Senior engineer requesting promotion without payraise after promotion deferred due to COVID

Question

One of our senior engineers, "Gus", has been working towards the top level of engineer in our company, "Principal Software Engineer". The promotion is a pay increase, more responsibility, more creative input/control, etc. We generally provide engineers with more challenging work and "test" them in the new role for about 18 months before giving the promotion (to see if they can handle it, and will rise to the challenge). We maybe have 20 people at the level in the entire company at any time, and anyone who makes it into this role is typically a "10x engineer" who also has excellent social skills and leadership abilities (i.e. need to be brilliant with technology and people).

I had to tell Gus that his promotion normally would have taken place after our most recent quarterly company-wide meeting, but it has to be delayed due to COVID and measures the company is taking to save money (I don't get a bonus either; all senior staff miss out on bonuses and promotions this year). Gus requested he get the promotion, even if no increase in salary occurs "since he's already working in the capacity of a principal engineer going on 2 years now". When I asked him why he'd want that, he noted "the money always follows the promotion, one way or another". I assure him there's no guarantee the increase in pay will happen any time soon, but he insists he'd like the "promotion on paper".

While going through the paperwork, I have to re-confirm this is really what he wants, as the change in title might lead to an increased/more-challenging workload for him, with no pay increase. While asking why this is so important for him, he bluntly states:

• If his employment ends due to layoffs, it helps him negotiate a better salary with a future employer.
• If things pickup and company still hasn't increased his pay significantly by then, same thing: easier to negotiate a higher salary at another company and quit his current job.

Gus is definitely honest, and I have to admit a little too honest with his boss in this case. Now the question I'm asking myself, is: should I give this empty promotion to him? It seems that no matter what, it either leads to him being more likely to leave, or being more of a "flight risk". He's a very talented engineer, and I went to bat for him to try and get the paid promotion for him even in these times where budgets are being slashed, but no luck. I'm tempted to remind him this is a bear'ish market, and not a lot of companies are hiring, but that doesn't seem to bother him (maybe he has enough set aside to not have to work a long time; don't know).

FWIW, I ran this by my own boss, who wasn't overly helpful, and she said I should just not give him the empty promotion, and to see if we can make him angry enough to quit (boss is trying to reduce costs, avoid severance payouts, etc.; and doesn't care how many teams she has to butcher to get the numbers she needs). I'm lacking advice that is neutral and not laced with naked self-interest.

Edit: there's also the optics here to consider. Other people might think he's the one person who got a paid promotion during this time.

Also, our company (regrettably) has a "no reference" policy. If someone calls us for a reference or asked for a written reference, employees are reprimanded. HR can only confirm dates of employment and job title, nothing else.

Answer 1

TLDR version: You absolutely should give him this empty promotion with the promise that there will be a stated goal (and activity) towards making it not empty in the future.

You should thank Gus for his honesty. You should be fighting to keep this guy for this kind of honesty. The fact that he feels safe enough to share these exact thoughts with you is a huge measure of trust on his part as well as a statement of his faith in leadership. He's been doing the job for 2 years, and I'm assuming he's doing it well because the idea of promotion seems like a foregone conclusion. You want this guy around.

I'm also reading this as if you're his manager or his manager's manager - at least close enough to be very plugged into the situation and able to affect change yet still within specific company/budgetary constraints. If you're interested in his future, be interested in his future in or out of your company. Anything else is just holding him back, and doing that will hasten his departure.

I've given 2 empty promotions in this current environment, and we have plans to do 2 more in the coming future. The CEO has stated that salaries won't be adjusted, and frankly they deserve to be recognized for their commitment and their effort. If this helps them negotiate a better pay package somewhere else and they decide to leave, then that's just the way of the world. I will write a reference letter for them myself. They deserve to be compensated for the level of work that they provide. If my company can't do that, then I owe it to them to help them get it elsewhere.

You will sorely miss this person's contribution and presence if they choose to leave. Think how much worse you could feel if you limit this person's growth/potential for something as silly as a budget.

Recognize him. Recognize anyone who is pulling their weight, and if that means a promotion on paper and some difficult budget discussions for you so be it. That's the price of leadership when you get down to it. A manager will do what's best for the company in this moment regardless of the employees' needs. A leader will achieve what's best for the company by meeting the employees' needs.

I would be leery of your own "boss". This kind of manipulation is pretty common, and it should be reserved for those individuals likely to cause problems within the teams. When you engage in this kind of managerial misconduct (my own personal interpretation of it), you run the risk of damaging morale not just for that person but for the entire organization. Think of how many teams a disgruntled senior/principal can destroy with a negative attitude.

Note: The stated goal of activity towards not making it empty in the future does not have to be a promise of a date. It simply needs to be a promise to advocate and regular updates on progress/likelihood. Maybe monthly come back, share some of the progress in the financials and indicate leadership's intentions of modifying salaries.

Supplemental note from the question edit: The optics are always going to be difficult. Depending on what can be shared, it might be acceptable to indicate that the company is not able to offer the standard raise at this time, and we still want to recognize excellence and performance...

Update just for my own edification: We were able to complete our recognition of team members' success, and the empty promotions have paid off by becoming not empty.

Answer 2

Speaking as someone who's been in a somewhat analogous situation to Gus here, denying them the promotion will make them much more likely to leave than just giving it to them.

They want it. They've earned it. They're willing to compromise with the company given the situation (no salary increase) in order to get it. If they can't get it from your company then they will go somewhere else.

And if they're as good as you say they are, they won't have any problem doing so.

Answer 3

It seems that no matter what, it either leads to him being more likely to leave, or being more of a "flight risk".

I disagree. He has been clear and honest with you that what he wants is pay commensurate with the work that he's been doing for the past two years (that's horrible, BTW). Giving him the promotion buys you time:

If things pickup and company still hasn't increased his pay significantly by then...

Emphasis added. If you give him the promotion he's at least willing to wait and see if business picks up and he can get a raise. But if you refuse to even give him the title then he's going to start looking now. If he's talented enough to be worth promoting despite budget cuts then he's going to find work elsewhere, even if the pandemic means it takes him longer than usual. He won't have the title of Principal but he's still going to be able to put all of his accomplishments on his resume.

Answer 4

Giving him a promotion is a win-win. It's the title for him, and it's no cost increase to the company.

It also shows him that you have faith in him.

Denying it to him, well....

Engineers are known to take revenge

He trusted you enough to spell it out to you. You should trust him enough to give him the title. Besides, if your business doesn't recover to the point of being able to pay him, chances are you'd be looking for new work as well.

Don't make an enemy here.

Answer 5

It's simple, really.

If you don't give him the promotion, he'll be frustrated and leave in bad terms. You're sad, he's sad.

If you give him the promotion, two cases :

• he still leaves (but probably later than if you didn't give him the promotion and in better terms). You're sad, he's happy.
• he doesn't leave. You're happy, he's happy.

Either way, if you appreciate and respect the guy, there's no reason at all to not give him the promotion. In the worst case you've just rewarded a guy that deserve it at not cost at all for you company, think of it as a good deed.

Answer 6

I agree that you should give him the promotion even if you can't back it up with the pay rise and think the other answers are good.

I just wanted to touch on this point specifically:

If things pickup and company still hasn't increased his pay significantly by then, same thing: easier to negotiate a higher salary at another company and quit his current job.

From reading your question, you seem sure that he's about to leave, but even if he wants to stay on and likes the company, this is a savvy reason from him for pushing for the promotion ahead of the pay rise.

It's not difficult to imagine a case where in 6-12 months time, things are better but not 100% — maybe there's some more money for promotions, but not the usual amount. If that turns out to be the case, it feels like it's more likely to happen for Gus — he's already been working as a Principal on a Senior's salary for 6 months, so he's "top of the queue".

If you put off the promotion & you need to make the business case for his promotion again in 6 months, it's possible that it gets pushed back again ("I know you said your engineer dserves a promotion, but we only have £X amount and I really need to reward this other person in Sales").

It's much easier for you to defend the salary increase on his behalf if he's already doing that job (he's underpaid vs market rate, etc.)

Answer 7

The other answers are fantastic and I agree with all of them (at least the ones who say you should give Gus the empty promotion, and the ones who say that Gus isn't a flight risk, but he will be if you make him one). I wanted to touch on a couple things:

If things pickup and company still hasn't increased his pay significantly by then, same thing: easier to negotiate a higher salary at another company and quit his current job.

This is completely rational. It's Gus's way of telling you he's going to hold you accountable. Gus works very hard, above his pay grade; he wants and deserves a raise. However, he does not trust your company to compensate him properly. He's willing to compromise his pay raise for now, but he wants to make sure that when the proverbial tides rise, they lift all the proverbial boats, including his. He's letting you know that if his personal success does not fall in line with the company's success, he's going to take his success elsewhere, and that's totally normal.

FWIW, I ran this by my own boss, who wasn't overly helpful, and she said I should just not give him the empty promotion, and to see if we can make him angry enough to quit (boss is trying to reduce costs, avoid severance payouts, etc.; and doesn't care how many teams she has to butcher to get the numbers she needs). I'm lacking advice that is neutral and not laced with naked self-interest.

Of course, this is definitely the wrong answer, but depending on your locale, it may also be illegal. I would definitely recommend doing some research on something called "Constructive Dismissal" (defined basically as this, where you piss off an employee so much that they have no choice but to quit, in order to avoid paying severance and other things) and whether or not your locale has a statute preventing it. If your locale has a statute against Constructive Dismissal, you may want to report this comment to HR, as execution of such a plan by this manager in the future could open up your company to lawsuits.

Answer 8

A promotion basically comprises two parts:

• Increased responsibility
• Increased reward

An outstanding employee (this is not in dispute) has earned a promotion (this is not in disupte). Your company is not currently able to give him the increased reward that should come with his promotion. He wants the promotion anyway, to take on the increased responsibility, but not - for now - the reward.

Go ahead. Give him the promotion. He's earned it, he knows he's not getting the full reward, he is happy to accept that, and it gives both him and others something to celebrate during these difficult times.

Honestly, this is so refreshingly uncommon compared to the opposite situation (someone wants more money when they're not performing and won't take on more responsibility) that I'd snatch at the opportunity to share good feelings for once.

Answer 9

For what it's worth, are you sure the market is THAT bad for principal software engineers right now?

I know a lot of companies are struggling, but some have actually come out of the pandemic well. Wayfair is booming and hiring engineers aggressively, as is Amazon and Google/Facebook are always hiring too. My startup is looking for good principal engineers as well, and we're not alone.

Also, its very standard for companies to not give a reference due to liability reasons, beyond the standard "yes he worked here and he didn't assault anyone". That's not going to hurt Gus when he's interviewing places, if he can rock a coding interview and has solid projects to boast of.

If anything, my company is telling me its actually been harder to recruit / hire good engineers this time, because people are hesitant to jump jobs during a pandemic.

As such, I'd suggest maybe Gus is right to be confident in himself and his skills, if he is as good as you think he is. Companies are more hesitant to spend on juniors right now, where they may need years of training to be highly productive. But a top quality engineer is still like diamond dust for any company which isn't bleeding losses like yours is right now.

Answer 10

FWIW, I ran this by my own boss, who wasn't overly helpful, and she said I should just not give him the empty promotion, and to see if we can make him angry enough to quit (boss is trying to reduce costs, avoid severance payouts, etc.; and doesn't care how many teams she has to butcher to get the numbers she needs).

It sounds like Gus wants to leave anyway. If not, he should leave!

Maybe tell your boss that Gus is worth two of any other employee and should be the last to be "made angry" and leave. Of course the danger is that your boss will keep Gus and fire you! How big is the team and how likely is that?

Maybe confide in Gus that times are hard and that no-one's job is safe. Give him the promotion and let him start looking around.

The whole situation sounds horrible. Lawsuits and "correctness" have destroyed trust everywhere. My commiserations.

Answer 11

Has he been in an "Acting Principal Engineer" role for at least 18 months? If so then I would say he ought to have his salary updated to reflect this and have it backdated to when he took on extra responsibilities.

18 months is a long time to "test" somebody in an entirely new role, if you give him his title then at least he can move on to somewhere that will pay him what he's worth. If he still wants to work with you then well done, your employer got itself a Principal Engineer on the cheap and should be grateful.

Answer 12

Beware of Legal Complications

In some countries, your company could be required by the local legal framework to give that expected raise after the employee's been given the "empty" promotion.

It's not unusual in some places, where:

• the laws clearly state that if a worker has been given new responsibilities and challenges, as well as a new title, then the pay has to reflect this evolution in accordance to other practices in the company;
• it's even common to have roles indexed against a series of levels, with matching compensations.

So, it may be that the employee is trying to "bait" you into that scenario.

He's Right

The new title gives him leverage, both within the company and outside the company. So, it's definitely a reward for him, even if it doesn't come (yet) with a monetary reward. Status / perception is also a thing.

It may not put his mindset in the best light, but it's not unfair from your employee to request something that you could give him "for free" if your main reason to push back is to cut down on cost. So, unless there are potential complications as noted above, and the perception in the company wouldn't be too bad (ie other employees won't mind), I'd go with it.

(Side note: your boss comes out a bit d*ck-ish here... But that's part of the game, I suppose. It is some people's jobs to cut down costs. But I wouldn't want to do that if it means I lose talent, and you said this guy could be a 10x engineer, so...)