Author: Liz Codd
Dear Liz,
I run a UK equity research team at a global asset management firm. I have been with the firm for almost my entire career. I recently found out that a colleague at a similar level is making a lot more money than I am. The colleague came from another firm, and negotiated a strong package at the time of recruitment. I want to do the same before my own annual review. Should I let my employer know that I am aware of what my colleague is making? How should I go about achieving a significant pay rise without acrimony?
Dear Reader,
I'd like to thank you for your question because the situation you have described is not uncommon but as you have recognised, it needs to be handled with care in order to avoid any negative impact on you. My advice is not to make any reference to your new colleague and the reason for this is that some organisations have a clause in the employment contract that employees must not discuss their compensation with colleagues. And even if your employment contract doesn't have this clause, many organisations frown on employees discussing compensation.
There is, of course, a risk in bringing up an issue with your compensation as it may not be possible to know how it will be received. One suggestion I have is to give some consideration to how your organisation typically deals with individuals requesting an increase, and how you think your manager will react to a request. What can you glean from your understanding of the culture and the degree of transparency and openness to such a discussion about compensation? Your approach should be informed by the values of your organisation around this topic. Some organisations are opaque around the whole subject of compensation and others are much more transparent. This will provide the context for any conversations you have.
Assuming you have decided to go ahead and raise this issue, it's a good idea to prepare some data to support your request for an increase (without referencing the compensation of colleagues). Gather market data from multiple sources based on your job title or grade - there are often salary surveys available online and recruitment companies can be a useful source as well. It's important to construct a rational and objective analysis and not be tempted to inflate the level of your role as this will undermine your case. When you are ready with the analysis and the data, consider approaching the conversation in a couple of steps. For example, the first time you raise it you might say to your manager that you would like to have a conversation about your compensation and leave it at that. Flagging that you would like to talk about compensation avoids putting your manager on the spot and you will also get the opportunity to gauge their reaction to raising the topic. Depending on their reaction you can then decide how to approach the conversation requesting an increase.
I do think it's important to feel that we're being paid fairly and to give our organisation the opportunity to explain the compensation philosophy. I hope that the conversations you have result in a good outcome.
Liz
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