The Psychology of Salaries: Do You Want to Know How Much Your Coworkers Make?
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Flickr / wili hybrid Let's face it: our salaries are very important. They define how much our employer thinks we are worth, what we can afford to do in our lives, and even our self worth. I've said it before and I'll say it again: we are what you make.
Our salaries are also a way to measure how our career is going (is it steadily climbing or has it stagnated?) and what kind of future we may or may not have at our jobs.
At my old job, for example, getting a raise was like pulling teeth. Even if you went above and beyond your duties to help the company, it didn't matter a whole lot. Salaries were kept low because that was just the way business was done. To most people there, being underpaid was simply a fact of life. It's one of the reasons I left and the main reason turnover was so high.
So I'm definitely one of those people that thinks you should pay attention to your salary and make sure it reflects how hard (hopefully you're all working hard out there) you're working.
But there's a limit: it's worth it to compare yourself to the people around you.
I Can't Believe He's Making More Than Me!
This is the kind of thing that will drive you insane. Let's say that someone you work with who is at the same level you are drives you nuts. For whatever reason, you see yourself as being WAY smarter, WAY more efficient, and WAY more hardworking than that person.
And then let's say you find out they make just as much as you do. Or—gulp—more than you. It'll drive you crazy if you let it get to you. Here's where you can refer to an old maxim that will help you through a lot of issues in your life (not just at work): Life isn't fair.
Get used to it. The only thing comparing salaries will get you is some tense moments in the office. Maybe you'll feel unconsciously hostile towards some people if you disagree with what they're making. Maybe it'll just wear you down after a tough day at work. Maybe it'll make you bitter. Either way, it won't help you in any way. All it will do is hurt.
After all, there's a reason most employers discourage (or straight up forbid) the discussion of salaries among employees. It's just not healthy.
Worry About What You Can Control
Can you control what your coworkers make? Nope.
Can you walk into your boss's office and say, "I want a raise because X is making this much and I am 15% better than her"? Nope.
Here's what you can control: your own salary. Nothing else.
How? Well, there are lots of ways. But in my mind, the best thing you can do is focus on becoming a better employee. That means doing things like showing up early, helping your boss out, and going beyond the scope of your job.
If you feel you deserve more money, make a rational case for it. Check out Salary.com or Payscale.com to see how you compare to other people doing your job (comparing your salary to averages or to people outside your company is fair game). If you are below the averages, then you may have a case. And if you aren't but still want a raise, force one by showing your boss the great work you're doing.
I don't mean sending emails from home at 10:59pm just to show you're "working," but real, quantifiable work that no one can argue with.
Make it easy for y our boss and for everyone to see that you deserve a raise.
Just stay away from the comparison game. All it will do is frustrate you and make your time at work that much more unpleasant.
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I agree that you shouldn't get upset or obsess about someone else in the office making more than you do. But finding out how your own salary stacks up to your peers is useful data. If you have no idea at all how much your peers make compared to you then you have less advantage in salary negotiations. If everyone makes more than you then you've got a good argument for a raise. If you make more than everyone else then fighting for raises might be harder. Without knowing what your peers make you're flying blind and at a disadvantage.
If you can get anonymous data on salary levels from a website that would be preferable. But you can't always get that info from websites for many employers. So comparing with your coworkers may be the only way.
I've never been hired for a job in which I wasn't specifically instructed NEVER to inquire what others were making. It's a tool that employers use to make sure that they can pay the least amount possible for talent.
I've frequently been shocked to find out that much less qualified people doing the same job as me are getting paid higher. Because I always go ahead and ask, anyway.
@Andrea: Interestingly, that's actually illegal, at least at anything less than upper management level. Pay secrecy laws protect your right to ask, and the rights of anyone that tells you.
As long as you keep a cool head about it, knowing your co-workers salaries can be a great starting point in negotiating for a raise!
Would be awesome.
Penelope Trunk had a great post about this:
http://blog.penelopetrunk.com/2008/07/11/how-to-figure-out-how-much-you-...
If your co-worker get high paid compare to you. What does this mean?
He / she is better then you?
Luck?
He / she manage to win boss heart?
Nor matter what it is; I always believe work hard and work smart are important. Therefore, you should not waste your time and effort to figure out your co-worker pay.
I'm kind of surprised that people would want to know this stuff. Especially Penelope's post. Can you imagine if you made less than someone who is your "peer" and has your exact same title?
And if you went into your boss' office and said "Why don't I make what X is making?" And your boss said, "Because we value her more than you. Sorry, but we want to be open."
Umm, that wouldn't fly. People would leave left and right and office drama would be sky high.
I just don't see how having salary data out in the open could work in the real world. Find out what others make in your industry to get an idea. But in your office? Not a good idea.
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Because I usually work at small companies, I care only about how I'm doing compared to others doing the same work elsewhere. There's always a range, of course, due to differences in industries, but you want to be in that range.
One way to get around the salary disparity problem is to have wage scales and job descriptions that are standard across companies.
I advocate the use of services to find out what salary you should be making. My experience with salaries is that you will always be underpaid relative to what you can be making elsewhere, but its your employer's job to hide this from you. If there is a small difference between your current salary and the potential salary at another firm you are likely to stay because of your familiarity with the firm, your role, people, etc... When the salary difference is great, that's when you will jump ship. Just my thoughts.....
I strongly believe that secret salaries benefit employers, and that if employees were smarter, they would all share their salaries with each other.
I was always willing to share my salary with my coworkers, and was always surprised when they were so uncomfortable sharing theirs. To this day, not one of my coworkers who know what I made has ever shared their salary. They just smile, nod their head, and follow a different train of thought hoping that I won't ask them point-blank what they're making. Maybe it was easier for me to share because I knew I was at the low end of the totem pole, and maybe I'd be acting differently if I was one of the bigger earners at the company.
I believe employers like secret salaries because they have a lot more leverage. In the world of secret salaries, when your boss is negotiating with you for your raise, they only need to give you enough to make you relatively happy. Note that that is totally different from giving you a "fair" salary compared to everyone else.
However, I'm not sure a totally transparent salary structure is the way to go either. If all salaries at a company were known, then the employer would just adjust the budget down for all salaries, and employees would be making less across the board.
So, I'm in favor of transparent salaries between coworkers, but without letting management know that you all know each other's salaries.
I don't know about everyone else, but I think the two main points are these:
Once you figure out those numbers and can make a convincing case to your boss that you deserve that number, you've done all you can do.
Forget about what other people in your company are making...you can't control that.
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I wrote a post about this a while ago: http://baglady.dreamhosters.com/2008/05/08/the-pros-and-cons-of-public-s...
I agree with Greg because employers try to pay people as little as possible. During the dotcom bust a lot of people settled for lower salaries here in the valley, and then when times got better new hires were getting paid way more than them. the employers are able to get away with this due to secret salary information.
Something that needs to be considered is the gender-driven wage gap. It's all well and good to go with the philosophy of life being unfair, but when a man in my industry with the same educational and experience as I have makes 20K more than I do, I think that's crap.
As a government employee I know exactly how much money everyone in my office makes. It does kind of bother me to know that I am held to the same production standards as someone that makes $20K more than me simply because they have been with the agency two years longer, but I guess two years from now, there will be a "the new guy" thinking the same thing about me.
The company I work for discourages sharing, and goes so far as to say it is potentially grounds for disciplinary action. However, knowing doesn't really help an employee very much because there are many dynamics at play. When were they hired? What is their experience level, long-term potential, likelihood of leaving? I managed people getting paid more than me and clearly doing less, but they were hired during times when salaries and bonuses were inflated. I always had the choice to do what they did: leave to increase my salary.
The employees I've managed who ask directly for raises usually aren't as concerned about delivering more value, just about getting more pay. The ones who ask what they need to do to deliver outstanding results or be ready for a promotion, understand it, and then deliver to that plan are the ones who get results.
The REAL trick is to realize that the comparison *does* affect your job satisfaction, and your job satisfaction is about more than just the money you make.
So instead, tell your boss, "If I do a really good job, don't give Billy a raise this year." That'll bring Billy's salary down relative to yours, the boss saves money, and you wind up happier! Everyone wins!
@Andrea: That brings up an interesting question. If you find out a male coworker makes more than you even though you do roughly the same job, and you ask about that. What do you do if you're told "It's because we value X more than you. He works harder for us."
Would you sue or would you believe it? It's an interesting dynamic that same-sex coworkers might never think of. But it's definitely a huge issue. I'd be paranoid if I was a woman.
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I work for a department in my state's government. A few months ago, one of the major newspapers in my state put together a database of ALL state government employees' salaries (available via Public Records Request). From the lowliest custodian to the biggest big wig, they were all there online.
A simple search by name or job title brought me all the information I wanted to know. After about an hour on the site, I closed it down and haven't been back. It turns out that knowing exactly what my co-workers make is much like the forbidden fruit.
I decided that knowing what the woman in the next cubicle made couldn't help my salary and could only hurt my job performance.
If I change jobs in the state, I may go back, but I'm pretty satisfied with my salary, so maybe not.
I tend to think it is great for there to be openness in salaries. While there is a tendency among some people to feel jealous and entitled (which I think is very unhealthy and counterproductive), it does open your eyes to opportunities. For instance, you may learn that the company is willing to pay someone $5,000 more for the position that you fill; if dealt with via an effective perspective, this can become the proper motivation to seek to close the gap on your perceived value to your employer.
I honestly dislike the lack of openness of salaries between employers and employees. Many employers require salary history when applying for a position, but they are unwilling to disclose what they have paid former employees that filled the position. I feel that if they are unwilling to disclose that, then I will not be honest with them about my salary history. I found this to be the case at my last job. I did state that my previous salary was higher than it was, and their offer was based off of my previous salary. I provided a greater value and received a raise well before my regular review. However, I later found out that the person that previously held the position made several thousand dollars more than I made even after my raise, and I was definitely considered to be a greater value than he was, as I had more experience, better education and industry certifications, was more of a people person, and delivered more projects.
I have consistently been a high performer throughout my career, and I have often settled for less than I wanted for my initial salary, but have received substantial raises very quickly; it certainly has always appeared that they have felt guilty for "low balling" me initially. I have been working in my field for ten years, now, and I have more than tripled my salary in that time frame, and I also do substantial side-work that significantly affects my total annual income. What I have learned is that you MUST demonstrate significant value (I typically strive for a value level that is around two levels higher than my position). Then, if this has been done consistently for about two years on the job, you MUST seek employment elsewhere if you are not rewarded for it. Your next job MUST come with a significant salary increase (no less than $5k, if you are below the $100k mark) and you should always strive for increased flexibility and benefits (I have used my vacation time in previous positions to negotiate vacation time beyond standard policy in my previous two positions). Also, leverage your current position to get increased responsibilities in your next position. I have held the same, or similar, title for my past three jobs, but there has always been some increase in responsibilities (be it a a larger scope, or more ownership of your work). I would try to not hold the same or similar title more than twice, however. I have recently tried to get to the next level, and having had the same title for the previous three positions (while having more responsibility and being a larger influence), did hurt my chances.
It would really depend on the co-worker. I'm actually pretty good at figuring out who is a better writer and more valued employee on my own - it's one of the areas where I don't actually have much pride. It's clear to me when people deserve to earn more than me because they are simply better. So if I knew that a male coworker in the same position was making more than me, and I looked at his work and realized that he was simply better, then I wouldn't object.
I know that doesn't sound feasible, but I promise it's true. I once worked at a company where one of my peers make about 15K more than me. He wasn't a very good writer, and had no drive to innovate or improve business processes, but he had been with the company for five years, so I accepted it as something that I couldn't change and it didn't really bother me.
-A
People get brought into the company at different times, so that already may affect someone's starting salary. During the course of someone's employment, so many factors can potentially influence your raises, performance, intra-company politics, the economy, etc. And considering that in the non-perfect world, not everyone is open minded to accept responsibilities for their actions, especially in the work place, would it not create more friction?
You write:
I've said it before and I'll say it again: we are what you make.
Man, what alternate universe do YOU live in?
If we are what we make, then what are the greedy bastards on Wall Street and in the companies who've caused the financial mess this country is in? Successes? Role models? Good citizens? Get real.
If you're Bernie Madoff, who made and embezzled billions.
Oh, they made a lot so they are "somebodies"? Better than the rest of us, including the president of the united states (all of them) who make far less? You can't be serious.
Get a grip. A salary/what you make represents what company X, or person X, is willing to pay you. At a given moment in time, to do X. Some pay more, some pay less--and it's really not about you, especially in companies where salary levels exist. YOU are always the same person. The value is what someone else perceives--and their need versus the supply of individuals offering the same skills and experience. You may be really valuable to company X, who can't seem to find anyone to meet their needs. But you may be a dime a dozen to Company Y, who has tons of "you." So value is relative.
There are plenty of employed and overpaid idiots in companies, running them and otherwise. And plenty of way more talented, creative and skilled folks languishing without jobs. You think those folks are "less than" because they're not getting paid at the moment? Wow. You need to seriously adjust your attitude.
For every under-qualified and overpaid exec in a Fortune 500 company, who led their businesses into the ground and bankruptcy, but who make a lot of money, there are tons of honorable, hardworking citizens who make very little. ALL work has value, and that value is NOT based on what you're paid.
Let's think about all the fabulously competent doctors and nurses, for example, who are paid less than many grossly self-promoting doctors who are unprofessional and incompetent. Lots of those out there. Money does NOT equal better or even BEST. How naive are you?
Money is NOT a true measure of who you are and what you are "worth." That YOU seem to believe that is really sad. For you. And the millions of others you underestimate.
Our value, our worth is not based on what we own, what we have or what we make in terms of remuneration.
Sorry for the tone with you, but I truly cannot believe you're serious in your equation of what you are paid and what you are worth.
If I took your attitude/position, it would be something like: Hey, this guy does what for a living? He writes for a little online blog? Not a big-name branded media company? He must not be worth much.
But I don't think like that.
FYI: I very much agree with your solid advice to:
Just stay away from the comparison game. All it will do is frustrate you and make your time at work that much more unpleasant.
Companies should consider sharing the salary ranges for given positions and the variables that affect them. There should be no reason NOT to be transparent in a professional organization that does not discriminate.
But we all know there are plenty of reasons why companies do not, and never will, share such information.
I'd really love to see productivity and retention studies for companies that share such information and those that do not. Now, that would be interesting.
I definitely want to know what my co-workers are getting paid. Fortunately I'm in the military and we have charts that clearly layout what you make at what rank and after being in for how long.
The only salary one needs to worry about is your own. If you feel unappreciated and underpayed ask for consideration, if that fails-- it is time for a change . . . fire them!
@Guest Sorry, but it's true. I worked at a company that paid everyone very little money, and everyone's self worth was affected by it, whether they knew it or not. A lot of people don't think they deserve to make X amount of money because this is what this employer thinks they're worth.
I went through it too. When I got my new job and they told me how much they were going to pay me, I was shocked. I couldn't believe it. My eyes started to open and realize that I had been vastly underpaid.
The point is salary doesn't determine how much we're "worth," it affects it greatly.
@AraBIC Student: I'd forgotten about the military and their payscales. Interesting angle...I'm trying to picture my workplace with a chart spelling out exactly how much each position makes....it would certainly be different
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I'll use my coworkers' salaries as a data point. Generally, higher salary = better worker. If someone makes more than me, I'll want to know why. This will lead me to examine their work habits and output. They become a positive example. If there's something that I can emulate from a higher-earner, I'm going to do it to better myself.
Corporate Barbarian's method is the embodiment of civility. Permitting puns pardoned, this attitude is rationally impersonal and this approach is straightforward and repeatable.
This is so true... knowing a peer's salary can only lead to trouble... you'll either feel superior or jilted.
I completely agree that you can only control you own salary. But I'd take that one more step and say that you can have even more control over your disposible income.
If you eliminate debt from your life and build a pattern and system of living on less than you make and spending wisely you'll be better off even if your salary isn't tops.
I'd rather know what I'm more financially secure than the guy making twice my salary than anything else... because they comfort and gratitude springs from the inside.
Great topic... thanks for sharing
Dave
While dealing with the counter-offer as I left a job for a (subjectively) better one, the wage of certain co-workers was disclosed to me. People with serious amounts of immersion in the business and much more tenure than I had, were earning significantly less than I was. Needless to say, I was even less inclined to accept a retention offer after learning this! Until that instant, I had assumed that a certain individual was being paid *at least* 50% more than I was, and that automatic annual raises alone should have gotten him there, if merit increases hadn't. Not so. I never looked back after that.