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I am an electronics engineer in a medium size company (50 people) specialized in precision measurements. I work on the development of a very cool product: innovative and with good potential.

The way the product is developed so far is very expensive, production cost would be around 15000€ per unit. I have thought of another architecture solution to reduce that cost to 1000€. Reducing production cost by a factor of 15 is a very significant contribution.

My solution could be described in 4 of 5 patents and would open markets leading to tens of millions of $/€ of added revenue because the product would be more affordable and easier to adapt to other applications.

I am much younger than my superiors, I have been in this company for a bit less than a year. I generally happily share my advice and contribute to the development of the product. In part thanks to the signal processing I have implemented, the technology has reached performance never seen in the company before. I have already made several contributions including one which has been patented. I have badly negotiated my salary at my hiring because it is my first job in a private company (I was a postdoc in academia before). I now feel I am underpaid for my skills.

I haven't told my new idea to my superiors yet as I feel I could leverage it in a salary negotiation. If I naively give away my solution, they probably won't even think of giving me a raise.

Is a doubling of my salary reasonable to ask? That would still be far less than 1% of the revenue generated from this contribution, and still be inferior to my bosses' salaries.

How should I manage this negotiation? Should I :

  • Describe the potential of my solution to my superiors and withhold the technical description until they commit to raise my salary in the eventuality that the solution works and is implemented?
  • Start by detailing the solution with no strings attached, then approach my superiors to ask for a raise?
  • Approach my superiors to ask for a raise stating that I have thought of a great solution, then detail the solution?
  • Discuss the solution with other colleagues and involve them completely so we commonly ask that we all get a raise for this solution ?
  • Involve my technical superior to help me negotiate a raise with the business/HR superior?
  • Ask for royalties on the future patent even though it would belong to the company (not common practice as it is not intended by the law)?

I love my job, the atmosphere in the team and relations with my superiors. I don't want to compromise all these good aspects. I would be glad to see the company succeed with the implementation of my solution. It's just that I fear to be frustrated from not getting paid enough in comparison to the contribution that my solution represents.

What is the correct approach to leverage a technical solution idea for a proportional raise ?

10 Answers 10

89

You get pay raises based on your past performance, not on your potential future performance. You don't know for sure if your idea will achieve a certain outcome.

Good performance is not just having genius breakthrough ideas. An employee that has great ideas but withholds them from others for glory/reward is not valuable to a company. What is valuable is sharing your ideas and being able to work together with your team to achieve those positive outcomes. These employees get raises.

I would recommend scheduling a discussion about your performance/salary asap. Demonstrate the value you have already brought the company and ask for a raise based on this. Then ask them what you need to do to achieve a raise in the future. Make sure this is documented somewhere afterwards e.g. in an email or letter.

Also share your idea asap! Work with your team to get that production cost down, and keep a good record of all the work you did as an individual for your next performance review.

Another thing you could look into is if your company can give stock options.

If they still don't pay you enough, don't stay there. Think about how impressive you will sound in your next job interview having achieved so much for your current company.

  • 12
    @Tétef asking to take charge in the development of a project as someone who has only one year of experience out of school might not fly all that well. In many fields, there are skills necessary to run projects that go beyond the kind of breakthroughs you're describing here. – Ben Barden Mar 8 at 14:26
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    I agree with the answer but not about salary negotiation asap. That should happen whenever your performance review are due and not every time YOU THINK you have a great idea. – PagMax Mar 8 at 14:40
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    It reminds me people who say "I'm not paid enough to do something like this.". This is not the reality of work market. You have to give yourself 110%, then hope to be fairly rewarded. If you are disappointed, go work somewhere else where your abilities will be valorized. – Alex L Mar 8 at 14:51
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    @Ben Barden There is a difference between doing a job and revolutionizing it. Workers should see the benefits of their labor especially when that is out of scope with the normal duty parameters. – NDEthos Mar 8 at 17:19
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    @AlexL Why on earth would you work under the "hope to be fairly rewarded?" Do you not know what you'll be paid in advance? I hope there's a huge potential upside for you if you don't know what you'll be paid. If you aren't receiving the pay that your value and performance deserve, and you don't want the risk of all your effort not paying off, then ask for the right pay, and change your job if that won't work. – CodeSeeker Mar 11 at 5:34
89

Being blunt here: If you'd come to me and say "Hey, I have a great idea that can save us tons of money, but I need to see some cash before I will talk about it", I'd fire you on the spot. This feels like blackmail to me and I won't have it regardless of how much money is at stake.

However if you show with a detailed record of your achievements: "Hey boss, look at all the cool stuff I've done and the money I saved for the company. I think I provide way more value that my current compensation represents", I'd be more than happy to have constructive discussion around that.

All of that depends of course on local laws and personalities involved, but threatening to withhold the idea in order to force something can backfire badly.

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    I'm sure a lot of companies would not only fire OP, but also sue them. You can't develop something as part of your job and then withhold it; the company owns that IP. Even if it exists purely in OP's head and they hold onto it for a while after quitting and then apply for the patent, they run the risk of the company discovering it and realizing what happened. – Matthew Read Mar 8 at 17:12
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    "the company owns that IP. Even if it exists purely in OP's head". right... – dan-klasson Mar 9 at 13:15
  • " but also sue them." - Good luck proving anything based on the hearsay... – rkeet Mar 9 at 14:35
  • Keep in mind OP is not in America, it doesn't work that way over here (Especially west EU). – Mathijs Mar 11 at 11:27
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    @MathijsSegers: of course you can't fire people in Europe as easily as in the US, but the concept of "career ending move" exists just as well, it's just executed differently. – Hilmar Mar 12 at 14:55
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Look into your employers handbook and into national law. There are laws regarding inventions and how they should be remunerated (at least in Germany, but I guess this is true for many countries). Important: There are countries where you are legally obliged to inform your employer about an invention!!

This is the French law, as you wrote in a comment about being french.

In Germany, you would file an invention report form and submit it to your employers ip (intellectual property) department. They decide if the idea is worth claiming for themselves or not. If not you own the idea and are free to file for a patent. If they claim it, they decide if they want to keep your idea a secret, publish it publicly or file for a patent. If they chose one of the first two options they have to get your agreement. Either way they will remunerate you a certain amount of money. If a patent is claimed, there are legally based algorithms to determin your remuneration.

So much about getting paid for your invention. If you are employed as a developer, your employer might expect you to make inventions. This means, your inventive thinking is already paid for in your normal salary. In the case that you can't be expected to regularly invent things, you might be able to negotiate a higher salary. I definetly would mention the invention in the next review.

8

You are ignoring one critical fact: Your idea, on its own, is completely worthless.

It only has value if you can turn it into a marketable product. You could do that by setting up your own company and competing with your current employers (though you would need to check if your current employment contract imposes any restrictions on doing that), or more practically, you can get your current employers to make use of it.

Many high tech companies have a method of rewarding employees for ideas which the company can patent, and the "one-off" payments can be substantial (i.e. more than a year's salary). But the long term benefit to you as an employee is in demonstrating what you can do to benefit the company, aside from "what you are being paid to do".

If you want to "go it alone" to make money from your idea, then good luck - but the odds are that you will fail.

You also need to seriously consider the possibility that your idea won't actually work, for some reason that you haven't discovered yet. The more senior engineers and designers might already know that because they have already tried it, before you even joined the company!

So, your best strategy is to sell your idea to the company management, and let the rewards from it (if there are any!) come in the future.

7

Get in touch with a lawyer !

IP, copyright and patent laws are amongst the most difficult and complex laws.

Never rely on non-professional sources for advice in these matters!

Don't aim for a raise but a one off payment, multiple payments or licensing agreement.

Make sure the contract (oh yes) is completely independent from your work contract and your work / employer.

If you'd negotiate for a raise, what would stop the company from letting you go after a few months?

Since you say, by law your idea belongs to the company, your negotiating position is weak at best, non existant at worst.

So talk to lawyers specialized in employment and patent / intellectual property laws.

See if you can patent it yourself after all to have the strongest negotiating position.

...Oh btw. it can make a lot of sense to have a very expensive, professional or luxury product.

Production is less ressource intensive than mass production and the profit margins are considerably higher.

Selling more as you suggest brings also additional distribution and advertisement costs as well as dangers of oversaturating the market.

Reducing the price could raise the risk of devaluating the product or its image.

5

First, let go of the idea that you deserve a slice of the money this represents. Legally it's not true, and practically it won't help you. The better attitude to take is that you're the sort of person who can (and does) come up with things like this. That makes you a stellar employee, and you deserve to be respected, appreciated, and paid as such. You like the people you work for and the environment you work in, and that's great. Taking this attitude will help you keep that.

My suggestion, then, would be to schedule a discussion with your boss. Figure out how much engineers at your level of experience are usually paid beforehand, and figure out how much you, as a stellar example of an engineer at your level of experience, want to be paid. Personally, I tend to nudge it down a bit after I've done that in the interests of workplace harmony, but you do you. "How do I figure out how much I'm worth" is a whole other question, and I won't get into the details of it right now.

In that discussion, lay out the basics thus far. You came in not really knowing how much you were worth, and with them not really knowing how much you were worth. You think you did poorly on the initial negotiation and wound up pretty low for your field. Since then you've done X, Y, and Z useful things, saving the company roughly Q amounts of money. Then you pull out the showstopper. "I've also come up with a new process improvement that I think will really blow you away." At that point you lay it out fully. You explain it so that they can understand it. If they call people into the office, you teach it to them. Whatever it takes. When you're done, you come back to the salary thing. "So, boss, given all that, how much am I worth?" - then use that as a starting point for negotiations, if it's not high enough to begin with.

If you present it in that way, there's no basis for hard feelings. Nothing gets ugly, no one has to go for a lawyer. At the same time, you're making a really compelling case that yes, they should pay you more money. At that point, if they're at all reasonable, they'll decide to pay you more money (...especially since they'll suddenly have a massive improvement in projected cashflow to pay you more money with).

The point is that right now, you have basically no leverage. You have absolutely no leverage that you can use without poisoning the well badly. As such, you can use this technique to basically gain social credit for freely giving away the leverage you don't have and creating an implied obligation to reciprocate. If they don't respond well to that, then they're indicating that they don't particularly intend to pay you well regardless. At that point you find some place that will pay you. You've certainly racked up a decent set of accomplishments.

Side note: Country of origin does matter here. I'm basing this on US companies. It's my understanding that France cares more in general about aggressively asserting and defending personal status. It's possible that going a bit more hardball would work better there than here. At the same time, you can't go too hardball because, again, you have no real leverage that you can actually use without likely destroying your relationship with these people and your career.

  • Don't do this if you feel undervalued. This is how you tell management that you're the kind of person who's happy with a half percent annual raise around Christmas time (which is actually a 1.0% decrease in earnings after inflation, instead of the 1.5% decrease in earnings you would have after infflation without the "raise"). Companies pay what they can get away with. Accept your hiring negotiation mistake and that you're not going to get much money for the invention, but know that this is the kind of work that will give you a network/industry reputation that companies will fight over. – L0j1k Mar 8 at 16:34
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    @L0j1k not all companies are staffed by homo economicus social morons. The kind of job where you love the atmosphere, the relationship with your bosses, and so forth is much more likely to be the sort where a soft play like this actually gets you a positive response. The OP has no leverage. The soft play really is his best bet to get a raise. If they don't respond well to that, then they're clearly not willing to pay you what you're worth. At that point, he walks, because he can't force them to. Admittedly, that would be better edited in. – Ben Barden Mar 8 at 16:50
  • I should have been clearer in my comment, admittedly, but I ran out of space and got lazy! I agree he has no leverage, which is why he needs to start thinking about a new job. Having no leverage is why companies give out bad raises (versus the raise you get from negotiating the new job's salary). Importantly, if he's feeling undervalued, nothing else matters at all. It's just a matter of time, and not even a good cash bonus will improve his feeling shortchanged. It's totally worth a shot asking for a raise, but even in good companies, this is exactly the kind of thing that never materializes. – L0j1k Mar 8 at 17:18
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    @L0j1k so... it's not that you disagree with the advice, you're just pessimistic as to the chances that it will work? Really, that sort of thing depends a lot on corporate culture, and on who exactly is in charge. It also depends a lot on how large the company is. Given the workplace as OP has described it, I'm inclined towards optimism, but it's certainly the case that there are a lot of companies out there who will respond as you suggest. I just don't think there's a better option available. – Ben Barden Mar 8 at 17:24
  • Well now I don't disagree with the answer ;) because it mentions leverage and looking for a new job, versus only trying to turn this into a raise. But I think the most important part of the question is that he already feels undervalued, because he's going into the situation feeling this way. So even in the unusual case a pay raise materializes, it's likely to be less than expected, which will only compound how he feels. It will be especially painful if this invention ends up being essentially a lottery ticket for the company. He needs a bigger raise than one can reasonably expect staying put. – L0j1k Mar 8 at 17:35
3

Note that this answer applies to France. Things are likely different in other countries, especially outside Europe.

First, before you get too excited, remember that ideas are cheap. Workable ideas are another matter. Are you really confident that:

  • Nobody has had the same idea before, anywhere in the world?
  • Your idea actually works?
  • Your idea has no hidden snag (e.g. the cheaper production method may reduce quality below an acceptability threshold)?

Getting a lucrative patent is not cheap. The initial filing fee is only a negligible part of the cost. Patents need to be written in a very specific way in order to be enforceable and to avoid trivial workarounds. Then they need to be defended to ensure that there is no prior art. Then they need to be extended to the parts of the world where it matters (if you only have a French patent, it won't prevent someone manufacturing a unit in China according to your process, and selling that unit in Germany.). A typical cost for a patent is 10k€–100k€.

It's important to know the legal situation around work-related inventions in your country. In France, if you have an idea that directly relates to your work, it belongs to your employer. You aren't allowed to develop it on your own, let alone patent it. If you wanted to develop it on your own, you would need to resign, and then you would need to be extremely careful to ensure that you can prove that you didn't have that idea while still working for that employer.

The good news is that while your employer owns the idea, if they file a patent based on it, they owe you two things: you have the right to be named as an inventor (which won't help you get a raise, but will get you a better starting salary in your next job), and you have the right to a bonus (often called “prime d'invention”, but this isn't a legal term, just a common name). The bad news about this bonus is that there's no legal minimum. Check whether your convention collective has anything to say about this; many don't. Check your company policies (accords d'entreprise) as well, and your work contract. Companies that operate in innovative fields typically have an accord d'entreprise about patents. Don't hope for much: typical amounts are from a few hundred euros to a few thousand, sometimes paid in several stages (when a patent is filed, when it's accepted in France and other countries).

I have already made several contributions including one which has been patented.

If you've already made a contribution that was patented, your name should be on the patent, and you should have heard something about a bonus. If you haven't, really do check the rules that apply to your company. Note that you may have a limited time to claim (for salaries it's 5 years, but I don't know if that rule applies for a patent bonus).

I strongly urge you to discuss this with a union representative in your company or with a délégué du personnel. If you can't find anybody suitable in your company, and you aren't already a member of a union, join a union and ask them to put you in touch with their invention law expert.

Describe the potential of my solution to my superiors and withhold the technical description until they commit to raise my salary in the eventuality that the solution works and is implemented?

This is an extremely bad idea. Nobody likes blackmail. This is practically guaranteed to backfire.

Start by detailing the solution with no strings attached, then approach my superiors to ask for a raise?

That's pretty much what you have to do by law. I recommend that you start working on your initial idea and ask for a raise once it's clear to your hierarchy that the idea is worthwhile. Or even ask for a raise based on your previous invention.

Ask for royalties on the future patent even though it would belong to the company (not common practice as it is not intended by the law)?

Not gonna happen.

I have badly negotiated my salary at my hiring because it is my first job in a private company (I was a postdoc in academia before). I now feel I am underpaid for my skills.

That's very common, and the cure is usually to switch employers. Now that you have a few years of experience in industry, with both the practical knowledge and the lines on your CV to go with it, plus a better idea of industry salaries, you're more likely to get a good salary. But it's rare to be able to progress from a badly-negotiated salary to the market rate while staying in the same company. Still, if you're being paid below market rate, your employer knows it, even if they won't let on, so if you ask for a raise, there's a good chance that you'll get it. And if you don't, well, make sure your CV is up-to-date.

1

As you said in the comments, your idea belongs to the company. It's still only in your head now, and we don't have thought police, but as soon as that idea is put on paper or told to anyone it's your company's property. You don't own this idea and you can't use it for negotiating a deal. The only 100% legal options are sharing the idea or forgetting about it.

If you tell them you have a good idea but you want a raise first, you're gonna get fired after you share the idea, it's highly inappropriate and borderline breach of contract to play your cards like that. They'd be crazy to keep you, what if you're gonna ask more raises in the future for simply doing your job? You're essentially taking the idea hostage, only releasing it on your terms.

The only possible way of getting something out of this without risking your job I can think of is negotiate a percent-of-revenue deal now, wait, then bring up the idea later to boost the company's revenue. Another way of dealing with this situation could be to negotiate a raise, ask for requirements for a raise if they decline, and share the idea without any demands. If your idea meets the requirements for a raise then you have your raise, but even this is unethical at best.

The only way to handle this like a professional is just sharing the idea without any strings attached, then schedule a meeting to ask for a raise, provide this idea as an argument as to why you deserve a higher pay and update your resume if they decline.

Whatever you may decide to do: get a lawyer. Don't go doing anything here without legal advice, don't take the internet's suggestions at face value, a whole lot more than your job can be on the line here.

  • The suggested "here's my idea, also I would like a raise" technique really doesn't seem like the sort of thing that should require a lawyer. – Ben Barden Mar 8 at 20:00
  • @BenBarden I agree, but we don't know the whole story here, there might be nuances that make it require a lawyer. Legal advice is often free in Europe, escalating to hiring a lawyer can always be a new decision, but I think it wiser to at least discuss this whole thing with someone specialised in law. – Kevin Mar 9 at 12:34
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    In this situation, in France, getting a lawyer is utterly ridiculous. I'm willing to believe that it's the right thing in the US, but in France, it isn't. At this point, in France, if you want advice in this situation, talk to someone from a union. – Gilles 'SO- stop being evil' Mar 10 at 22:46
  • @Gilles I'm from the Netherlands, not the US. The first step to any kind of non-standard negotiation should always be a visit to the "juridisch loket", a free legal advice entity. Especially if contracts and ownership are involved. Not because you need legal support, but because as a civilian you can never oversee all potential laws involved and how they might affect you. Remember, if a company wants to F you they will use any law under which they might be able to. Advice is free, doesn't take much time or effort and can save you a lot of trouble. I don't see any reason not to in this case. – Kevin Mar 11 at 10:31
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    I'm not familiar with the concept of “juridisch loket”, but it sounds like a social function that, in France, in this situation, would typically be performed by someone at a union, because it's about labor relations more than about the legal process. It would be different if OP was doing something that carried legal risk (e.g. if they chose to withhold their idea from their employer, then a lawyer would be warranted, because there's a serious risk that they'd break the law). – Gilles 'SO- stop being evil' Mar 11 at 11:35
1

The approach you should take is extremely simple:

  1. Send your idea to management/senior engineers and try to get it implemented in practice.
  2. A few weeks after doing so approach your manager and ask for a raise, documenting the contributions you've made to the company so far.
  3. If they fail to give you raise, immediately start looking for a higher paying job and quit at the first opportunity.
  4. If you do end up quitting, see if you can come back to the company after a couple of years for a second salary bump. If your idea is actually implemented, it could give you additional leverage into asking for a higher starting salary.

Don't fall into the trap of playing mind games with your current employer or trying to blackmail them into giving you a raise. This won't work and might even get you into legal trouble. But going for greener pastures is perfectly legal and is often the easiest way to get a raise in the modern corporate world.

-1

Generally speaking, unluckily for you, you are not the owner of any innovative idea regarding your work as employee in a company.

Find here an useful reference on patents from employees in France

As a matter of facts, very few positions in French industry are of the type you could prefer in this case... in all other cases the employer is, or is entitled to become, the only owner of your inventions related to his business.

In theory, the maximum you can do, if you are so sure of your idea, is to leave your work, make your research and, after some time, come back to your company and to competitors to negotiate the experimental application.

But it can be considered at the limit of ethics boundaries, very probably out of them for many courts.

But please remember this before doing anything:

the most of the “revolutionary ideas” synthesized by a newbie in a business... result to be not applicable for some details not known or not understood.

This is cruel statistics, because any newbie knows some aspects of the problem only and underestimates industrial application difficulties.

Anyway, ask the same question in general to your boss and try to understand more about your specific contractual duty.

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    leaving work and then coming back later with the idea sounds like it could get you in serious legal trouble. Trying to make money as an inventor is already fraught with legal and contractual peril. Trying to do it when an existing company with significant cash flow has a plausible legal claim on your invention and a strong incentive to pursue that claim seems like a recipe for disaster. – Ben Barden Mar 8 at 20:03
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    "You are not the owner of any innovative idea regarding your work as employee in a company" This is factually incorrect legal advice. Legally it depends hugely on your (country and state) jurisdiction and its laws on inventions, and also your work contract and whether it has any invention assignment or similar clauses. Also, on a practical note, how the company reacts depends how inventor-friendly the company is. – smci Mar 9 at 0:04
  • it does not depends on so many factors: it is fully determined for the friend of ours who is writing. This is not a virtual question. If he ask this, it means that he is not working in one of the (not so many...) countries where inventors have some clear rights (as in DE), because in those countries this aspect is explicitly recalled in the contract by law. I know what I’m talking about. French law is very similar to other European laws in these IP related aspects. – Rick Park Mar 9 at 0:13

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