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There are still some leaks in the advice given. One, it might well be that an employee's skill set has suddenly increased in market value, or that the employee has essential knowledge but genuinely has a better offer from a competitor. Telling her to "wait three months until the next review process" will probably lose that employee.

Two, the general tone of the advice is "plan things well in advance" (compensation, structural adjustment etc.). The fact is that you can never plan everything well enough in advance, especially things like structural adjustment. The article doesn't address what to do when your plans inevitably "collapse in the presence of the enemy".

Three, it is a fact that you can't simply fire an executive just because it is obvious to the wiser people in the company that he's incompetent. He will have plenty of friends and will be sure to raise hell for it. This is a sure way to get lots and lots of politics, and of the most unpleasant sort too. Oftentimes, the only reasonable solution is a "structural adjustment" - create a sinecure for the guy where he has few responsibilities and can safely slide into irrelevance.

   -> Telling her to "wait three months until the next review process" will probably lose that employee.
Is that really the kind of employee you want? The minute you cave in, you start setting a dangerous pattern. I guess this is where your leadership skills should come into play and you convince the employee to wait. In the mean time you could perhaps plan to transition the employee to a better role/ add further responsibilities so that she feels like she has gotten something. And come appraisal cycle, you better reward her for sticking by you. Anyway, thats how I would do it.

What "kind" of employee are you referring to? The "kind" that feels they are not fairly compensated for their skills?

Asking someone to wait several months is asking them to place their faith in the fairness of the company and to trust that they will be rewarded for their trust and faith at the "normal" time. An employee's ability to trust in the company is going to be highly dependent on the company's past behavior, make sure your employee's have reasons to trust in you before you ask them to. A company needs to earn this faith, it'd be foolish to expect it blindly.

Also, the employee knows that she will not have the same negotiating advantage when the alternate offer expires. If anything, the whole episode will be a disadvantage by then.

I was referring to the kind that constantly keeps trying to get offers from elsewhere and uses that that to keep renegotiating their pay/ position. Of course you need a trustworthy environment and taking such a stand for everyone might actually build that.

I don't think this is what zeteo was referring to at all.

Haven't you heard? The naive "loyal" employee doesn't exist anymore [1]. Now "permis" are basically contractors that chose company benefits over the extra cash. This means they are a lot more mobile and expect market value for their labor. If you can't react to this then get used to working with people who have lower market value, and replacing them when they're worth more.

They don't owe you anything if they work for you. They're not family. Welcome to the free market. Try not to die.

[1] well, indoctrinated people still do but they're probably not going to leave the place they're currently serving life at

The naive "loyal" employee doesn't exist anymore

Your insertion of the word "naive" makes this difficult to refute. But if I may rephrase by removing that word, I do think that loyal employees exist. I've been with my current employer 14 years with no plans to leave (as have the other 3 managers in my area, plus many employees). My wife has been in her company for 10 years.

There's much more to having a job you enjoy than just pay. Having one free of politics (as is my office) is important to me. Having a team that one gels with is also very important. I'm spending half of my waking life at work: I want to enjoy it.

If one is truly objective then they were covered in my "permis" statement. As you say, money isn't the only concern but one of many. And one can even stay a long time if the current place of employment continues to be the best overall deal.

But "loyal"? This is not rational. You should never be more loyal to some party than that party is to you. If you are then you've been indoctrinated. You've been had. It's fine to work somewhere a long time because you feel it's currently the best place to meet your overall objectives. It's not ok to work somewhere because "you owe them" or "they've been good to me in the past".

Being somewhere 14 years is certainly an "employee smell" if you will. Usually when someone stays that long it's because they have a misplaced sense of "family", believe their market value to be low (they could be correct), etc., etc. Not because they think it's the best overall deal out there.

Only if that employee feels that the compensation policy is not fair to begin with and that that employee does not stand a fair chance of having their skill-set properly evaluated.

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