Ask HN: Reduced salary during the first 3 months of work?

[lzm]

I'm about to graduate from university and I've been offered a job at a small startup. They're offering me a little less than half of what I expected to earn, with an agreement that 3 months from now we'll negotiate a proper salary based on my performance.

Is this common practice? I feel that the reduced pay will cause lower job satisfaction, and the uncertainty of my future salary unnecessary pressure and stress. What do you think?

[param]

Been there, done that. Do not get into this unless you are comfortable that:

1. There is an objective way to measure your performance

2. That way does not depend on any team level/company level objectives like finalizing a business model, completing a prototype, making a sale, getting funded - as a fresh grad, you will have little to no impact on any of these, and so you should neither be rewarded nor penalized for these

3. The current finances and burn rate of the startup makes you feel comfortable that the company will have the money to make the upgrade without hitch.

4a. You have absolute trust in the founders that they will stick to their word

4b. get the criteria in a contract

on second thoughts, if 4a is not true, you shouldn't join the startup anyway - startups have a lot more dependent on the founders being moral rather than a large company where everything is process driven.

Also, if you have to go the 4b route, you will potentially leave them with ill feeling towards you ('this guy doesn't even trust us'). Meaning you wouldn't/shouldn't get hired.

[patio11]

Is there any upside to you in this? Seriously.

Three months from now, you'll have a "negotiation" where you've already compromised your perceived value (they've already had the milk for free, how much could the cow possibly be worth), and the BATNA on the negotiation is your pick of grossly underpaid or unemployed.

This is not common practice among organizations which do not exploit their employees. You can do better than this job.

[exline]

Don't do it. Less than half is a more than a reduced salary. That's a major cut. After 3 months do you get any compensation for the first 3 months of reduced pay?

Even in tough economic times like now, I would not take the offer unless I had nothing else. Its hard enough to work at a startup without this added stress.

I believe that employees are absolutely critical to the success of a start up and I can't image that this start up is going to attract the best and brightest to work there with this attitude. I suspect that no matter how you perform, after 3 months, they will try to keep you salary low because they have already undervalued your contribution in the first 3 months.

What we do is to offer a short term contract during which we pay them normal contract rates, but we have the option of not hiring them at the end of the contract. No matter what they get paid for their work and if we like them, we bring them on at above industry average rates.

[jim_h]

What is half of what you're expected to earn? Have you asked what range would be 'proper salary based on performance'? Are they doing things that you are interested in? Will you acquire new skills that will be useful in your career?

If you are considering this offer, can we assume that there are few offers at this moment? Depending on your situation/skills/experience, maybe it might be worth giving it a try. 3 months isn't a long time.

[owkaye → jim_h]

> What is half of what you're expected to earn?

That's my question precisely. Maybe your expectations are out of line with reality? The programmers I used to manage overseas certainly had this problem. Nearly all of them fresh out of college expected the same salaries as those with 5+ years of real work experience. Graduating from college into the real world is a shocking "reality check" for some students.

[lzm → owkaye]

They offered 1200 BRL/month (about 10K USD/year). A junior engineer is supposed to make at least twice as much over here[1].

They work for foreign clients, and I do have experience with the job (through oDesk/Elance/RAC). I've also published a couple of papers and won several programming contests (I got to the ACM ICPC world finals once). I believe I deserve more.

[1] http://info.abril.com.br/carreira/salarios.shl

[rmc → owkaye]

Yeah lots of students graduate and think they know everything and are worth a lot. Especially computer science graduates.

[ndimopoulos]

I have done this in the past. The reason behind it was to 'help' the company pay less to the recruitment agent and three months later I was to be compensated for the loss of income.

I agreed at the time and yes I was compensated three months later. The issue though was that the company I was working at the time was solid with a lot of capital, so I was not worried that much for not getting paid.

In my view you will have to have a bit of faith in people but you must also do your homework. If the startup is not going to exist in 6 months then don't even bother.

Gather all the evidence you can gather about the job and present that data to your friends/family and ask them their opinion. A fresh perspective can help you a lot.

What is a common practice is for organizations to try and get things for free from the employees. In other words as patio11 pointed out 'exploitation'.

I hope the above helps :)

[hcho]

Run away but punish them when doing so. Tell them you are very excited to join them but negotiate a later start date. 2 days before your start day drop and e-mail and say you'll need another week or something. And on the day you are supposed to start tell them you had a better offer and you'll not be taking their job. Waste their time as much as you can and leave them out in the cold. They are out to exploit inexperienced people, give them a taste of their own medicine.

[owkaye → hcho]

I hope you don't do this, it just drags you down to an unethical level because you "think" they shouldn't pay you half what you expect to earn.

Are you actually worth what you expect to earn? Does the company have a valid reason for offering you less than what you expect? I think these are the questions you should be asking.

I ran an offshore outsourcing company for nearly a decade, and I can tell you something from that experience. The vast majority of applicants were not worth half what they expected. They seem to have come from an environment where they expected to graduate from college and immediately jump into the real world of programming at ridiculous salaries -- simply because they had graduated from college.

The reality was that they had learned a smattering of different languages but they were not proficient in one, so they were little more than "on the job trainees" to me, and in this situation they were lucky that I paid them half of what they "expected".

The bottom line here is that they had ridiculously unrealistic expectations, and they were disappointed to learn their true value in the real world.

It was an eye opening experience for most of them when I wouldn't even consider hiring them because of their lack of capabilities and their failure to perform simple programming tests without books and online references in front of them the whole time.

I'm not suggesting that you're worth less than what you expect, all I'm saying is that in my hiring experience many of my former programming applicants have failed to demonstrate that they are worth their perceived values.

[hcho → owkaye]

Unethical? Get yourself a dictionary. While you look up that word, also look up the words probationary and period if you are in Europe and employment, at and will if in US.