Salary discussion with manager and his counter argument that I am well paid

Question

I know that in a salary discussions, I need to make the points about the value I provide to the company and not to compare myself to what other employees make.

But what can I do if my manager does exactly this and tells me that "compared to other employees, your salary is high at the moment". I have no way to verify this, as our contracts prohibit talking about our salaries.

Does the manager have a good point? I feel uncomfortable with him giving an argument on a basis that I can't check. This question is not about having good arguments for a raise or a promotion: it's about countering this specific argument.

Answer 1

Honestly, I don't think it should matter what the other employees make. Salary (or, total compensation) is about what the company finds valuable about an individual's contributions.

If your manager is saying he won't pay you more (or otherwise increase your total compensation, ie bonuses, vacation days, benefits, etc) because of X, where X isn't your individual contribution, you need to just redirect and make it about your individual contribution. All other X's are just decoys and distractions (perhaps unintentionally on your manager's part, to be fair).

Think of it this way. Every time he gives you a sentence as an attempt to justify your salary, take out his reason and stick "for your skill set and contribution" into the sentence, because that's exactly what he's implying:

1. "We don't have the budget to pay you Y" becomes "We don't value your skill set and contribution highly enough to adjust the budget in order to pay you Y."
2. "Your coworkers only make Y" becomes "We don't think your skill set and contribution is any more valuable than your coworkers, who (fairly) make Y"
3. "You don't have enough years here to make Y" becomes "We don't value (or don't know well enough) your skill set and contribution in order to pay you Y"
4. "The market doesn't value your type of job at Y" becomes "We don't know the labor market well enough or have mis-assigned your skill set and contribution and will only pay you Y"

You should get the picture by now. The way you counter this, as @Daniel indicated, is to redirect to - you guessed it - a discussion about your skill set and your contribution to the company.

To circle back to your specific question, you asked:

I feel uncomfortable with him giving an argument on a base that I cannot check

My point is this: Don't get hung up on his arguments because they don't matter. You should not accept a salary because that's what your coworker's make. You should accept the salary because YOU think it's fair for YOUR contribution to the company.

If you continue to get nowhere, you need to face the facts - one of the following is true:

1. Your skills really aren't worth what you're asking for.
2. Your skills are more valuable, but the employer can't or won't compensate you for them.

Regardless of which is true, you really have two choices: Accept the fact that you won't make more and stay put, or look for another job (and hope you're right about your value, so you don't end up stuck again).

Answer 2

You counter that with:

Well, I have no information about that. What counts for me is the opportunity costs, i.e. what I could make on other engagements. I love my work and I love this company, but unfortunately I can't afford to lose money just to work here. So can we please concentrate about the value I have to offer?

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By the way, German law supersedes any contract you might have so you can talk to your colleagues about salary. Reference in German: Was das Arbeitsrecht zur Schweigepflicht beim Gehalt sagt

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Edit because of comments: Regardless of economics, which I'd be happy to discuss in another place, I found this approach useful to focus the negotiation on what matters: What you want and what your employer has to offer!

It's always possible that you can't come to a mutually beneficial agreement and that's ok - time to leave. But at least it counters the usual bs like but your colleagues ... or I wish to pay you X but we currently can't afford to ... etc.

Also, for people interested in a lot of theory behind salary negotiation, I found this very interesting paper.

Answer 3

I'll translate what your boss said into English for you: "I don't want to pay you more than you get today". So what his argument is is totally irrelevant, what's relevant is that he doesn't want to pay more.

What you want to say in plain English is "You need to pay me more", and you need to translate this into the language of your manager. For example "I don't really care how much others make; I know I'm doing a good job here, and you know it too, and that needs to be reflected in the salary".

Whether this has any success depends on how strong the manager's wish is to not pay more, and how strong his wish to keep you working. What works to your advantage is that the money doesn't come out of your manager's pocket. $10,000 in your pocket doesn't take $10,000 out of his pocket. But losing you will impact his ability to deliver things and damage his reputation.

Anyway, if there are no results then you look for a new job, and a new job should always offer more money. When you succeed, remember the rule: Never take a counter offer. Once you signed a new offer, you can of course try to find out how much more you would have been worth.

Answer 4

It never ceases to amaze me how many people have bought into - and truly believe - this concept that to get paid more, you have to work hard, go beyond the call of duty and perform additional duties and value to a company - which will then translate into more money.

Ie Money == your contribution.

This is not even slightly true and it is this delusion and lie that keeps people in line and companies in the driving seat with all the power. They know you want more money and they know you believe this adage. So all they have to do is sit back, do nothing and let you work yourself to the bone, trying to "deserve" and "earn" a promotion and raise.

When the time comes to have the dicussion, they will just say there's no spare money or you are well paid compared to your peers, knowing you won't be able to ask them - as that's impolite.

Bottom line is this.

A company will pay you the minimum they need to, in order to retain you.

Unless you are fortunate and work for some passionate entrepreneur who believes in dogs-at-work days and "everyone being an equal owner of the company", ie 0.00001% of jobs, then companies exist for one reason. To make profit for shareholders and directors. Staff costs are the highest single expense for a company and you can be sure they do everything possible to keep that down.

Companies simply do not give you a raise because you earned it - though that's what everyone seems to believe. They give you a raise for one reason, when they need something from you.

Why would you do extra work before you get paid for it? Does an electrician come to your house, rewire your house (even though you've asked him just to install a wall socket) and then try and convince you to pay him $5000 because he earned it and worked hard? Slaving yourself all year and then going begging to your manager for more money comes across desperate and weak.

Instead you have a few options

1) See an opportunity in the company. A role you can step up into, take ownership of and deliver some new higher value than what you are doing now. It needs to be a significant step up from what you are doing now, will bring more revenue for the company and be a higher profile role. Speak to your manager and tell him you have seen an opportunity and would like the chance to take the lead with it. Explain the added value and revenue you will bring, why you are the right person to take the lead on this and then say to take on the additional responsibility and role, you would like a salary increase of X amount. Then they can say yes or no. If they say no, you don't have to do the work and the company get no revenue or added value. Their loss. But not yours. If they say yes, you have the agreed amount you asked for up front, and you can then step up into a new higher role, that will then be on your CV and help you get better roles going forwards.

2) If you are highly needed by your company, you can bluff. Find a new job, interview for higher paid jobs and get an offer in the hand. Go to your current manager and explain you are handing your notice in as you have an offer elsewhere. If they really do want to retain you, they will ask how much you have been offered and will offer to match or beat it to keep you. If you accept, you keep doing what you have always done, no need to work yourself to the bone trying to earn a raise, just do your day to day job. But you will get the increase if you are needed by the company. And if they don't, oh well, you have a higher paid job elsewhere to move to.

Both of the above methods, YOU stay in power, not the company.

Trust me, I have done this countless times over my career and it works every time.

Answer 5

I was told exactly the same thing, and whatever you reply to his remark is actually irrelevant. Most likely (like 99%) you are not going to get the raise after such his reply.

If you want to get a higher pay, you need to change the job: either in the same company by asking for more responsibilities, or in another company.

Answer 6

Simple - you don't compare your salary to the other employees in your organization, you compare it to the median salary of your occupation.

Tools for comparing average salaries are easy to find ( https://www.payscale.com/research/DE/Country=Germany/Salary ) and much better for comparing what you should be getting paid than a comparison of your co-workers. After all, if everyone is getting paid too little, it won't matter if you're better paid than they are.

Keep in mind - this is your total salary, so make sure you compare the numbers accordingly.

Answer 7

I feel that you need to make your manager understand that you are not worried about how much other employees get as that is decided by the company and you have no say in that. But, you should emphasize the salary issue in some other sense, for example, talk about the skills you have and the prevailing market rate for an employee with similar skills and designation. These are the facts that you can put in front of him rather than the contracts, which you do not have access to. You will have to do some research from your side to obtain these facts.

But, if the manager still talks about the contracts and says that you are being paid more than your fellow colleagues, then I don't think you can do much. If you want to stay at the current workplace, then you will have to work at the rate they are offering you (at least for now). You can ask for a hike after 6 months. In fact, ask the manager if there is a possibility of a hike after 6 months/1 year. If he says no, ask him if a clause can be added to your contract regarding hike.

On the other hand, if you still feel that you are underpaid, I would suggest looking for another place to work would be the best possible solution.

Answer 8

I've heard this so many times from so many different employers that I've come to believe that either I am incredibly overpaid, all the time (then why do they hire me for that salary, I wonder?) or they are probably telling that to at least half the people.

Actually, depending on which average exactly (arithmetic, median, etc.) they take, half of the people are above the average, by definition.

In other words: It's a bullshit argument used when they do not have any real arguments. It should be treated like that:

And what?

Maybe in slightly more elaborate terms, but you get the idea.

There is a simple reason they constantly use this: A manager does check what in german is called "Gehaltsgefüge" - the structure of salaries. They are very often told from above to level that. Which always means getting the higher paid people down or at least not raise them, instead of raising the lower paid people up.

Since average pay raises in Germany have been in the low single digits for a decade, if you submit to that argument, you'll spend many years without a raise, while costs of living go up.

There are two ways to counter that argument. I've only ever used the first: Ignore it. I've always just ignored it and commented on whatever else they said, and interestingly, nobody has ever tried to seriously discuss this point with me. I guess they know by themselves on which thin ice they are standing.

The other is to confront it. I've kept this in reserve for when/if someone tries to make it stick:

My co-workers do good jobs. I understand from your words that they are underpaid. That certainly is something that needs to be addressed, but as you pointed out, it has little to do with me. According to the head hunter who called me last week, my current market value is around X. At this company, I am currently being paid less. Which solution do you offer?

If you have the numbers, you can also point out the value you generate, but I wouldn't do that without solid numbers - your boss will almost certainly have more and more precise numbers on this and if he is prepared, he can beat you at that game.

You can also be a little less aggressive, especially if you don't know your current market value or it actually is below your current salary:

You hired me for this salary, so obviously at that time you were sure that you are making a good business decision. Why do you belittle your own decision?

If you are in a good mood or want to be non-confrontational, you can also appeal to reason, though I think that's a waste of breath on a person starting out with the lamest argument in the book. But if you want, try something like this:

You hired me for this salary, so obviously at that time you were sure that you are making a good business decision, and so was I. As prices are increasing constantly, it is only natural that salaries should increase at least at the same rate, otherwise you would effectively reduce my salary. Do you have a reason for that?

Answer 9

This question is not about having good arguments for a raise or a promotion: it's about countering a specific argument.

Sorry, if this doesn't exactly answer that question, but to me, this is a moot point. You certainly shouldn't argue this point to your boss unless you want to use it as a basis for a raise. Otherwise, you're just getting on his bad side for nothing.

I agree

I need to make the points about the value I provide to the company

but that doesn't mean this is your only area of argument and comparison.

and not to compare myself to what is happening with other employees.

I don't agree with this. One factor the company uses to pay salaries should be contingent on: how much they make, how much do you contribute. If you can support a certain percentage of how much is made is based on your contribution, it is not defensible for a company to pay other people more than what they offer. Market factors can influence this and there is only so low they can go, but a good business should reconsider if they're hiring too qualified of people to do a task at an unprofitable rate. They risk not being able to pay those who are contributing more.

You don't know what everyone is making and that is the problem with how I'm suggesting the way things "should" be. Your boss has no data to show you, so you have to take his word. Not that you need to know exactly what everyone is getting, but at least some metric on everyone's proportion.

There could be some people who took more risk in their salary negotiation and chose a lower base salary for more potential bonus. Years the company does well, their total compensation may be closer to yours because you took a larger base salary and didn't risk getting a potentially higher bonus. You'll do better in slower years. My guess is, your company doesn't do anything like this or they would be more upfront about it.

Now it is just a matter of how much you trust him and/or the company. Either they're doing what it takes to keep you or they're not. Salary is just one part.

Answer 10

I know that in a salary discussions, I need to make the points about the value I provide to the company and not to compare myself to what is happening with other employees.

Making people aware of your value is important, but ultimately it is a comparison of yourself to others on a single point; and much like a MPG, km/L or L/100 km comparison of motor vehicles - is that the only reason to buy a particular car?

Maintenance is important (they ought to maintain wage and bonus with both the cost of living and what other companies are prepared to pay, not how little your co-workers are prepared to accept).

But what can I do if my manager does exactly this and tells me that "compared to other employees, your salary is high at the moment". I have no way to verify this, as our contracts prohibit talking about the amount of our wage.

In reality you have no way to compare unless you actually see their paystub and job-shadow them for a period of time. If the manager doesn't know you should get more and you know you should then someone's mistaken; if you improve your future there or elsewhere it won't be your mistake, if the company won't budge on that you won't advance (in the company or your life, becoming richer for your efforts).

Many times I've been somewhere inquiring about employment and got the chance to briefly question a random person walking by about working at the company: The worst case was the reply "It's a job" (but the pay was not awful), and the best answer was "We make good money here" (when in fact they hadn't been paid for months), or vice versa.

There's some very distorted reasoning about what makes for good value.

Does the manager have a good point?

I think that the manager's point is "you're not getting any more money" obviously that's no good for you.

I've worked at places where the manager has gone to visit the owner every week, for months, to plead with the owner to fire someone whom was damaging equipment and bringing the work to a halt - every day two others would have to work half their shift to undo the idiot's mess and put things right - there was simply no way, no chance, that the owner would fire the person, they kept their job for years. But other people would ask for a well deserved raise and not receive it, unsatisfied that they were paying to keep a few unproductive people employed they quit; and the owner was only too happy to see them go. The owner simply thought backwards.

The way some people perceive value is a mystery sometimes.

• What is important to you:

  Can you eat and pay your bills.

  Can you walk across the street and earn significantly more.

If you don't have any recourse then you don't want to be too vocal until you have another offer locked up. If you've been there a while and ought to have brought up bonuses or a raise sooner (or they ought to have offered you one) it's in your interests to be the one to keep track of that - it's rare for a company to say "we don't pay you nearly enough, here's a big raise".

Don't accept the excuse that the company isn't run profitably or that others work for too little without complaint, unless that's your fault - get what you can get, there or elsewhere.

I've found that you actually have to have one foot out the door before they realize it's not the cost of keeping you, it's the cost of you leaving.

Compare how many times you've had to ask for more with how much practice the manager has had with telling people "no" - see: he has more work experience than you.

If you are being taken advantage of and getting poor excuses then polish up your resume, interview elsewhere discreetly (don't tell them where you work), and lock in a better offer (or even an equal one with less travel time, or easier work, better advancement opportunities, etc.).

The puny chance that the company has no more money for a great employee is slim, the better chance (and the manager knows it) is that people will stay for too little far too long, and as long as they think you're replaceable there's no more money for you.

Replace your employer with a better one, someone who values your work and respects your 'proof of value statement' that clearly outlined how you've benefitted the company. If they're doing you a big favor your job is in jeopardy, and you will need to look elsewhere either way.

You know how to do your research (search here or elsewhere for "how do I know ..." or "how should I ..."), as long as you can go somewhere else (and your resume doesn't show a history of job hopping), just go. Don't accept that weak excuse when you have better options.

Answer 11

I had a similar conversation a few times myself. And like some people here said, the argument is totally irrelevant. It's like this: You want to make more money for your work; Your employer doesn't was to pay you any more. He's trying to keep his costs to a minimum.

The best way to prove him wrong, and solve your desire for higher pay is to look for another job. As soon as you get a higher offer from another employer, his argument is not relevant. In that case, I would also take the new offer and not agree to a counter-offer. If he didn't value you up until now it's not likely to change.