Tag

money

Career Advice

5 Ways To Talk With Your Boss About Money

My Inc post today

For
most people, it’s not easy to talk about money. It can be difficult,
nerve-racking and even fear-inducing. However, being able to talk about
money will directly influence how much you make and the opportunities
you get. We don’t (yet) live in a world where your pay is solely based
on your competency; which means you have to be assertive and find
positive, constructive ways to engage in a discussion with your boss.
For those of you who are uncomfortable with the subject of compensation,
here are five non-confrontational ways to talk with your boss about how
much money you make and ways you can make more:

Check your bonus

Once
you get into management most companies provide some level of variable
component to your pay. It may be based on your performance (such as
MBOs), the company’s performance or both. Nevertheless, bonuses are
typically set as a percentage of your base pay.
It is entirely
reasonable for you to ask about the bonus percentages for different jobs
at your company: What percentage does a manager get? A director? A
project lead? Are the bonuses consistently applied by level or are there
ways to earn a higher bonus percentage? Asking these questions will
give you an understanding of the levels you have available to increase
your variable pay. Additionally, asking these questions allows you to
understand if your variable is set fairly relative to your peers, and it
puts your manager on notice that you are paying attention.

Ask early

Some
people put their hand up for a bigger job before they are ready. Some
wait until they are more than ready. Guess who gets ahead faster?
Building
your confidence to raise your hand early and ask for a bigger
responsibility before you are perfectly ready makes you more valuable to
your company. As a leader, it’s great to have team members who will
jump on challenges and volunteer, even if they are a stretch. Stretching
yourself and taking risk will lead to you more opportunities and you’ll
be rewarded earlier and more often than your peers who hang back.
Asking you manager for more challenging projects and for promotion
opportunities will naturally lead you into a discussion about your pay
and how you can grow it.

Understand the bias in the system

The
debate continues to rage about the pay gap between men and women (women
make 78 cents for every dollar a man makes, in full time work) and a
recent study shows the gender pay gap is even greater when it comes to incentive pay.
It’s
such an active discussion that if you are in a minority (or even if you
are not) it is OK to ask about the company’s approach to understanding
and correcting gender or racial bias in their pay practices. Ask if they
have run an audit on pay differences and if they have a plan of action
to correct any existing gaps (which you can be sure exists).
Some
companies, like GoDaddy and Salesforce, say they are aggressively going
after this issue and plan to remove the gender-based pay gap over the
next few years. It’s a fair conversation for you to have with your boss
and HR, provided you stay positive and don’t play the victim.

Negotiate positively

“You
get what you negotiate, not what you deserve.” This is the motivation
behind the thousands of self-help books and classes on negotiation, and
it’s true. That said, when it comes to your pay, it really helps to come
from a positive perspective.
Approach your conversation with your
manager from a perspective that you know you are contributing but you
want to contribute more and in doing so, make more money. Let her know
you want to negotiate, but don’t focus on how you are paid relative to
others, instead focus on your impact and ways you can advance the
company as well as your own career. Asking for more responsibility
naturally leads to more pay over time.

Pick your timing

Timing
is everything. Be smart about when you open up the conversation. Don’t
do it when your boss is about to go on vacation. Don’t do it when she is
slammed with preparing a presentation to the board. Don’t do it around
quarter end or a project deadline. Find a time when your boss can listen
with both ears, when you can bring up your questions in a relaxed
atmosphere, and then go for it!

Career Advice

Money is NOT the motivator

It’s a common misconception that people are motivated by money, especially when talking about entrepreneurs. Make millions from your stock options!! Drive a porche!! Buy an expensive house in Palo Alto!! But for the 99%, money is an outcome of their hard work, not the reason they work hard.

For sales people, it’s all about winning. I’ve seen sales people compete harder to be visibly #1 and win a $100 Starbucks card than invisibly earn a $10k bonus. Yes, sales people are coin operated – you have to pay them for their performance in a pretty linear way, but the motivation comes from the hunt and the kill — winning and being #1.

For engineers, it’s all about their technology being used and staying current. Nothing is more motivating to an engineer than seeing their work in the hands of hundreds, or thousands, or millions of people. Nothing is more demotivating for most engineers than working in an ivory tower. They want to work with smart people more than be known to be smart. They want to be working on the latest technology, apply it to interesting problems and create cool products. That’s why they’ll work all night, not because of stock options.

Even the blood-sucking lawyers (I say that with all affection) working in a
partnership, charging their clients hundreds or thousands of dollars an
hour, care more about how they are paid relative to their partners than
how much they actually make, once they’re making a lot.

However, it’s not that money is unimportant. It’s that the lack of it is a demotivator, not the reverse.

The base level problem is whether there’s enough. If someone is not making enough money to support their chosen lifestyle you’re going to have a problem. Worrying about making ends meet can be hugely distracting away from doing the job. You’re not responsible if you have someone on your team whose expenses are higher than the job pays, but you will have to deal with the problem eventually, even if the problem you have to solve is fill the job when the person leaves. You need to know so you can help through advancement, if possible.

But once people are making enough, the key issue is fairness. Everyone wants to be treated fairly relative to other people doing similar work in your company or similar companies. If everyone’s pay was openly posted, would it make sense? would it feel fair?

I don’t advocate posting pay, because the sheer process of everyone absorbing it and explaining it is distracting, but you need to act as if. Just like you should never send an email you would not want on the front page of the New York Times, when you look at the pay of your team, you need to see that it’s fair, or if it’s not (which sometimes happens for odd, historical reasons) you should have a plan to continuously move it to be fair. And it is a continuous process because the team, and everyone’s jobs, continuously change.

Your HR team will talk about Pay for Performance. This means steer pay people to who are performing, steer it away from people who are not. But in the end remember that pay doesn’t motivate. For every one of your employees you have to figure out what motivates them first, and then make sure their pay is fair.