by xammerboy at 9:28 AM on October 30, 2008

Just because you are good at your job and exceeded expectations doesn't mean that you are expected to do the same job as people making four times your salary. To me personally it sounds like you are comparing yourself to people on much higher rungs and feeling bitter you can't double your salary after your first review. Otherwise, why would you have accepted a job where other junior employers make four times what you were offered?

But yeah, it sucks to be starting your career in a financial climate like this, and it does seem like a lot of people are making less than they could have 5 years ago, but that's how it works. Don't threaten to leave or etc. unless you actually want to follow through.
posted by shownomercy at 9:40 AM on October 30, 2008

Can you get what you're worth, or at lease considerably more, somewhere else? Then go out and get that. Use that offer as a negotiating tool at your current company, and if that doesn't work, take the new job. Otherwise, in the given economy, you really aren't worth what you think you are.

Basically, if the company powers that be think they can keep you and your good work and a good company morale while paying you your current salary, then they're going to. Its a business decision, not a personal one. If the money's not there, the money's not there. If your unhappiness is a tradeoff the company is willing to take in exchange for not paying you a higher salary, then that's the decision they've made. If you can get something of equal quality for a lower price, you're going to do that -- especially when money's tight. It's just the way it works.

disclaimer -- I too am waiting on a raise that was promised to me in October, then November, then, well, whenever the money comes in. I'm waiting it out, for now...
posted by cgg at 9:50 AM on October 30, 2008

there are two ways companies can reduce overhead: headcount, and non-headcount. sounds like your company is trying the non-headcount method, which means that you won't get fired, but don't expect a raise, because they're trying to cut corners elsewhere. they can't then turnaround and give you a raise.

try this approach instead: since the person you spoke with in management acknowledged there is a salary inequity, instead of asking for a raise, what you want to try for is parity. in other words, they should gradually bring your salary up to where it "should" be.

i'm going to point out the folks being IMHO a little to harsh on you that MANAGEMENT AGREED WITH YOU THAT SALARIES ARE NOT EQUAL. If they didn't agree with her then they would have quickly and easily fed her the lines about "well other people have more responsibility" or "you don't do the same job as X so you can't compare them." MANAGEMENT AGREED WITH HER.

for everyone pooh-poohing your sex and youth, it may or may not be a factor. they may look at you and think, even subconsciously, "she's young and single, she has no dependents, while bob in accounting just had twins and has gone without a raise for two years" or "joe in marketing is best friends with the CEO at our biggest client. we can't afford to have him walk, so he'll get a raise" - it's not just that you're the youngest, i'm going to assume you've been there the least amount of time, so your contribution - although there's no question it's been exemplary - doesn't have the same value to them YET. anyone who says that this kind of reasoning doesn't go on in small companies is either lying or hasn't been told the truth. i've watched it happen. i've been told that since I don't have children or a mortgage i can't possibly have the same kind of obligations that Matt or Tom have. It's not saying "we're discriminating against you because you're a chick" but it has the same effect. I am not saying that is happening here, just that the flood of commenters condescending to this woman should walk in someone else's shoes before categorically stating that there is no discrimination based on sex in the work place. c'mon.

In short, I don't think you're being fed a line. I think they are telling you the truth. If you like the company, the people, and the work you do, I would stick it out. I would, however, get your resume in shape, because you should never stop looking for your next job. In January, see what happens, and then also see if you can suggest something along the lines of "i realize you can't give me a 5% raise but can we discuss bringing my salary up to parity?" and you can also try suggesting some creative ways they can compensate you - do they already subsidize commuting? is there a work-related expense like internet or phone they could pick up the charges on? how much time off do you get - could they let you out at noon on friday twice a month without it counting against vacation? do you want to go back to school or take classes?

i have had a lot of friends who work for small companies and they get to the point where the company just can't pay them any more money. but instead of letting them quit, the company has taken on an expense the person has and that the company can get a tax break from paying. it's not a raise but it does put more money in your pocket every month because you don't have to pay it. so that is something else you can try.
posted by micawber at 9:54 AM on October 30, 2008 [2 favorites]

I've been living this for tha past year and basically, it boils down to how loyal you feel towards your company and how much you trust them.

One thing that you can do is get things out of them other than money. I was able to wrangle the ability to work from home and a few more vacation days as a holdover until the budgets increase.

Ask for things like that (things they can do to make your life better without affecting budget) and treat their response as a test. If they deny you, they are messing with you. If they say yes, they do want to keep you around and keep you happy, but they just can't do so with money right now.
posted by rmless at 9:58 AM on October 30, 2008

This happened to me. Got a great first performance review at my last job, got an insulting pay raise - eight dollars per paycheck - expressed my irritation at my boss and he promised me that he "had some discretionary spending coming his way later in the year, and if you do well on your next assignment it'll go your way." Worked hard, got a great review of my work, reminded my boss about what he said and it turns out he forgot. I was pretty pissed and I left before my next performance review.

The lesson, I think, is to get everything in writing. Unfortunately, small companies never seem to have enough money to be fair to everyone. Compounding that problem is that I've noticed smaller companies aren't organized enough to have standardized pay grades like larger companies (which can be good or bad, depending on your point of view). Be aware, though, that sometimes you'll get the screws because the management has their own favorites - they're only human, after all.
posted by backseatpilot at 10:02 AM on October 30, 2008

My $0.02: I think that you should give them until January, since it's their first offense. But, between now and then, put some feelers out there. Hit, talk to recruiters, see if there's anything good out there.

If you feel re-hosed in January, redouble your efforts to find the next big thing, and you should eventually land it.

In the current economic climate, I would strongly recommend that you not even consider leaving without a written offer in hand. And, try not to get caught interviewing. :)
posted by Citrus at 10:11 AM on October 30, 2008

I don't know what you should do right now, but for the sake of your long-term mental health, let go of the cruel fantasy that people get paid according to 'what they deserve' or 'what's fair.' Instead, think of three particular numbers:

The first number is the smallest amount of money that you're willing to accept, which is probably just a smidge larger than the amount you'd get from another employer competing to buy your services. Obviously this depends, in turn, on whether any other companies are interested in you.

The second number is the amount the company thinks your services are currently worth to it, adjusted depending on what they think your services might be worth in the future.

The third number is the amount the company can afford to pay you right now without screwing up other elements of their business plan.

You get the smallest of those three numbers. It's not about fair, it's about value and negotiating position.
posted by jon1270 at 10:27 AM on October 30, 2008

sixty days isn't really getting rid off you, so I don't think you're being fed a line. this being a small company also makes it somewhat tough to argue for equal pay for everyone. I would give it those sixty days and I would work even harder during them. bust your tails and go all out. then request a meeting to discuss a possible raise as soon as this period is over. make your case for how you are an asset to the company, how you go all out for them, how you want to know you're appreciated as well and keep asking for something. the ones who got more got it because they drove a hard bargain. think about what you would say if they again came with the "we're doing badly" line. ho about "okay, how about we agree to a raise and you can postpone paying it out for three months?" that would get you a nice lump sum as well. work with them, try to find an option that will allow them to reward you and not have another significant dent in the books right now - if that's still the issue. if they value you, they will try to work something out and they will try to make you happy.

I strongly disagree with "start looking for a new job" kind of advice. there may be a time for that but this was only a minor setback you had in one meeting and I honestly believe you caved in because you didn't prepare for such arguments beforehand. give them another shot before you take such drastic action.
posted by krautland at 10:38 AM on October 30, 2008

Do not threaten to leave, unless you are prepared to do so. (have an offer somewhere else, etc.)
posted by dcjd at 10:43 AM on October 30, 2008 [1 favorite]

Well, you're not alone. I just got promoted last month and got a payrise of all of 3%, which is less than inflation here in the UK. My employer - a large international firm - tells me that they are trying to avoid job cuts and that I should count my blessings to have got any kind of payrise and the promotion in the current climate...what they did is basically lower the salary levels for all grades within the business and whilst nobody earns less than they did before the entry pay for each grade is lower than last year with the result that I am on less money than someone promoted last year...and no, fair doesn't come into and yes, as sombody else said, this is how a global financial crises and recession affects you!

Now I am really happy in my job (other than the payrise) so I'll just sit it out but I suspect not everybody feels this way.

So in answer to your question - have a look at what jobs are out there and what salaries are offered for people at your level. Also ask them to put in writing that they will reassess the payrise quarterly and what it will be when they can afford to pay it. Come January, if you find you have been offered significantly better pay elsewhere and if they don't live up to their promise leave. In the meantime look out for all opportunities to take on more complex work in your current role to help build your CV.
posted by koahiatamadl at 10:57 AM on October 30, 2008

Start looking for new work. This should serve as a lesson to you that your resume should never be more than three months out of date.

There's no reason to do this in a hot-headed way or take it personally; we live in a culture now where - regardless of whether you think its right or wrong - employees are considered a resource little different than electricity or insurance. They are brought on and let go as needed, sometimes with very short-term goals in mind. And to be blunt, as a non-owner worker, it's not your business or place to question whether this is good for the company or not. When you don't own the joint you don't get a say in how it's run.

So cultivate an attitude that's going to help you best cope with this reality of the modern workforce. Don't focus as much on what your co-workers are making, focus on whether you feel appropriately compensated for what you do and what you could make elsewhere. It's remotely possible that you're the one being paid market rate and your co-workers are overpaid. Obviously it would be better to be one of them, but that limits their mobility unless they're willing to take a pay cut.

The point - and I do have one - is that deciding if you are happy or not based on what those around you make is a path to misery, same as judging yourself by your neighbor's new car. It's only useful to know what the inequity is as a measuring stick to determine what you might be able to get. Always keep a mind towards insuring your continued attractiveness as an employee, to your current employer and other prospective employers.

Decide how you feel about staying somewhere that is willing to let you know what they think about your comparative worth by refusing to pay you what they pay your cohorts. Does that mean something or not? Are you already being paid competitively or not? If you're not being paid as much as they'd have to pay someone who comes in off the street to take your position, think about what that means for your bargaining position.

Just make sure you update your resume and start assessing what else is out there. Because you can be sure that before they made a decision about you that they looked at what's out there. Don't be less informed than them - that makes them the decision maker about your life.
posted by phearlez at 11:00 AM on October 30, 2008

Also, what dcjd said is right - a lot of employers will try and match the going rate in the market place and if you threaten to leave they will let you walk...if you make this threat and then stay it undermines your future bargaining position significantly.
posted by koahiatamadl at 11:06 AM on October 30, 2008

I've worked for an employer where there was a freeze on raises before. I did my job at one year I asked for a pay increase and was denied. On my personal time (very important!), I updated my resume, did some interviewing and was offered a position. I then told my employer about my offer, told them that I didn't want to have to leave and stated clearly what my compensation expectations were and how they matched up in the industry. I was then given a raise and I kept working there. So my opinion about pay rate freezing is a little biased. I never believe them. If they want you to keep working there, then they'll find the money. If they can't, then honestly, you might not want to work for them.

My advice: Let them know that you are intent on getting this raise. Ask for it written on paper. If they can't do that, then let them know you're documenting it. Then be professional in the office. No complaining to co-workers. On your own time, update your resume, look at the market. Make an honest evaluation of what you expect to be compensated based on what others are willing to pay you. That means looking around, doing a little interviewing. When I was younger, I thought I was getting screwed all the time, but honestly, I probably didn't know as much as I thought I did. Then when it comes time to get the raise, keep it professional. Only discuss it with the person who made the promise. If they can't follow through, you need to look for work somewhere else.

I've changed jobs probably 5-6 times now, every time it came with an upgrade in pay and title/role/responsibility. Sometimes that's the only way to make it happen.
posted by kookywon at 11:33 AM on October 30, 2008 [1 favorite]

If you ask me, they're probably telling you something along the lines of the truth.

But it's a bit like a game of poker. If you really think they're bluffing, you call them on it and go take a job elsewhere for more money. If you've exceeded expectations so much they'll either offer you the raise to stay or they weren't bluffing and can't afford it and you make more money elsewhere.
posted by MaxK at 11:47 AM on October 30, 2008

So, are people paid based on the quality of the work they do or the ups and downs of the business?

Typically, people are paid based on the ups and downs of the business. It would make very little business sense to do otherwise.

The "inequality" in salaries is that some individuals make four times the amount I do.

If you think this is true, I suppose you should have asked for more money when you started. I don't know of any laws that claim that

Point out that they'll be doing a lot worse when you leave, given your performance.

Please don't do this. Thinly veiled threats and ultimatums usually don't go over too well, and usually reflect badly. You agreed to your pay when you started the job. If you didn't figure guaranteed raises into a contract, then you're really in no place to complain that you're not getting raises. Better luck next time.

I'm not sure what you mean by 'equal pay for equal work'. Last I heard, unless you can prove that you're being paid less because you're a woman, there is no such thing as 'equal pay for equal work'. This is not easy. If you're in an office or professional setting, there's almost no way to prove that your job duties, seniority, etc are identical to the people who get paid more. Sure, you can sue and raise a big stink about it, but you'll probably have to pay your legal fees out of your own pocket.

Don't like what you're getting paid? Find a new job, then quit. You can't force an employer into doing something they don't want to do.

Don't burn bridges. This isn't the company's fault, it's yours. In our society, the company must worry about its bottom line. You may not agree with this philosophy, but that's how it works. Put your energy into finding a new job, and leave the bastards in the dust.
posted by Geckwoistmeinauto at 12:02 PM on October 30, 2008

My husband's company is in much the same situation. Your manager's line sounds completely believable.
posted by desjardins at 12:18 PM on October 30, 2008

Believable, but that doesn't mean you have to take one for the team and stick around and put up with it.

Look for another job, casually, but do it. You should be doing this anyway, any time an employer hints at financial difficulties or your own eyes tell you that they are mismanaging cash.
posted by sondrialiac at 12:41 PM on October 30, 2008

If your compensation is negatively affected by lean times for the company, you're informally enrolled in a program known as "anti-profit sharing" in which you, the employee, gets to shoulder some of the hurt of the whole organization.

This is not in and of itself a bad thing, provided it is balanced by an actual profit-sharing programme when times are good.
posted by CheeseburgerBrown at 1:01 PM on October 30, 2008

Wow, thanks for all the excellent responses. Looks like I was a bit naive to assume that performance was the largest factor in compensation; it really helps to get some perspective.
posted by RingerChopChop at 1:25 PM on October 30, 2008

I would like to caution you against demanding a raise right now. Any raise you get right now will be far smaller than what you would get in better financial times. And, if you get one now, you may not get another one for some time. Better to wait and get the bigger raise.
posted by The Light Fantastic at 3:20 PM on October 30, 2008

Believable. It's not a good time to be a small business and it's not a good time to be huffing and puffing over a delayed (not yet denied, just delayed) raise.

You are youngest and, for the sake of argument, probably the one with the least amount of experience. Explaining how your leaving will hurt them or threatening to walk is not going to benefit you - you are likely the easiest to replace. Furthermore, if there is indeed a freeze on raises, they may be anxious to retain your lapsed salary and might be fine with your leaving. Start looking if you want, but just be smart about it. 60 days is not a long time to keep you hanging, which is good. However, I would be pretty surprised if they are able to give you a raise in 60 days.

There are other forms of compensation besides money, as mentioned upthread.
posted by ml98tu at 6:27 PM on October 30, 2008

over a delayed (not yet denied, just delayed) raise

Unless the raise has been provides, it's denied. A supposed larger raise later rather than an equally theoretical smaller raise now both equal $0.00. By all means stay at the job if you are being paid competitively or the intangibles outweigh the difference in salary - I took a pay cut to go to work at a state job because there were things about the hours and environment that made up for it.

But otherwise do not for one second accept less than you can receive elsewhere or your employer would have to pay your replacement. That's an unreasonable burden to expect you to bear.
posted by phearlez at 7:58 PM on October 30, 2008

I'll just reiterate what some others have said: wait till January. The economy is slow and companies are hunkering down. That letter I got a while back telling me I was bonus eligible? Shredder fodder. Raise? Bwaaahahaha!!! I dodged a bullet on Monday when the downsizing fairy swept through the office whisking about 20% of the personnel off to Unemployment Land. Patience Grasshopper. At least wait and see how things trend after the election.
posted by MikeMc at 8:31 PM on October 30, 2008 [1 favorite]

Honestly, I wouldn't expect a raise within the next YEAR the way things are going right now.
posted by jenfullmoon at 1:43 PM on October 31, 2008

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