Company offers less money during probation, and agreed upon salary after probation

Question

I have 2 years of experience in IT Industry. I was interviewed by a Product Based Startup. Initially, they asked me if I wanted to learn or get more package. I said that, since I am in the learning phase, I want to learn, but simultaneously, I should be able to afford to pay my bills and any surge in any money requirements.

Overall, here is how it went after the interview and overall a phone call (just before releasing the offer letter):-

• My Present Company's Salary is -> X

• The New Company During Probation would pay -> X + 18% (probation time may be extended upon unsatisfactory performance)

• After Probation -> X + 48% after 6 months of Probation

• After my negotiation, the salary After Probation -> X + 77% after 6 months of Probation

After the above discussion, they released the offer letter, in which they increased the net salary after probation

• Salary After Probation in the offer letter -> X + 107% after 6 months of Probation, while Salary during probation remains the same. (I am not sure why they had a change of heart)

Apart from that, there would be ESOP option after 1 year (the company is still not listed), Quarterly Performance Bonus, Permanent Work From Home, etc. But no PF (Provident Fund) deductions , no Insurance. Also, there is something called non-compete agreement of 12 months, which I need to sign, once I join the company.

I gave it some thought, and then I realised that, I want a base minimum of a certain amount even during my probation to be able to handle my regular expenses, which should NOT be less than X + 77%. Then the salary may be X + 107% after probation, and am thinking of mentioning it to the HR before signing the offer letter. I am still under notice period, and am to accept the offer.

I understand that I messed up the negotiation a lot, but I find it a bit fishy. Should I consider asking the HR to increase the salary during my probation, or just decline the offer altogether?

Answer 1

I gave it some thought, and then I realised that, I want a base minimum of a certain amount even during my probation to be able to handle my regular expenses, which should NOT be less than X + 77%.

That is an odd statement. X+18% was already better than what you are currently getting. Why do you need 77% all of a sudden? Sure, we we all "want" more, but typically there is some sort of justification behind it.

I understand that I messed up the negotiation a lot,

You sure did!

but I find it a bit fishy.

What exactly do you find fishy here? It looks like the company is negotiating in good faith and even threw you an extra bone.

Should I consider asking the HR to increase the salary during my probation,

You certainly can. But your chances of success depend a lot on how you approach this and how you justify your change of mind.

or just decline the offer altogether?

That seems silly. If you are willing to talk away anyway, you have nothing to loose by re-negotiating (other than landing on their black list). Keep in mind, you'd be stuck with X + 0% at this point.

Answer 2

Two things here:

1. You have boxed yourself into a corner with this notion of "learning phase". Putting this on the table gives you a lot less leverage with which to negotiate.
2. I wouldn't accept a probationary salary. Either they pay you a fair market rate that they intend to keep paying you, or it's a nope. You can't go to the market and tell the grocer that you'll pay a probationary rate for food until six months from now. You can't do that with your landlord, or a mortgage company. Right???

The likely story on how this works out long-term is that six months after you start, you'll start asking about coming off the probationary rate. They'll tell you "we're working on it" with hopes that you just keep working, and make things super busy on the job to distract you. This is predatory, and not uncommon.

Answer 3

Since you are unsatisfied by the current offer, and neither you nor they have walked away from the table yet, it sounds to me like negotiations are just not over.

I was in a similar position and I continued to negotiate, with the end goal of either getting what I needed or either party giving up and walking away. It takes a surprising lot for someone to walk away from the table in this situation, so just go for it.

I do recommend reading up on negotiation if it's a weak point of yours, though.

Answer 4

(probation time may be extended upon unsatisfactory performance)

Do not accept this part. This is essentially giving them a way to delay your standard wage and benefits indefinitely. Leaving that escape clause in there is the equivalent of writing a contract (as it relates to getting out of probation) and allowing them not to sign it.

It would be a nonsensical thing for you to sign, because it binds you but it does not really bind them (except for the probation part, which is really not much of a commitment on their part anyway).

If your performance is really unsatisfactory during probation, tell them to let you go. If your performance was really unsatisfactory, and if they didn't have the confidence that you would improve, that's really what they should be doing anyway.

In other words, make sure that your transition to full time employee with all the benefits and wage is automatic and can not be stopped (unless they let you go before that specific date).

After all, think about this for a minute. If they're negotiating that hard now, it means they'll most likely have the same attitude 6 months from now. An employer like this doesn't magically become nice to you after 6 months.

And with a crazy clause like that, it also means that they won't feel the need to negotiate with you, they'll just string you along indefinitely telling you that they don't have time to talk about it right now.

And everytime you bring it up, they'll look annoyed, they'll snap at you, and worse still, it will only make them be on the lookout for reasons to tell you that your performance is inadequate.

And I don't care how good you are. You could become the best performer in your profession, or the top employee in your company, but if your employer really wants to find flaws in your performance, it's going to find them whether those flaws exist or not.

Also, there is something called non-compete agreement of 12 months, which I need to sign, once I join the company.

This offer is only getting worse and worse. If they want you to sign a non-compete, you need to see a copy of it now, not later. And the same goes for anything else they want you to abide by, you need to see those documents now.

Do not accept any offer they've made, not even tentatively, until you've absolutely seen everything.

How broad is the non-compete? Who do they define as their competitors? If the non-compete is overly broad, which I suspect it is, you shouldn't sign it.

If they really want you to sit on your ass, or change to a non-competing profession, while your skills and CV stagnate and become stale, you need to be paid in full for each of those months they want you to do that.

Also, what happens if they let you go within your probation period? And why a non-compete when they're obviously treating you like a lowly intern? To me, that non-compete sounds more like a means to make sure you can't leave the company, or that you can't negotiate a higher rate. Think of the future. Do not even think of signing such a document unless it's extremely narrow in nature.

Apart from that, there would be ESOP option after 1 year (the company is still not listed), Quarterly Performance Bonus, Permanent Work From Home, etc. But no PF (Provident Fund) deductions , no Insurance.

Any ESOP option offer they make you now is essentially meaningless. The same goes with any promise of a "Quaterly Performance Bonus". If they're able to change the share dilution any way they want, or change your bonus based on your supposed "performance" which they get to judge themselves. These promises are essentially meaningless. They're worth nothing. Also, these things are extremely difficult to negotiate correctly. Just assume that they've offered you absolutely nothing on those two fronts.

And assume that even if the startup becomes a unicorn and the owners become billionaires, which is very unlikely anyway, they'll give you nothing.

But no PF (Provident Fund) deductions , no Insurance.

Now, they're showing you their true colors. I don't know much about India, so I don't know what "Provident Fund" means. But if they can't even provide you with insurance, even once you're out of probation. Then, it's an extremely bad sign. To me, it seems like they're not even trying to negotiate in good faith.