Time for a Salary Increase?
Mar 25, 2002
Durwood Ryan, CEO of Ryan, Brookhouse, and Springdale, was frustrated. He knew that Jeannie Turtlepup, his structural engineering department head, needed a raise. But he wasn’t getting any support for it from Poppy Buck, the firm’s executive vice president and COO. “Jeannie is not on track to achieve her revenue goals for the year,” said Buck. And being the hard-liner that he was (that’s why he was COO, after all!), he added, “If you don’t hit your goals, you don’t deserve a raise. We are supposed to be about paying for performance and accountability, so I can’t support any raise for Turtlepup.” But Ryan, being a little older and little wiser, disagreed. He felt strongly that goal achievement, while undoubtedly important and something that the firm wanted to reinforce, was not the only criterion for whether someone should get a raise. Here’s some of his thinking: Whether or not Turtlepup achieved her revenue goals was not entirely up to her. The idea that structural engineering was a discrete profit center was a new one to Ryan, Brookhouse, and Springdale. Traditionally, in their firm, structural engineering was completely dependent on architecture. All jobs produced by the firm had architectural project managers up until this year, and the structural department’s revenue was based on sales of work by the architecture group. Turtlepup was making about $20,000 a year less than what they would probably have to pay a replacement. Why not acknowledge that fact and reduce the risk that she could be recruited away from the firm? Turtlepup was an incredibly hard worker and set a great example for everyone else. While she may not have been on the path that everyone else wants to be on, there was just no way to avoid acknowledging that Turtlepup’s average 65-hour work week (with the emphasis on “work”), really helped her pay for herself. Especially considering the fact that she was paid on a straight salary. Turtlepup was a great team player. Whenever there was an issue of helping out a coworker or another department, if there was any way she could do it, Turtlepup was there. She wasn’t one of these people who would hog the revenue or get too wrapped up in the internal bean counting to make sure she got credit. She just did what was right, regardless of how that might make her group look to others and what it did to her own work schedule. Turtlepup was a good corporate contributor. She was personally responsible for creation of the firm’s management training program. She was an active contributor at management meetings. She came up with the firm’s electronic project filing scheme and led the way on implementation. All of this was a bonus and not related to any specific goals that she had set for herself or that had been set by management. The economic climate for what the firm did was awful, yet the firm overall performed very well. Last year, Ryan, Brookhouse, and Springdale had no growth whatsoever. But when you consider that their market specialty was telecom and speculative office buildings, they did pretty well to sustain their volume and make a double-digit profit. And this year so far looked even better. The situation described above is fairly typical. As you can see, there are many factors, besides goal achievement, that may impact whether or not someone gets a raise. So the question is, are you thinking clearly when it comes time to doling out your raise budget? Or are you being overly rigid and putting yourself at risk for the departure of someone (or someones) that you cannot afford to lose? Think about it. Originally published 3/25/2002.
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