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A software engineer in the team I lead was a very good worker and in the last two rounds and got a salary increase of the maximum the company allows. A couple of months ago, he said he was very disappointed and this raise doesn't reflect his hard work and the stress he's under, so he'd "keep his productivity increase to X%".

True to his word, he slowed down his work pace. He still does things well, even his attitude towards the rest of team has improved from his previous light grumpiness, and he's probably still the best and most productive engineer in the team, but to me this behavior is kind of immature and a bit unprofessional. On the other hand, the salary cap is not something I set so there is not much I can do there.

How should I handle this situation?

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Be happy he isn’t on his way out the door.

I’ve always found it to be interesting that people in power (whether teachers, bosses, “thought leaders”, etc.) always lean on their high performers to get disproportionate performance increases but find it astonishing and unprofessional that they want disproportionate rewards for those increases. They are usually even more astonished when they leave.

Per dollar earned he is probably the best asset you have yet here you are complaining about him instead of one of your other engineers.

Can you imagine complaining about the best performing stock in your portfolio? As that is what you are doing.

I would have some backup candidates in mind as I suspect he will soon be gone once the pandemic is over and the world stabilizes.

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    It's obvious the engineer knows he's underpaid, and he basically knows you want him to work harder (deduced by this question). It is best you fix your side of the problem before he walks. He might still walk because it sounds like he'll have no problems getting a raise by switching jobs, so you want to fix that too. – Nelson Jul 2 at 2:15
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    Perfect answer! – Ryan Jul 2 at 2:26
  • 100% agree - Unless you find a way of properly rewarding this person you're probably going to lose them. – Old Nick Jul 2 at 13:18
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Sounds like a win win situation. He's happier and less stressed. You're still getting the quality work done.

Increasing the workload of an unhappy stressed employee is a bad idea in the long run. There is a limit to how much extra a person can do especially if they feel they're not being rewarded enough for it. Push on this and they may leave.

I did 30% of the work for a 9 man engineering team and hit all the pay caps. But the load was so heavy and stressful over time that it only took something relatively minor for me to walk out waving a finger at all and sundry.

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    I am not 100% sure that OP is out the woods quit-wise, sometimes they get happy when they've made their mind. – Tymoteusz Paul Jul 1 at 17:14
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    @TymoteuszPaul Agree. with that asessment – Old_Lamplighter Jul 1 at 17:44
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    @NuclearWang following your logic, the company did not pay the employee what he was worth and then adjusted. Even if they would now overpay them based on your view (which I wouldn't follow anyway), then they have to make up quite some time to pay for work already done. And then all they have to do to readjust the payment to their perspective of what it's worth is not give another raise in the future, inflation will take care of the rest. – Frank Hopkins Jul 1 at 18:31
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    @TymoteuszPaul you're right, but that is a normal risk anyway. Best not to add to it. Just ensure that the chap isn't non-replaceable which should be done anyway. Biggest danger if he leaves is that the rest cannot cope with the workload and there's an exodus. That's what happened when I left. Increasing his workload makes that even more likely. – Kilisi Jul 1 at 19:13
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    @NuclearWang well his manager seems to think he's worth more but that there is a cap that stands in the way, so the company is at least conflicted. And since there was no contract about what additional responsibilities come with the raise the employee sure is not renegotiating anything. He worked his butt off and now gets finally paid closer to what he's worth, but apparently not what he thinks. So he adjusts to bring his company's and his view in line. – Frank Hopkins Jul 1 at 19:39
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At many employers "a salary increase of X%, the maximum the company allows" isn't really the maximum. The policy is just a negotiating ploy by the company to control their costs. Does this X% apply to your CEO's total compensation? I'd wager it doesn't.

I've heard of people getting around such policies simply by asking a senior manager if they could make a special exception - which it turned out they could.

At another company I heard of there was a raise limit - but not a limit on the company's counter-offer to retain a key employee who'd got a better offer from another company.

Or perhaps there's a limit to salary, but there's something equivalent that can be increased, like pension contributions.

In very bureaucratic organisations, I've heard of "pay freezes" where they couldn't give out any raises - but they could create a more senior position with a higher pay band but broadly the same responsibilities and transfer the person into it.

If in your judgement the guy's worth more money that the company should be keeping him happy, you could go find the workaround in your organisation, and use it.

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  • Sometimes this can be pretty fixed as it is based on fixed wage ranges agreed on in negotiations with the local union(s). It's also in the union (and most) workers interest to stick to them, so there are no exceptional top-earners in roles that normally don't warrant that sort of payment (like many rules such rules prevent the worst but also can hinder some positive outcomes). But if that is the case then this should be known throughout the company. So if it comes as a surprise to the employee in such a case, that's a clear sign of bad company policy and development path communication. – Frank Hopkins Jul 3 at 14:06
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If you want to keep him, and at his high-level of production, you need to come to an agreement with him about compensation.

Note, compensation isn't just about money. If your company won't allow you to pay him more, find some other way, such as flexible hours, shorter hours, et cet.

Level with him, and see if you can come to an arrangement, he feels slighted, do something to make him better.

Put it out there and ask him if there's anything he'd like that would make up for the lack of money. See what happens. Worst case scenario is that you're no worse off than you are now.

By the way, don't call him unprofessional, he only dialed down to "still the best, but less awesome", things could be much, MUCH worse.

Look at THIS nightmare scenario

How can I deal with troublesome Professional Engineer?

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    Good point on asking him if there's anything he'd like that the OP can actually arrange. Weird, I got 10 downvotes for my excellent answer on the linked question :-) – Kilisi Jul 2 at 1:54
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You know your company makes way more money off of this guy than he's paid and that he's the most productive so it absolutely does not matter if he pulled back a little or not. In fact, for all you know the other people on the team are always pulling back but you just assume that they aren't. In that case they are way more of a liability than he is.

If I'm in your shoes I would be going to higher-ups and telling them that the guy needs more money. Why don't you go to bat for him instead of viewing him as the enemy? Imagine what he could do when he actually has what he's asked for. Maybe you could even cut a less productive team member, eh?

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  • higher-ups Good point about the potential for other team-members to have been behaving like this the whole time. – enhzflep Jul 2 at 0:54
  • @enhzflep Thanks for edit suggestion. I was in a rush. – HenryM Jul 2 at 2:08
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Salary caps are not God-given. Essentially, they exist to prevent you from single-handedly increasing one of your subordinate's salary to a disproportional level. Nothing prevents this decision from being taken by involving other people. Talk to your superior and make them aware of the situation.

In the end, if the guy deserves 2x the average salary and you can't pay him that much, he'll have to find a company that can.

Speaking of the attitude, this guy is about as "immature" as the bartender who refuses to give you two beers when you only have paid for one, because your wife decided to set a cap on your bar expenses.

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    In the end, if the guy deserves 2x the average salary and you can't pay him that much, he'll have to find a company that can. And there are usually companies that will seek out high performers like this and eventually find them, and they'll happily take the 200% return on the high performer instead of the 400% OP is unwilling to give up. – mag Jul 3 at 14:13
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There are two questions you need to answer:

  1. With the current salary and work performance, are you satisfied that the company is getting their money's worth?

  2. Is the employee happy because they are getting paid more and have a lighter workload and so are less-stressed and more relaxed? Or are they angry they aren't getting more money and working in a "protest mode" that will make them miserable long-term?

If the answer to 1 is "no", then you have to tell the employee that the raise was given with the expectation that performance wouldn't get worse and the employee has to either take a pay cut, increase their productivity, or leave.

If the answer to 2 is that the employee is happy, then let them know that you are okay with the situation and that you hope that they are more relaxed and less stressed and you will see what you can do about getting them another raise when policy next allows it.

If the answer to 2 is that the employee is not happy, then you have an actual problem. Someone who feels underpaid and unsatisfied because they are not living up to their full potential because they want to punish you for underpaying them is not going to be a stable situation. Expect the employee to quit if you can't find a way to get them more money. Give some thought to whether they're really worth more money and, if so, try anything you can to get an exception.

If you can't get them more money and they are unhappy, they will probably be looking for a new job very soon (if they aren't already). All you can do is try to make them happier with the situation with some social engineering. It may help to get a better idea of what they want their career path to look like and show some empathy. Building a better rapport with them may make them more satisfied. Let them know that you are okay with their level of productivity and don't want them to be miserable or get burned out.

If you can't pay them what their work is worth and they can find someone who will, them leaving is probably best for all concerned. If you really, really don't want them to leave, you need to find a way to pay them what they're worth.

But if they were being overworked before because they really wanted a lot more money, then it will never work out. They'll either be unhappy because they're underpaid or they'll burn out. If this is the case, you can try explaining to them that it is best that they keep their reduced workload and you will try to keep things low-stress for them as well.

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You can't expect people to always work 110%

This worker of yours did 110%, or even more, of effort, for a long time. He had a small pay rise. He's now slowing down. That's in fact the best thing that could happen to you. HE'sz tired, exhausted, maybe nearing burn-out, but instead of going on accelerating before a big crash, is actually taking care of himself. Even better : he stays productive while reloading his batteries.

He's clearly a good example of self management of effort. One has to know to ask a lot from its engine...but not too much.

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I will try to give my take, taking in consideration something I have not seen addressed in other answers.

As already said, he's happier, less grumpy, the team goes along better, and he is still the most productive. Even if he could do more, if he doesn't provide less value than what he is being paid for, it's ok. This situation might go on like this if you don't act on it, and it might not be a bad thing.

Let's analyze the situation. He worked as hard as he could, felt to be doing so much to deserve Y%, but company provided a raise of X%, with X<Y.

Right now, he thinks he could get more, and he is coping with that providing what he thinks is the value he is paid.

He might not be actively looking for it, but if the chance to get more comes up, you're going to lose him. If you don't want that, you have to fill the gap between what he gets and what he thinks he deserves:

  1. you could try talking with upper management to see if an exception can be made, so that he can get the money he deserves.

  2. another option would be to talk with him and see if maybe there is something else than salary that could get him more value. Maybe some budget for personal development? extra paid leave? there are many other things that may give him value.

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