Tuesday, October 16, 2012

Negotiating Your Own Compensation

Photo source: istockphoto.com

One of the trickiest issues out there for an employee is their own compensation. If you're like me, you’d rather walk on hot coals than talk about comp. Pretty much the only thing I hate doing more than talking to an employee about their compensation is talking to my manager about MY compensation. I find the whole thing incredibly tacky, uncomfortable, distasteful and unproductive. Have I made myself clear?

With all that having been said, here are a few things I’ve learned about talking about comp over the years:
1. You have to advocate for yourself, because no one else will. No company, no matter how employee-friendly, does a good enough job advocating for its employees’ compensation or career path. If you want to take control of your career path and your compensation, do it. Don’t expect your manager to look out for you; they won’t.
2. Nag, but don’t be a nag. It’s OK to be a squeaky wheel periodically, but don’t do it constantly. At Zillow, we have 2 employee review periods per year, and only one of them is connected with annual compensation changes. I prefer that compensation discussion be confined to these one or two times per year when it’s meant to happen. You don’t want to become known internally as the ungrateful employee who’s constantly bugging his/her manager for a raise. Bring up compensation thoughtfully and infrequently.
3. Avoid internal benchmarking. Some people at a company, especially those in Legal or Finance, are privy to others’ compensation. It is a big no-no to cite someone else’s compensation when discussing your own. Never ever say “you should pay me X because you pay Tom Y”. That’s very unprofessional, and is perhaps grounds for termination.
4. Don’t threaten your manager with a competing offer. When I was a relatively new manager a decade ago, I had a top performer come to me and say he had an offer at another company. I begged my manager to let me give him a raise in order to keep him. My manager told me I was making a mistake, that matching someone’s offer never works out. I ignored his advice, gave the star performer a raise, and he ended up quitting six months later. My manager was right. I had made a bad mistake. All I had done was train the rest of the company to think that the only way to get a raise was to interview elsewhere and get a competing offer. In general, I have resisted the urge to match competing offers ever since then. If someone is unhappy enough to interview elsewhere, they're going to end up leaving anyway regardless of whether you match. So let them go up front.
So what’s the best way to talk about compensation with your manager? Lay out your accomplishments and your contributions to the company. Be as non-confrontational as possible, explain that you love your job, but you want to be paid fairly for your contributions. Advocate for yourself, and be polite, but not pushy, and confident, but not arrogant. And most of all, don’t do it more than every 12-18 months, for your sake and for your manager’s.
- Spencer Rascoff

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