How to deal with a promotion if it would be more lucrative after an upcoming rule change?

Question

The appraisal system in our company is going to change next year. In the old system, if you make promotion to another function (e.g. from junior to mid-level) you get a standard raise of 3%. In the new system, this raise depends on your relative salary compared to the maximum salary for the new function. This new raise is at least 3%, but can be as big as 10%.

I'm not yet sure I will get a promotion this year, however, it might happen. If I get it this year, this would mean I get a 3% raise (from the old system), while next year I would get an 8% raise for a promotion.

Over a ten year period, this amounts to a difference of 12k€ that I would get more if I get my promotion next year. Therefore, I was thinking about the consequences of declining a potential promotion this year. I do understand that decline the potential promotion this year gives no guarantee that I will get it next year.

What is the best way to approach this situation?

Answer 1

If you want to actually take the promotion, discuss the problem with the manager suggesting you for the promotion.

I would love to accept right now, but I have calculated that if I accept now, it would actually be a loss to me due to how we are changing to the new system next year. As I am committed to stay in the company long-term, that works out to a difference of 12k€ over the next ten years. For me to not consider this a loss, I would need an immediate raise of X% to be coupled with the promotion. How are we going to proceed?

Answer 2

The appraisal system in our company is going to change next year.

What if is the new rule is called off for some reason? What if the rules and policies change, after you decline the promotion this time, offering more-or-less the same as now? What if any other associated terms and conditions are changed, so somehow you become non-eligible for the promotion next year?

Do not back upon on the assumption that something "is going to" happen (unless it's in a written / guaranteed specific communication with you) - rather adjust the present standing accordingly so that you are covered in both the positive and negative turnouts. I'd say, have a discussion with your manager and express the concern. Then, ask for the re-calculation of your offered raise for this year and next year, considering that you're getting the promotion this year.

Answer 3

Realistically, you should never turn down a merit promotion.

While you are correct, you might be eligible for a bigger raise next year, that likely assumes the promotion and salary budget of the company is going to increase significantly. More than likely, the budget the company has to promote people stays relatively the same, and the new range of raises is to differentiate different levels of performance.

The company could:

• Promote a lesser number of people, but at higher raises. Hence, you might not make the cut if they decide to only promote half as many people with a 6% raise.

• Just continue to give out 3% raises for promotions and give excuses as to why no one promoted got a higher raise.

Further, when you say this:

Over a ten year period, this amounts to a difference of 12k€ that I would get more if I get my promotion next year.

You're making a big assumption that you will be with the same company in 10 years. Chances are higher that you've already moved onto to your next job which more than makes up for this amount.

You are also assuming you'll never be in a position to negotiate for a higher raise within the company on your own. Often achieved by getting an offer from another company that pays higher.

Finally, it's likely also incorrect to assume that the company's promotion and raise procedures stay the same for the next 10 years. As the economy and job market fluctuate, so does the economy of pay raises.

Answer 4

Therefore, I was thinking about the consequences of declining a potential promotion this year. I do understand that decline the potential promotion this year gives no guarantee that I will get it next year.

What is the best way to approach this situation?

Think it through now. Be prepared when and if the promotion is offered. Be quick with a response - either "Thank you!" or "I respectfully decline".

Be aware that declining a promotion in many companies is a permanent choice. You may never be offered another opportunity there.

Also try to assess beforehand what your company culture does about someone who is put in a position that they no longer want. In some companies, you could get promoted, work in the new role, decide it doesn't fit you, then safely request that you go back to your old role.

Answer 5

If you decline the promotion and someone else gets it then you'll be waiting even longer for a promotion and the pay raise you want.

Realistically, you should accept the promotion now assuming you can handle the responsibility. You can lightly ask about the pay raise conditions but don't make it seem like an ultimatum.

Switching jobs has become the norm for attaining a desired salary and a better job title is a far better negotiating tool when switching jobs.