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[BUSINESS] Salary Secrets and Myths

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  • madchinaman
    Secret 1: Your pay doesn t necessarily reflect performance and seniority http://money.cnn.com/popups/2006/pf/salary_secrets/index.html - MBA GRAD PAY
    Message 1 of 1 , Jan 1 4:28 AM
      Secret 1: Your pay doesn't necessarily reflect performance and
      seniority
      http://money.cnn.com/popups/2006/pf/salary_secrets/index.html

      -

      MBA GRAD PAY EXPECTATIONS:
      What a difference a year makes
      First job after graduation
      2006 $ // 2005 $
      All students 88,087 // 81,658
      Women 86,805 // 81,962
      Men 94,710 // 89,933
      5 years after graduation
      2006 $ // 2005 $
      All students 167,052 // 156,753
      Women 156,290 // 155,909
      Men 191,541 // 184,352

      -


      While fair and equitable pay may be your company's aim, the goal post
      keeps shifting.

      Managers will pay what the market demands to get the right candidate.
      So in a tight job market the starting salary of a new hire at your
      level may come close to or even match yours, despite your seniority
      and institutional knowledge.

      Some companies are proactive about performing an equity analysis on a
      regular basis and correcting for the problem. If they discover that
      the gap between your pay and the newer hires isn't wide enough, they
      may give you a larger bump in salary than the usual merit increase.

      But many are not proactive and won't take action unless they get a
      complaint from old faithful.

      What you should do: Keep abreast of the going rate for people with
      your experience and education, especially if you were hired in a down
      market.

      If you notice a discrepancy, said Dallas-based compensation
      consultant Rebecca Elkins, tell your boss, "I'm aware of this and am
      wondering what can be done to bring me up to market?"

      -

      Secret 2: There's more raise where that came from
      When it comes to merit increases, your boss has discretion about how
      much she gives you, so long as the average raise she gives doesn't
      exceed a certain target, say 3.5 percent. So she might award the top
      performer 5 percent, but below-average employees only 2 percent.

      But there might be more money available than your manager lets on.

      Smart companies "always have a little something in their back
      pocket ... to use when they need it - say to keep an employee they
      can't afford to lose," said Dallas-based compensation consultant
      Rebecca Elkins.

      Say you fit that category, and you request an 8 percent raise when
      the company typically has offered you 4.5 percent.

      Smart managers would ask themselves, "Am I willing to lose this
      person for $500 a month?" Minneapolis-based compensation consultant
      Jim Fox said. "If they're concerned about losing you, that extra
      money is minuscule, pennies compared to what it will cost to replace
      you."

      What you should do: The day of your review is not the time to
      negotiate a higher raise since your manager has already gotten
      approval for the increase he's budgeted. Your campaigning should
      start months before. "You have to sell yourself all year round. Don't
      be shy about telling your manager, 'Hey, I did this,'" Elkins said.

      -

      Secret 2: There's more raise where that came from
      When it comes to merit increases, your boss has discretion about how
      much she gives you, so long as the average raise she gives doesn't
      exceed a certain target, say 3.5 percent. So she might award the top
      performer 5 percent, but below-average employees only 2 percent.

      But there might be more money available than your manager lets on.

      Smart companies "always have a little something in their back
      pocket ... to use when they need it - say to keep an employee they
      can't afford to lose," said Dallas-based compensation consultant
      Rebecca Elkins.

      Say you fit that category, and you request an 8 percent raise when
      the company typically has offered you 4.5 percent.

      Smart managers would ask themselves, "Am I willing to lose this
      person for $500 a month?" Minneapolis-based compensation consultant
      Jim Fox said. "If they're concerned about losing you, that extra
      money is minuscule, pennies compared to what it will cost to replace
      you."

      What you should do: The day of your review is not the time to
      negotiate a higher raise since your manager has already gotten
      approval for the increase he's budgeted. Your campaigning should
      start months before. "You have to sell yourself all year round. Don't
      be shy about telling your manager, 'Hey, I did this,'" Elkins said.

      -

      Secret 3: When you're told they can't pay you more now, budget may
      not be the issue
      If you ask for more money and your boss says the budget is too tight
      now -- ask him what it will take for you to reach your desired pay
      level, said Minneapolis-based compensation consultant Jim Fox.

      If you don't get a clear or encouraging answer, it could mean one of
      several things:

      Your boss doesn't think you're worth that much money in your current
      position.

      He doesn't have the authority to make that decision or doesn't want
      to take on the challenge of getting you up to the next pay level.
      Or, you're already paid at the top of the company's scale for your
      position.

      What you should do: Consider whether you want to continue working in
      that position at that company, Fox said.

      -

      Myth 1: Your pay is all about you
      Thanks to a fear of lawsuits and dissension in the ranks, companies
      usually employ a systematic process, complete with outside paid
      consultants, to determine compensation.

      Typically, however, companies don't do a good job communicating to
      employees how they arrive at pay decisions. But they should, and if
      yours doesn't, don't be afraid to ask. "It's only fair to say 'can I
      have the basic facts,'" said Dallas-based compensation consultant
      Rebecca Elkins.

      What you should do: Ask what salary surveys they use to assess the
      going rate for your position and which competitors' pay scales they
      use as a point of comparison.

      Salary surveys that companies use may not be available to
      individuals. But Salary.com now aggregates findings from a number of
      those surveys, updates its numbers regularly and offers both general
      and customized salary reports for your job based on where you live,
      your tenure and other specific factors. The customized reports cost
      between $29 and $79.

      Another, more expensive option at $200 is a quick-call salary report
      from the Economic Research Institute, which also aggregates the
      findings from a number of salary surveys.

      -

      Myth 2: Bosses pay more if they like you
      Bosses definitely like some employees more than others -- sometimes a
      lot more. So it's easy to assume your manager sweetens the pot for
      his faves.

      That's entirely possible, but chances are it's not because he's
      playing favorites, said Minneapolis-based compensation consultant Jim
      Fox. Chances are the employees he likes the most are also the ones
      who make his job easy and who make him look good to his managers.

      -

      Myth 3: You can't negotiate severance
      Unless you have a contract saying otherwise, companies that lay you
      off aren't legally required to provide you with severance. Typically,
      though, they will offer something. The question is whether it's
      enough given your tenure and contributions.

      If you don't think it is, you may be able to negotiate a better
      package if you have some points of leverage. A key one is what New
      York-based compensation attorney Alan Sklover calls "pipeline value."
      That is, are you the only person at the company familiar with
      important details of a current project or who knows how to perform a
      critical function for the employer?

      In other words, do they still need something from you?

      What you should do: When making your request, keep in mind, you're
      negotiating with individuals, not "the company," Sklover said. And
      those individuals have things to lose, including their bonuses or
      jobs, if negotiations with you don't go well.

      The best way to make your request: Respectfully, in writing, to
      someone in a position to give you more severance -- i.e., not HR. You
      might start with your manager, or your manager's manager.

      Sklover also has recommended clients send their letters directly to
      the board of directors if they have a legitimate claim and those
      lower down on the totem pole aren't persuaded.

      =========

      Quiz Take the quiz

      Do you deserve a raise? Before asking, know your strengths and
      weaknesses. This quiz is adapted from Are You Paid What You're
      Worth?: The Complete Guide to Negotiating the Salary, Benefits, Bonus
      and Raise You Deserve, by Michael O'Malley (Broadway Books, $15).

      1. If you left the company, how easy or hard would it be for the
      company to replace you?

      Easy Hard
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