Thursday, 14 January 2010

Pay cuts, pay rises

Here's a question for you. A personal, moral question.

Without reference to your colleagues or managers, would you accept a pay cut in return for the lowest paid staff at your company getting a pay rise?

Answer in comments below, cheers.

1 comment:

  1. Of course I wouldn't do so of my own accord. People generally are very close to the wage they merit. (Unless perhaps if they are working for minimum wage in a job where it is difficult to measure productivity, and with no promotion prospects). If they weren't, they'd be working somewhere else.

    However, as a company director who participates in remuneration reviews for everyone in the company, I have decided on several occasions to increase the pay rise or bonus pots for the lowest paid employees to the detriment of higher paid employees like myself.

    In my experience lower level job relative pay rises are based on

    1) How underpaid are you in the first place, compared to people in the same company or the wider market. People are generally underpaid either because they have developed during the last year, or because they were prepared to be hired at a lower wage than they merit either because of poor confidence, or unimpressive credentials.

    2) How likely, given the job market and your performance/work satisfaction is it that you'll leave/perform badly if you don't feel the love. And do we want to keep you?

    If you are the lowest paid person in the company (and not the most recently hired person in a similar role) you shouldn't expect that to last beyond the next pay review. If it does, and persists for another year, you should probably be looking for another role.

    (The above only applies for semi-skilled or skilled private sector jobs, that are not industrial or extremely repetitive in nature)