The Telegraph
Since 1st March, 1999
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Resist salary envy

Q: I recently found out that a colleague makes merely $15,000 less than I do, though my job is much more demanding and requires my advanced degree and seven extra years of experience. I try not to let this bug me, but it does. I am trying to focus on increasing my salary via promotion, but because she and I were hired at the same time, I think our boss lumps us together and I won’t get promoted until she can be, too, which is a long way off.

A: Before making assumptions about your chances for promotion, you should try to understand your pay in the larger context of your organisation’s compensation strategy.

It’s not news that many employers cannot compensate their employees as generously as a few years ago. This challenges established pay practices, under which employees expected to be paid a salary that reflected the prevailing market rate for their jobs, an annual pay increase of at least 3 to 4 per cent, and incentive pay commensurate with seniority. As compensation budgets have shrunk, organisations have been forced to rethink how they allocate these dollars. Many have cut or frozen salaries. Many others are pursuing creative approaches to compensation that, despite the economy, allow for significant leverage in recruiting and retaining the best talent.

But the conventional wisdom still seems to gravitate toward narrow pay bands and predictable rewards. By avoiding significant variation in the salaries and bonuses paid to employees in similar positions, employers hope to do a decent job of retaining staff. Organisations that adhere to this philosophy do so, whether consciously or not, because it is patently egalitarian, makes budgeting easier and tends to keep employees focused on their jobs rather than on one another’s pay stubs.

In the minority of organisations, big distinctions are made at hiring and appraisal time based on such factors as experience, education and, most of all, performance. Organisations that make those distinctions believe in rewarding achievement and working aggressively to get rid of employees who do not measure up. They believe that a bit of the salary envy that you are experiencing is actually a useful performance-enhancement tool.

If your organisation would promote two employees in lockstep merely because they were hired around the same time, then my guess is that its payroll does not reflect distinctions in experience, education and performance. This does not necessarily mean that your boss does not understand the differences between you and your co-worker.

If you want to get promoted, your challenge will be to get your supervisor and your organisation to think about you more as an important individual contributor instead of as a function. Rather than focusing on what your coworker earns, focus on what you have accomplished. It is not enough to say that your education and experience ought to command a certain salary. You need to make a compelling case that you will be of even greater value to the organisation if you are given greater responsibility, with a corresponding increase in pay. Approach your boss with big ideas for how you could fit into the organisation’s longer-term plans, and ask for guidance on how to be promoted. If you can generate enthusiasm for your career plans, then your boss will become a valuable ally, which is just what you will need if your organisation is indeed hesitant to single out employees for promotion ahead of their peers.

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