Discover more from Mike in NYC
I received the first compensation statement in my professional life in over 8 years last week. Essentially it’s the letter that comes out each year outlining the raise and/or bonus you’re set to receive based on a variety of factors.
In this post, my attempt is to walk you through my thought process leading up to the announcement, my emotions, my retrospection, and everything else in between.
So here we go.
Leading up to the release of the statements, which are obviously individualized, our firm was trying to provide as much transparency as possible given the situation with Covid, which I actually appreciated. Not surprisingly, they announced that both raises and bonuses would be awarded with lower frequency (smaller percentage of people receiving them compared with past years) and they would contain lower amounts.
Because of this, I had curbed my expectations, or so I thought.
My reaction to the release was: disappointment. I recognize that I’m in the fortunate position to even have a job in this climate. In fact, our firm laid off approximately 10% of folks from our consulting group, so clearly complaining about a bonus puts me in a place of privilege. However, it is important to understand your value and whether your compensation (including opportunities) reflects that value. Or at least that’s how I’m justifying this post.
Before I get into the details, I want to be clear that I won’t discuss the bonus. I did get a small bonus that was well below my target, but if I would have received no bonus, I don’t think I would complain. It truly is supposed to be a “bonus” so if you receive one that’s lower than you hoped or non-existent, I feel it’s just living up to its name. Further, the bonus doesn’t have a perpetual effect on your future pay, that’s all driven by your base salary which should also reflect your market value, so I’m going to focus on the base raise.
There are two reasons I was upset with the results of my statement, the first being the fact that I was promoted. In a very flat but hierarchical organization, promotions are where you traditionally receive the largest pay bumps. Getting to that next level is the name of the game in consulting, and really any professional services firms.
They promoted fewer people this year (15% down from a usual 22%), and I was promoted one year earlier than typical for my level, so I was clearly (in some people’s eyes at least) a top performer.
Under the new title, I’m now expected to “perform at the next level”, which makes sense that expectations increase. However, the pay did not with only a 2.5% raise. For context, inflation in the US in 2019 was 2.3%.
All is to say, I truly believe had I not been promoted, I would have understood and been reluctantly content with a 0% raise and 0% bonus as clearly Covid has had an impact on the performance of the business. But to be given a promotion with essentially no increase in pay seemed harsh. If they didn’t have money to support promotions (and pay those promoted at the market value for those new positions) why bother with the promotions? During an already stressful work environment, I now catch myself holding some resentment each time I’m performing tasks at this new level.
The second reason for disappointment is towards myself. When I took this job I knew very little about the make up of a professional services firm, which I’ve written about. The posting I actually applied for was for the level I just got promoted to. For good reason, the firm generally brings people in one level below where they could reasonably perform. This does make sense as it takes time to get acclimated to the firm, build a network, and understand how things are done, particularly if you’ve never worked in consulting before.
My frustration comes with my lack of research and blind trust. When HR brings you in one level below and says “but you can get promoted next year”, that can have a significant impact on your compensation for the rest of your time at the firm. I know I would always tell people, no matter what the job, to negotiate hard at the time of receiving your offer letter because you’ll never have as much leverage or opportunity again. But I didn’t follow my own advice, and at a huge consulting firm, it’s even more important. The HR person that told me I could be promoted in a year wasn’t the same person actually deciding my promotion. Similarly, the people deciding my promotion weren’t necessarily deciding on the compensation. Once you’re in the system, you’re part of a giant web that leaders are trying to balance and it’s very difficult to have your own personal “story” dealt with - again, understandably. So while I was promoted, and the new title can look okay on LinkedIn, my pay remains (basically) at the level I initially accepted 18 months ago, which at the time was a step below what I’d applied for.
Okay that was a big rant, but hopefully you’re still with me. There’s nothing I hate more (especially when I’m the perpetrator) than complaining. If you don’t like something, then change it, right?
I’m even more disappointed because I’ve prided myself on really not caring about compensation in the past. Salaries were always tight when running our company for seven years, and I was a firm believer that we were enjoying it so it didn’t matter as long as you could put a roof over your head. I also am a fan of minimalism, not needing many material things to remain happy. So complaining about compensation seems like the biggest waste of time and moves me close to a category of people for whom I genuinely feel sad.
First - I need to accept where I’m at, what I’ve earned, and move on. Going through tasks each day with resentment and a little voice in the back of my head is no way to spend time during an already stressful job.
Second - I need to actually determine my value. Plenty of information out there to figure out where I stand compared to peers, so that will give me an empirical leg to stand on.
Third - start finding other aspects of the job that I enjoy. I’ve said before that this has become increasingly difficult during Covid, but it’s super important. Whether it’s scheduling more Zoom calls with friends at the firm to replace in-person coffee runs, or volunteering for groups with people I enjoy working with, I need to start finding value outside of a paycheck in the post travel/hotel/team room/comped meals world where I found that so simple.
Again - employed in the US when millions file for unemployment every week - I’m a lucky guy. But I’d welcome any thoughts on this - have you had a financial result that didn’t match performance or value? How did you handle it?
Thanks for reading my whining,