
Ask HN: How to handle employee requesting inflated salary/title? - startupqs
How do you tactfully and delicately handle the situation where an employee requests compensation and&#x2F;or title above his&#x2F;her performance?<p>On the one hand, you don&#x27;t want to bruise egos, but on the other hand, you need to maintain fairness to other employees and don&#x27;t want to let title&#x2F;salary inflation cripple your startup.
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bko
Tell the employee that you think it's a good idea and setup a plan to get them
there with objective goals and touch back in 6-12 months. If he doesn't
succeed in meeting those objectives, you didn't lose anything and you could
point to it in not giving him the new title/promotion. If he does succeed,
then you got more out of him. You could turn this around to be a positive
growing experience.

~~~
codeonfire
This is basically how the game is played. The other half is that managers hire
their unqualified friends into those same high level positions no questions
asked. No hoops. no career development carrot and stick bullshit. Welcome to
office politics. You are a fool if you jump through the hoops. Smart employees
will just go get the job they want somewhere else.

~~~
raincom
This is how even senior management positions are filled.

~~~
randycupertino
I had my first and last experience ever working for a family owned business
where the 3 daughters of the owner (straight out of USC) were hired to be the
"Directors" of their own departments... with no employees. These girls had
nothing to do so they started killing time making insane mandatory dress
codes, spirit events and MANDATORY halloween costume and cubicle decorating
contests. They drove company Porsches and took private jets to golf
tournaments with clients. When they brought in the daughters boyfriend got
brought in to be the biz dev guy, who also went to USC and also had no
experience other than being the "biz dev" guy of his father's chain of
carwashes... He told me one day he was going to "dev the shit out of some biz"
.... I put in my notice. I think I still have PTSD from working there.

------
pedalpete
This is poignant for me as tomorrow I'll be speaking to my boss about my
current title compared to what I actually do, and the accompanying wage.

I've clearly laid out what I've done in the last 6 months and how it has
benefited the company (justifying the change) and what I have planned in the
upcoming 6 months, to show him what he will be getting from me.

BKO mentions you should 'setup a plan', but I'd suggest putting that on the
employees shoulders. If they are asking for the title and salary, let them
know you're not against giving it to them, but have them explain what they
have done in the last X months to feel they deserve it, and/or what they plan
to do.

From there, you can discuss what your expectations would be of somebody in
that position with that title. You can then help them fill the gap. But I
think having the employee do the introspection first might bring to light
where the employee sees their value.

------
leepowers
It's hard to say no, especially to someone you work with everyday. So find a
way to arrive at a "yes" that benefits both the company and the employee.

Fortunately you have several factors in your favor, and potential strategies
to getting to "yes".

1) It's A Startup - resources are scarcer than a larger, more established
company. Any employee who works at a startup should understand this.

2) No Process - there's no formal process for handing out promotions. Co-opt
his self-interest to craft a process that treats employees and the company
fairly. As a side benefit this will force him to think of the company's needs
in addition to his own.

3) It's A Startup Redux - working for a startup often means sacrificing short-
term gains for a long-term payoff. Structure any promotion so that while an
employee may not get as much now they have an opportunity to earn much more in
the future. (Usually, this comes in the form of stock options with a vesting
cliff).

4) DIY - in a startup the best way to get a promotion is to build it yourself.
A single Google worker is unlikely to move the needle on Google's
profitability, either up or down. A startup employee can have a much greater
impact. Inventing or improving a feature. Helping expand into a new market.
Creating a process that saves every other employee an hour each day. These are
all huge gains that can improve profits, either presently or down the road.
Find the metrics to measure each employee's contributions and reward them
appropriately.

------
nostrademons
This is why companies put in place formal policies for hiring, firing, and
promotions. If you give in to this one instance, you've set a bad precedent
that will have the rest of your employees soon coming to you for inflated
salaries & titles.

You should be able to precisely define what it looks like to perform each job
function at a given compensation/title level. That way, when a person comes to
you looking for a raise or promotion, you can say "Well, these are the skills
you will be evaluated on and the expectations for what you can do to earn
that, and this is the process and timetable for this evaluation. Get to work."
And ideally, you'll have built the process with employee input so that
everybody buys into it, and sucking up to anyone person doesn't measurably
change your chances of being promoted.

~~~
codeonfire
Formal policies are meaningless. Management is an unregulated group.
Inexperienced people will learn their lesson when they go through all those
skills and expectations and nothing happens. The job market is the only real
test of who is valuable and who is full of it.

------
sharemywin
I'm assuming the title doesn't exist now and you want to hire form the outside
with more experience. Just realize your probably not going to keep this
person. They probably feel they are doing the job they are asking for(right or
wrong).

------
joshmn
Be honest. But not too honest (like showing them this post).

Lay out the (not "a", but "the") roadmap that would define what they think
they're worth. Make it clear and transparent.

Use lingo like "next level" and "investment" and "personal development". Be
super positive.

If you're small enough, and you think it's worth the investment (in this
individual), touch base regularly about the roadmap you laid out and how you
think they're progressing. Be ready to come with concrete, factual stuff, too.

------
philip1209
What I learned at our last company that I'm applying to our 4-person company:

1) Set up performance reviews and tie them to salary reviews every 6 months.
It sounds very corporate-y, but it sets a cadence. People know when their
compensation is up for review.

2) Talk about salary/title/equity expectations before performance reviews.
Then, during performance reviews, if your grant differs from the expectations,
it's a time to set objective for how to achieve those goals during the next
round of raises.

------
zer00eyz
Its about how you state it:

Instead of saying "no fucking way you can't do that job", You say "at this
time were going to have to refuse this request", "here is the things your good
at today (elaborate on list of items), You need to keep that up and do the
following if you want me to give you that title and raise (give list)"

The problem might be you, not them. They may see needs you haven't identified
yet, and aren't articulating them well. You may also have currently unstated
expectations that you can get out on the table too. Lots of people are happy
having a plan/path and might reach for it if they see it is possible.

There may be other mitigating factors in the ask that you aren't stating or
aren't making us aware of as examples:

\-- Are they asking for a role your hiring for?

\-- Do they have life changing events going on that your unaware of, and a
need for increased compensation?

\-- Are you below market on pay, and pushing equity as an alternative? Stock
options and free lunches don't mean shit if you have a sick family member or a
kid on the way.

~~~
bko
> Do they have life changing events going on that your unaware of, and a need
> for increased compensation?

I disagree that personal circumstances should be a factor in making managerial
decisions. It's not fair to the other employees, company or investors. If you
feel strongly enough to intervene, you should do so on a personal level (offer
to lend the person money with no expectation of having him return it, let him
crash on the couch, etc) because the other employees and investors may not
share the same values as you and you need to act in their interest.

~~~
michaelbuddy
It's a valid disagreement, but compensation is arranged so the employee is
getting the least amount possible the company can get away with paying.
Exceptions exist, but generally, if somebody needs more money and you're
already paying them the least amount you can, it's time to look at losing him
/ her vs paying more to keep somebody reliable. It's expensive to rehire, more
expensive in almost every case plus risky.

~~~
bko
I agree that if you need to pay them more to keep them and they're worth it,
you should. I think the argument that employers pay employees the minimum
amount is true on the surface, but it is too cynical and unrealistic. The firm
isn't "getting away" with anything same as you're not "getting away" with a
wage/working conditions higher than your next best alternative. You're engaged
in a mutually beneficial agreement, although the gains may not be evenly
distributed among parties.

Economist Ronald Coase had an interesting perspective as to why firms exist:

> Mr Coase argued that firms make economic sense because they can reduce or
> eliminate the “transaction cost” of going to the market by doing things in-
> house. It is easier to co-ordinate decisions. At the time, when
> communications were poor and economies of scale could be vast, this
> justified keeping a lot of things inside a big firm, so carmakers often
> owned engine-makers and other suppliers.

So paying someone no more than you have to would be the model of purchasing
contract work rather than decisions made in the firm. In the firm, you accept
some inefficiencies in order to minimize transaction cost, including those
associated with finding, vetting and hiring a new employee.

[0] [http://www.economist.com/news/leaders/21584985-anyone-who-
ca...](http://www.economist.com/news/leaders/21584985-anyone-who-cares-about-
capitalism-and-economics-should-mourn-death-ronald-coase-man)

