How to Deal with Incoming Low Ball Promotion Offer

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Patzer
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How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

I am an manager and currently make X. I took a promotion quite some time ago, and am only going to finally get the raise in September to move up to 1.15X. I am doing well and on the path to become a Director and make 1.45-1.6X within 3 years if I stay the course, because I have a rock solid reputation.

A SVP asked to meet with me and asked me to run a new department we are creating. The nature of this department is that it will be lower paying.
I laid out my current career path, and why it didn't really make sense for me to take on the challenge.
We discussed it and we agreed that I would be a good fit to lead the department, but that the title would have to be a Director level title and come with Director level pay in order for it to be a good career move for me.

They agreed, and frankly, I thought they would come back with something like 1.35X and I would have to negotiate up to 1.45X. Enough to make it worth it.

I hear that the offer that is being prepared is for 1.2X. Obviously, I am going to say no to that.

My question is, do I try to intervene now, and send them an email reminding them of my salary expectations, or do I wait until they present the terrible offer.

Reaching out to remind them of my salary expectations might be seen as too aggressive... but trying to negotiate up from 1.2X to 1.45X is going to be very hard.

Updated
viewtopic.php?p=6241834#p6241834
If you don't want to read the long post, we settled on 1.36X.
Last edited by Patzer on Thu Sep 23, 2021 11:26 pm, edited 3 times in total.
soitgoes2
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by soitgoes2 »

I would wait until you have the offer in hand. I would also consider updating my resume. A lot of people are getting reward from switching employers right now.
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riverant
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by riverant »

I would wait for the offer but also maybe adjust your expectations. Is there a salary band for the director role? Since your leapfrogging to get there and they’re probably basing the offer on your current salary, id expect to be on the low end of the band. Since 1.45 was your minimum in three years, you might want to make 1.35-.4 your target. Depending on your current salary, a 40% raise might be a stretch.

Either way, trust your instinct about reaching out. It’d make you look weird… as is, they’ll look weird if they only give you a 4% raise from what you’ll be getting in September anyways
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Jack FFR1846 »

I think it's time to reach out and see what else is out there. Going in with nothing, and saying you want anything more needs leverage. I suppose you could say that you're not willing to leave your current position for the money offered, but that could set you up for automatic pass over with future opportunities.

Do you know how this is handled with other promotions of others? I once worked at a company where the company policy was that nobody received raises when promotions occurred. Later, when the promoted person proved themselves, they then were given appropriate raises.
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8foot7
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by 8foot7 »

100% do not intervene before the offer is made.

- Before the offer is made, you don't have an offer. You got nothing!
- It is unreasonable to expect a 35-40%+ pay jump on an internal promotion.
- Your information could be bad and it could make you look antsy and motivated by the wrong thing.
- Your assessment of director-level pay could be incorrect or it may be more nuanced than you realize, with a scale and banding that's a little more subtle than you might be aware.
- You already knew this was a lower-paying department ("The nature of this department is that it will be lower paying") and they are offering you more money ("hear that the offer that is being prepared is for 1.2X") than you were going to get on your original track ("only going to finally get the raise in September to move up to 1.15X"), if I read correctly.
- It may not even be an offer. It may be "this is your new title, job description and salary, and you start next Monday." To reject may be to end your employment.

Wait to see what happens and decide only when you have the actual information.
Last edited by 8foot7 on Wed Aug 25, 2021 2:12 pm, edited 1 time in total.
Big Dog
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Big Dog »

They agreed, and frankly, I thought they would come back with something like 1.35X and I would have to negotiate up to 1.45X.
IMO, a 45% increase to take on a new assignment is not realistic. The offer of 20% makes more sense to me. If ou take the job, turn this new venture into a cash machine, adn they reward you well, i.e., put in some nice bonus upside based on performance.
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galawdawg
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by galawdawg »

8foot7 wrote: Wed Aug 25, 2021 2:06 pm 100% do not intervene before the offer is made.

- Before the offer is made, you don't have an offer. You got nothing!
- It is unreasonable to expect a 35-40%+ pay jump on an internal promotion.
- Your information could be bad and it could make you look antsy and motivated by the wrong thing.
- Your assessment of director-level pay could be incorrect or it may be more nuanced than you realize, with a scale and banding that's a little more subtle than you might be aware.
- You already knew this was a lower-paying department ("The nature of this department is that it will be lower paying") and they are offering you more money ("hear that the offer that is being prepared is for 1.2X") than you were going to get on your original track ("only going to finally get the raise in September to move up to 1.15X"), if I read correctly.
- It may not even be an offer. It may be "this is your new title, job description and salary, and you start next Monday." To reject may be to end your employment.

Wait to see what happens and decide only when you have the actual information.
Sound advice...
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ClevrChico
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by ClevrChico »

I've seen promotions be 7 - 10%. I've never seen or heard of anything close to the numbers you're wanting.

Maybe if this is a multiple step promotion? It still seems like a lot.
TheLaughingCow
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by TheLaughingCow »

ClevrChico wrote: Wed Aug 25, 2021 2:18 pm I've seen promotions be 7 - 10%. I've never seen or heard of anything close to the numbers you're wanting.

Maybe if this is a multiple step promotion? It still seems like a lot.
Wow, 7-10% for a promotion?

That seems extremely low.

I would be expecting 20% minimum for a step up in responsibilities.

7-10% seems more like the raise I would expect every year or 2 for loyalty to the company and the increased competence which comes with experience. (i.e. for time in service rather than grade)
Last edited by TheLaughingCow on Wed Aug 25, 2021 2:24 pm, edited 1 time in total.
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galawdawg
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by galawdawg »

And in another thread where a Boglehead was similarly deciding how to handle a possible promotion, you responded
Patzer wrote: Thu May 27, 2021 9:20 am The question is... how much of a raise would you have to get for it to be worth it?
Obviously 5% is not enough.
If there answer is something reasonable like 15-20%, just ask for it.

You aren't saying "no" to the promotion, you are just putting a price on the work.
Businesses put a price on things all the time, no reasonable manager is going to be offended by you asking to be paid more.
They might not agree with the request, but it's completely fine to ask.
You may want to give thought to whether your opinion in that thread about the appropriate range of a raise to accompany a promotion was, objectively, more reasonable.
Jags4186
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Jags4186 »

TheLaughingCow wrote: Wed Aug 25, 2021 2:22 pm
ClevrChico wrote: Wed Aug 25, 2021 2:18 pm I've seen promotions be 7 - 10%. I've never seen or heard of anything close to the numbers you're wanting.

Maybe if this is a multiple step promotion? It still seems like a lot.
Wow, 7-10% for a promotion?

That seems extremely low.

I would be expecting 20% minimum for a step up in responsibilities.
Most promotions aren’t step up in responsibilities. Most people are already doing XYZ job and then are getting the promotion after the fact. Perhaps if you’re going from IC to managing a department, thats an obvious step up in responsibility. But if it’s just a matter of going from XYZ to senior XYZ, or if your titles are linked to a certain amount of business managed, then its just a title change.
TheLaughingCow
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by TheLaughingCow »

Jags4186 wrote: Wed Aug 25, 2021 2:24 pm
TheLaughingCow wrote: Wed Aug 25, 2021 2:22 pm
ClevrChico wrote: Wed Aug 25, 2021 2:18 pm I've seen promotions be 7 - 10%. I've never seen or heard of anything close to the numbers you're wanting.

Maybe if this is a multiple step promotion? It still seems like a lot.
Wow, 7-10% for a promotion?

That seems extremely low.

I would be expecting 20% minimum for a step up in responsibilities.
Most promotions aren’t step up in responsibilities. Most people are already doing XYZ job and then are getting the promotion after the fact. Perhaps if you’re going from IC to managing a department, thats an obvious step up in responsibility. But if it’s just a matter of going from XYZ to senior XYZ, or if your titles are linked to a certain amount of business managed, then its just a title change.
OP said he would be going from manager to director. To me that implies a definite move up in the organizational structure and a large bump in responsibility.
Mr.Chlorine
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Mr.Chlorine »

Have you already agreed on the 1.15X salary for September? So this is a second promotion on top of that or a replacement promotion that skips the promotion you got some time ago?
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Kenkat
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Kenkat »

I think they are looking at it from the perspective of you are currently making X and they are offering you a 20% increase to 1.2x.

You are looking at it from the perspective that you got promoted and never got a raise; it won’t be until September that you will be making 1.15 (which you should have been making all along). So to you, a reasonable offer would be 10-20% more than 1.15x, not x - or in the 1.3x range. So that is the angle I would work - but only after receiving their actual number.
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AllMostThere
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by AllMostThere »

I understand your concern and can relate. No, do not say anything now. Wait until the offer is made and then negotiate up as far as you can obtain using the position suggested by Kenkat. If salary negotiation goes well then nothing to worry about. If you are not pleased with result, stay silent and accept the position. You are now positioned well at a higher pay to investigate other external options for better pay and organizational role. Now is great time to move, if so inclined. Many employers would be happy to have you, so sometimes it's best to vote with your feet. Good luck. :beer
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Normchad
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Normchad »

Wow. I think if I reacted like this to opportunities from my employer, they’d fire me and find somebody else to fill the roles.
oilrig
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by oilrig »

If you are going from Manager to Director, then I assume you will get a higher target bonus + possible stock options? Im sure you are doing this already, but dont just look at your base salary, look at the total compensation. With the bonus and stock options your pay could be much higher than where you are at now.

I agree with everyone else that a 45% increase in salary is probably not realistic.
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by fortunefavored »

Agreed with everyone else.. more than a 10-15% raise in a single jump is very very difficult to get past HR. What can happen is that puts you into the compensation range of 85% of the typical director.. then you will get multiple, outsized raises going forward to catch you up to 100%. But that could take a couple of cycles.

Megacorp compensation structures are DESIGNED to slow compensation growth. That is literally the point of why they are so rigid. For most companies, this is how they can project their EPS confidently going forward, etc. Headcount is their #1 expense.

The fastest way to more money is to take the job/title and go interview some where else and make 50% more right off the bat.
HomeStretch
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by HomeStretch »

Are there any additional benefits aside from salary associated with being promoted to the Director level, such as higher bonus %, equity compensation awards, etc.?

There is likely value in having the title of “Director” now (rather than maybe in 3 years) should you decide to ‘test the waters’ for positions outside of your company in 6-12 months.

It’s good that you are thinking about what to do/say if the promotional salary increase is less than expected. But don’t overthink it until you actually hear the amount of the actual increase. Maybe the 1.2 promotional raise is calculated off your 1.15 salary already agreed to for your current role. In some companies, the job change wouldn’t be an “offer” and you don’t have the option to refuse or have recourse if you are terminated for saying “no” (unless you have an employment agreement that includes a ‘material change in duties’ type clause). Some companies will accept a “no” but it can be career limiting.
Last edited by HomeStretch on Wed Aug 25, 2021 3:16 pm, edited 2 times in total.
surfstar
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by surfstar »

Reality check:
  • Today's Date: 8/25 - it is not September - do you have your 1.15x offer in hand? Or was that never realized?
  • 1.2x > 1.15x > x
Seems like an uphill battle.
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by TomatoTomahto »

Normchad wrote: Wed Aug 25, 2021 2:57 pm Wow. I think if I reacted like this to opportunities from my employer, they’d fire me and find somebody else to fill the roles.
IME, some low paid ICs think like this, and I guess it’s what they hear from their peers. When you move up the ranks, I don’t think anyone I know has ever expectrd a quid pro quo for taking on a stretch opportunity. Do a good job and the money shows up.
I get the FI part but not the RE part of FIRE.
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Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

8foot7 wrote: Wed Aug 25, 2021 2:06 pm 100% do not intervene before the offer is made.

- Before the offer is made, you don't have an offer. You got nothing!
- It is unreasonable to expect a 35-40%+ pay jump on an internal promotion.
- Your information could be bad and it could make you look antsy and motivated by the wrong thing.
- Your assessment of director-level pay could be incorrect or it may be more nuanced than you realize, with a scale and banding that's a little more subtle than you might be aware.
- You already knew this was a lower-paying department ("The nature of this department is that it will be lower paying") and they are offering you more money ("hear that the offer that is being prepared is for 1.2X") than you were going to get on your original track ("only going to finally get the raise in September to move up to 1.15X"), if I read correctly.
- It may not even be an offer. It may be "this is your new title, job description and salary, and you start next Monday." To reject may be to end your employment.

Wait to see what happens and decide only when you have the actual information.
My expectation is not a 35-40% pay jump.
I already have 15% coming next month from a promotion a year ago, that is finally getting paid out. Cuz COVID.
So, I am expecting a 20-25% jump for a move from Manager to Director, which is totally reasonable.
My assessment of director level pay is correct, because 6 other Directors have told me their pay.

Yes, the nature of the other department is that is pays less, which is why I was initially resistant to taking the role at all.
I made that explicitly clear to the SVP and thought we had reached an understanding, but clearly I was wrong. The 1.2X raise, amounts to a 5% raise, over what I will make next month if I do nothing. The new position will have 4 times as many people reporting to me. It's not worth it.

Jack FFR1846 wrote: Wed Aug 25, 2021 2:06 pm I think it's time to reach out and see what else is out there. Going in with nothing, and saying you want anything more needs leverage. I suppose you could say that you're not willing to leave your current position for the money offered, but that could set you up for automatic pass over with future opportunities.

Do you know how this is handled with other promotions of others? I once worked at a company where the company policy was that nobody received raises when promotions occurred. Later, when the promoted person proved themselves, they then were given appropriate raises.
I started seeking external offers last week, and have gotten 4 interview requests so far, but I have never used an external offer to force anyone's hand. I feel like it is damaging to the relationship.
Company policy is that I should get a raise of up to 20% with the promotion (it can go higher, but requires CFO approval), and I can only guess this crappy offer is because my pending 15% raise hasn't gone through yet. 1.15 x 1.2 = 1.38X, hence my expectation of a 1.35X Offer.
ClevrChico wrote: Wed Aug 25, 2021 2:18 pm I've seen promotions be 7 - 10%. I've never seen or heard of anything close to the numbers you're wanting.

Maybe if this is a multiple step promotion? It still seems like a lot.
I am in tech... when my boss got moved up from Manager to Director he got a 42% raise.
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Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

galawdawg wrote: Wed Aug 25, 2021 2:23 pm And in another thread where a Boglehead was similarly deciding how to handle a possible promotion, you responded
Patzer wrote: Thu May 27, 2021 9:20 am The question is... how much of a raise would you have to get for it to be worth it?
Obviously 5% is not enough.
If there answer is something reasonable like 15-20%, just ask for it.

You aren't saying "no" to the promotion, you are just putting a price on the work.
Businesses put a price on things all the time, no reasonable manager is going to be offended by you asking to be paid more.
They might not agree with the request, but it's completely fine to ask.
You may want to give thought to whether your opinion in that thread about the appropriate range of a raise to accompany a promotion was, objectively, more reasonable.
I think you misread my post.
I am already getting 15% that is finally coming a year late, for the position I have been doing for a year.
So, a 20% raise off my current salary is a 5% raise over what my pay will be next month, if I do nothing. In other words, it's a crappy offer.

So, following my own advice, I will say no to 5% and ask for 15-20%
1.15 x 1.15 = 1.32
1.15 x 1.2 = 1.38
So, I need a total raise, to catch me up from my last promotion and for the new promotion of 32-38% percent to be following my own advice of 15-20% for a promotion.
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ClevrChico
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by ClevrChico »

Patzer wrote: Wed Aug 25, 2021 3:14 pm
ClevrChico wrote: Wed Aug 25, 2021 2:18 pm I've seen promotions be 7 - 10%. I've never seen or heard of anything close to the numbers you're wanting.

Maybe if this is a multiple step promotion? It still seems like a lot.
I am in tech... when my boss got moved up from Manager to Director he got a 42% raise.
I'm in tech, too. IC's can make more than managers. Leadership positions don't automatically mean outsized earnings.

It sounds like the director title was OP's idea and not the company's. Best of luck!
Last edited by ClevrChico on Wed Aug 25, 2021 3:23 pm, edited 2 times in total.
Topic Author
Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

Mr.Chlorine wrote: Wed Aug 25, 2021 2:32 pm Have you already agreed on the 1.15X salary for September? So this is a second promotion on top of that or a replacement promotion that skips the promotion you got some time ago?
It's a second promotion on top of that.
Last edited by Patzer on Thu Sep 23, 2021 11:32 pm, edited 1 time in total.
Topic Author
Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

fortunefavored wrote: Wed Aug 25, 2021 2:59 pm Agreed with everyone else.. more than a 10-15% raise in a single jump is very very difficult to get past HR. What can happen is that puts you into the compensation range of 85% of the typical director.. then you will get multiple, outsized raises going forward to catch you up to 100%. But that could take a couple of cycles.

Megacorp compensation structures are DESIGNED to slow compensation growth. That is literally the point of why they are so rigid. For most companies, this is how they can project their EPS confidently going forward, etc. Headcount is their #1 expense.

The fastest way to more money is to take the job/title and go interview some where else and make 50% more right off the bat.
Sadly, I think you are correct. I don't really want to leave though. I want to keep doing work I love and get paid correctly for it.
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Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

surfstar wrote: Wed Aug 25, 2021 3:09 pm Reality check:
  • Today's Date: 8/25 - it is not September - do you have your 1.15x offer in hand? Or was that never realized?
  • 1.2x > 1.15x > x
Seems like an uphill battle.
I was told last week it would be on my Sept 1st paycheck, so why would I pretend a salary increase I am getting in a few days isn't going to happen and not consider it in my offer?
I wish people could answer my actual question, which was whether I should reach out before the offer is delivered or negotiate once it arrives.

Instead, of commenting on if they think, that I deserve to get paid for the work I do.
ZMonet
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by ZMonet »

As I read it, most people are saying not to reach out before you have the offer. I see ZERO upside to reaching out beforehand. You'll appear desperate and aggressive -- not a good look.
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by fortunefavored »

Patzer wrote: Wed Aug 25, 2021 3:25 pm
fortunefavored wrote: Wed Aug 25, 2021 2:59 pm Agreed with everyone else.. more than a 10-15% raise in a single jump is very very difficult to get past HR. What can happen is that puts you into the compensation range of 85% of the typical director.. then you will get multiple, outsized raises going forward to catch you up to 100%. But that could take a couple of cycles.

Megacorp compensation structures are DESIGNED to slow compensation growth. That is literally the point of why they are so rigid. For most companies, this is how they can project their EPS confidently going forward, etc. Headcount is their #1 expense.

The fastest way to more money is to take the job/title and go interview some where else and make 50% more right off the bat.
Sadly, I think you are correct. I don't really want to leave though. I want to keep doing work I love and get paid correctly for it.
That's what they count on. The vast majority of people WON'T jump.. so in aggregate.. that is how they are controlling headcount costs at a macro level.

If you're a superstar (top 1-3% of performers in the company) - they WILL counter offer your 50% external offer.. but only when you have that offer in writing.
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by rascott »

Normchad wrote: Wed Aug 25, 2021 2:57 pm Wow. I think if I reacted like this to opportunities from my employer, they’d fire me and find somebody else to fill the roles.
In the current job market? It would take an IQ of about 12 to fire a good performing employee right now.
rascott
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by rascott »

fortunefavored wrote: Wed Aug 25, 2021 3:37 pm
Patzer wrote: Wed Aug 25, 2021 3:25 pm
fortunefavored wrote: Wed Aug 25, 2021 2:59 pm Agreed with everyone else.. more than a 10-15% raise in a single jump is very very difficult to get past HR. What can happen is that puts you into the compensation range of 85% of the typical director.. then you will get multiple, outsized raises going forward to catch you up to 100%. But that could take a couple of cycles.

Megacorp compensation structures are DESIGNED to slow compensation growth. That is literally the point of why they are so rigid. For most companies, this is how they can project their EPS confidently going forward, etc. Headcount is their #1 expense.

The fastest way to more money is to take the job/title and go interview some where else and make 50% more right off the bat.
Sadly, I think you are correct. I don't really want to leave though. I want to keep doing work I love and get paid correctly for it.
That's what they count on. The vast majority of people WON'T jump.. so in aggregate.. that is how they are controlling headcount costs at a macro level.

If you're a superstar (top 1-3% of performers in the company) - they WILL counter offer your 50% external offer.. but only when you have that offer in writing.

Bingo.

OP..... if you want 1.5x+.... you need to leave. Sadly that's the only way to really increase your comp these days.
rascott
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by rascott »

Patzer wrote: Wed Aug 25, 2021 3:22 pm
Mr.Chlorine wrote: Wed Aug 25, 2021 2:32 pm Have you already agreed on the 1.15X salary for September? So this is a second promotion on top of that or a replacement promotion that skips the promotion you got some time ago?
It's a second promotion on top of that.
I took that promotion a year ago, have done that job for a year and absolutely killed it.
I am only now getting the 15% from that promotion.
So, an offer of 20% more than my current base, is only an offer of a 5% raise to move from Manager to Director, which is a joke.
I told one other manager about the offer, and he literally started laughing on our Zoom call.
Your company sounds cheap as heck, and you have let them walk all over you. Promote someone and then give them the raise that goes along with it a year later! All for a whopping 15%? Good grief.
Last edited by rascott on Wed Aug 25, 2021 3:46 pm, edited 1 time in total.
Dottie57
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Dottie57 »

TomatoTomahto wrote: Wed Aug 25, 2021 3:12 pm
Normchad wrote: Wed Aug 25, 2021 2:57 pm Wow. I think if I reacted like this to opportunities from my employer, they’d fire me and find somebody else to fill the roles.
IME, some low paid ICs think like this, and I guess it’s what they hear from their peers. When you move up the ranks, I don’t think anyone I know has ever expectrd a quid pro quo for taking on a stretch opportunity. Do a good job and the money shows up.
This.
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Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

rascott wrote: Wed Aug 25, 2021 3:43 pm
fortunefavored wrote: Wed Aug 25, 2021 3:37 pm
Patzer wrote: Wed Aug 25, 2021 3:25 pm
fortunefavored wrote: Wed Aug 25, 2021 2:59 pm Agreed with everyone else.. more than a 10-15% raise in a single jump is very very difficult to get past HR. What can happen is that puts you into the compensation range of 85% of the typical director.. then you will get multiple, outsized raises going forward to catch you up to 100%. But that could take a couple of cycles.

Megacorp compensation structures are DESIGNED to slow compensation growth. That is literally the point of why they are so rigid. For most companies, this is how they can project their EPS confidently going forward, etc. Headcount is their #1 expense.

The fastest way to more money is to take the job/title and go interview some where else and make 50% more right off the bat.
Sadly, I think you are correct. I don't really want to leave though. I want to keep doing work I love and get paid correctly for it.
That's what they count on. The vast majority of people WON'T jump.. so in aggregate.. that is how they are controlling headcount costs at a macro level.

If you're a superstar (top 1-3% of performers in the company) - they WILL counter offer your 50% external offer.. but only when you have that offer in writing.

Bingo.

OP..... if you want 1.5x+.... you need to leave. Sadly that's the only way to really increase your comp these days.
I can't disagree.. When I left my last company, I was only leaving for a small raise, but really excited about the new opportunity.
My old company tried to counter offer, and when I said no amount of money would make me stay, they came back to me with an offer of a 70% raise.
I turned that down.

It feels wrong to seek out offers I am not willing to leave for, just to use against my current company, but I am probably being naive.
Normchad
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Normchad »

Patzer wrote: Wed Aug 25, 2021 3:49 pm
rascott wrote: Wed Aug 25, 2021 3:43 pm
fortunefavored wrote: Wed Aug 25, 2021 3:37 pm
Patzer wrote: Wed Aug 25, 2021 3:25 pm
fortunefavored wrote: Wed Aug 25, 2021 2:59 pm Agreed with everyone else.. more than a 10-15% raise in a single jump is very very difficult to get past HR. What can happen is that puts you into the compensation range of 85% of the typical director.. then you will get multiple, outsized raises going forward to catch you up to 100%. But that could take a couple of cycles.

Megacorp compensation structures are DESIGNED to slow compensation growth. That is literally the point of why they are so rigid. For most companies, this is how they can project their EPS confidently going forward, etc. Headcount is their #1 expense.

The fastest way to more money is to take the job/title and go interview some where else and make 50% more right off the bat.
Sadly, I think you are correct. I don't really want to leave though. I want to keep doing work I love and get paid correctly for it.
That's what they count on. The vast majority of people WON'T jump.. so in aggregate.. that is how they are controlling headcount costs at a macro level.

If you're a superstar (top 1-3% of performers in the company) - they WILL counter offer your 50% external offer.. but only when you have that offer in writing.

Bingo.

OP..... if you want 1.5x+.... you need to leave. Sadly that's the only way to really increase your comp these days.
I can't disagree.. When I left my last company, I was only leaving for a small raise, but really excited about the new opportunity.
My old company tried to counter offer, and when I said no amount of money would make me stay, they came back to me with an offer of a 70% raise.
I turned that down.

It feels wrong to seek out offers I am not willing to leave for, just to use against my current company, but I am probably being naive.
You don’t know ahead of time that you wouldn’t take those other offers. Go in with an open mind.

There is a very slim chance that your current job is the very best possible job for you. Go talk to some other folks and see what they have to say. There is probably a company out there that wants you at 1.6X, and does cooler stuff, and has a slightly better work/life balance. You’d want that job, right? Well you won’t know about it unless you go to some interviews.

Looking out for yourself is not disloyalty. Work your ass off for your current employer. But in your off hours, think about what’s best for you, and look around a bit.
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8foot7
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by 8foot7 »

I agree with the advice to OP to look around for other opportunities and reiterate my advice to the original question, don't pre-empt the offer.

OP, if you end up countering a 1.2X offer, I would absolutely say that this promotion to director is a 0.05X increase since you have already been doing the work for the 1.15X. I would politely ask if there is any flexibility on the numbers, as in your view, you've only this/last week been compensated according to the previous agreement for a year ago. I would also ask for time to think about iyour response. Something like:

"Thank you again for this opportunity. May I have a couple of days to think it over and discuss with my family? Candidly, while I'm glad you've considered me for this directorship, this salary offer is not iwhat I was expecting given our previous discussions around my potentially taking this role. This amounts to a 5% raise from my current base, which was long promised but just now delivered, in exchange for what sounds like a substantial increase in responsibility and workload. I need time to evaluate what this move mean for my career, my work-life balance, and my family. In the meantime, I'd appreciate it if you would see if there is flexibility in the numbers you're offering, particularly in light of our talks before on this subject."

This is a polite counter. They know they're lowballing you if you truly had accurate discussions about this role before. And the talk about "career" is enough to get me as a manager wondering if this is going to make you test the outside waters. And as a manager, I'm probably acutely aware I promoted you a year ago but have just now started paying you for it, and while I might not feel bad about it, I can sympathize with a POV that you have been promoted twice but only paid once. Under these circumstances, if I really like you for this role, I'm going to see what I can do to make a firmer offer.

However, as I've posted in other threads, when I make promotion offers of this nature, it's generally my best offer and while I'll entertain a skilled attempt at countering, I'm generally not budging. So be prepared if the answer comes back that those terms were the terms; take it or leave it. This is why, OP, you should be looking around, because your only leverage in this situation is an external offer.
rascott
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by rascott »

Patzer wrote: Wed Aug 25, 2021 3:49 pm
rascott wrote: Wed Aug 25, 2021 3:43 pm
fortunefavored wrote: Wed Aug 25, 2021 3:37 pm
Patzer wrote: Wed Aug 25, 2021 3:25 pm
fortunefavored wrote: Wed Aug 25, 2021 2:59 pm Agreed with everyone else.. more than a 10-15% raise in a single jump is very very difficult to get past HR. What can happen is that puts you into the compensation range of 85% of the typical director.. then you will get multiple, outsized raises going forward to catch you up to 100%. But that could take a couple of cycles.

Megacorp compensation structures are DESIGNED to slow compensation growth. That is literally the point of why they are so rigid. For most companies, this is how they can project their EPS confidently going forward, etc. Headcount is their #1 expense.

The fastest way to more money is to take the job/title and go interview some where else and make 50% more right off the bat.
Sadly, I think you are correct. I don't really want to leave though. I want to keep doing work I love and get paid correctly for it.
That's what they count on. The vast majority of people WON'T jump.. so in aggregate.. that is how they are controlling headcount costs at a macro level.

If you're a superstar (top 1-3% of performers in the company) - they WILL counter offer your 50% external offer.. but only when you have that offer in writing.

Bingo.

OP..... if you want 1.5x+.... you need to leave. Sadly that's the only way to really increase your comp these days.
I can't disagree.. When I left my last company, I was only leaving for a small raise, but really excited about the new opportunity.
My old company tried to counter offer, and when I said no amount of money would make me stay, they came back to me with an offer of a 70% raise.
I turned that down.

It feels wrong to seek out offers I am not willing to leave for, just to use against my current company, but I am probably being naive.

People do it all the time. Happens every off-season in the college coaching profession, as an example that's very public. In my view it just shows your market value, and there is nothing "wrong" about it, and other companies expect it to occur.
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Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

8foot7 wrote: Wed Aug 25, 2021 3:59 pm I agree with the advice to OP to look around for other opportunities and reiterate my advice to the original question, don't pre-empt the offer.

OP, if you end up countering a 1.2X offer, I would absolutely say that this promotion to director is a 0.05X increase since you have already been doing the work for the 1.15X. I would politely ask if there is any flexibility on the numbers, as in your view, you've only this/last week been compensated according to the previous agreement for a year ago. I would also ask for time to think about iyour response. Something like:

"Thank you again for this opportunity. May I have a couple of days to think it over and discuss with my family? Candidly, while I'm glad you've considered me for this directorship, this salary offer is not iwhat I was expecting given our previous discussions around my potentially taking this role. This amounts to a 5% raise from my current base, which was long promised but just now delivered, in exchange for what sounds like a substantial increase in responsibility and workload. I need time to evaluate what this move mean for my career, my work-life balance, and my family. In the meantime, I'd appreciate it if you would see if there is flexibility in the numbers you're offering, particularly in light of our talks before on this subject."

This is a polite counter. They know they're lowballing you if you truly had accurate discussions about this role before. And the talk about "career" is enough to get me as a manager wondering if this is going to make you test the outside waters. And as a manager, I'm probably acutely aware I promoted you a year ago but have just now started paying you for it, and while I might not feel bad about it, I can sympathize with a POV that you have been promoted twice but only paid once. Under these circumstances, if I really like you for this role, I'm going to see what I can do to make a firmer offer.

However, as I've posted in other threads, when I make promotion offers of this nature, it's generally my best offer and while I'll entertain a skilled attempt at countering, I'm generally not budging. So be prepared if the answer comes back that those terms were the terms; take it or leave it. This is why, OP, you should be looking around, because your only leverage in this situation is an external offer.
Great advice. Thank you.
Wannaretireearly
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Wannaretireearly »

OP, how close to mid point of Director salary range will this new offer be? Remember HR intervenes in these matters. Sometime for the good, sometimes not...
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
jharkin
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by jharkin »

TheLaughingCow wrote: Wed Aug 25, 2021 2:22 pm
ClevrChico wrote: Wed Aug 25, 2021 2:18 pm I've seen promotions be 7 - 10%. I've never seen or heard of anything close to the numbers you're wanting.

Maybe if this is a multiple step promotion? It still seems like a lot.
Wow, 7-10% for a promotion?

That seems extremely low.

I would be expecting 20% minimum for a step up in responsibilities.

7-10% seems more like the raise I would expect every year or 2 for loyalty to the company and the increased competence which comes with experience. (i.e. for time in service rather than grade)
Don’t take this the wrong way, but are you under 30?

I’ve worked in software since the 1990s, and 7-10% per year raises have never been a thing outside the bubble world of the FAANGs, maybe. 2-5% is a more common average in good years, and zero happened many times in the dot com crash and the Great Recession. Most times I got promoted the raises where 5-10%, inclusive of the usual base merit. Some companies and roles don’t even give a raise to base for promotions and just increase the bonus.

Speaking of which, bonus structures are where the real increases are made at upper management levels and many mega corps double or more the cash and equity bonuses at each management step.

If the numbers you are looking for include bonus comp, you may be on track. If not I really think you need to be looking outside if you are hoping for more than about %10-20. The big jumps come from company changes typically.
Last edited by jharkin on Thu Aug 26, 2021 6:05 am, edited 1 time in total.
Topic Author
Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

Wannaretireearly wrote: Wed Aug 25, 2021 4:23 pm OP, how close to mid point of Director salary range will this new offer be? Remember HR intervenes in these matters. Sometime for the good, sometimes not...
I know the salaries of 7 directors.
They are 1.38x, 1.45x, 1.53x, and 4 people at 1.65x.
1.2x is very out of line, but running to HR is a dangerous game.
HomeStretch
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by HomeStretch »

Mathematically, it’s a 4.3% increase (=5%/115%) over the previously agreed upon deferred 1.15x increase.
Wannaretireearly
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Wannaretireearly »

Patzer wrote: Wed Aug 25, 2021 4:29 pm
Wannaretireearly wrote: Wed Aug 25, 2021 4:23 pm OP, how close to mid point of Director salary range will this new offer be? Remember HR intervenes in these matters. Sometime for the good, sometimes not...
I know the salaries of 7 directors.
They are 1.38x, 1.45x, 1.53x, and 4 people at 1.65x.
1.2x is very out of line, but running to HR is a dangerous game.
My point is knowledge is power. If you know the HR range and mid point you can have a point to negotiate. Trying to compare with others is a losing game.
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
Topic Author
Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

Wannaretireearly wrote: Wed Aug 25, 2021 5:02 pm
Patzer wrote: Wed Aug 25, 2021 4:29 pm
Wannaretireearly wrote: Wed Aug 25, 2021 4:23 pm OP, how close to mid point of Director salary range will this new offer be? Remember HR intervenes in these matters. Sometime for the good, sometimes not...
I know the salaries of 7 directors.
They are 1.38x, 1.45x, 1.53x, and 4 people at 1.65x.
1.2x is very out of line, but running to HR is a dangerous game.
My point is knowledge is power. If you know the HR range and mid point you can have a point to negotiate. Trying to compare with others is a losing game.
Not sure how to figure out the range beyond gathering salaries of people in the role and trying to calculate the range from that. It's not like HR is going to give me the range.
surfstar
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by surfstar »

Patzer wrote: Wed Aug 25, 2021 3:31 pm
surfstar wrote: Wed Aug 25, 2021 3:09 pm Reality check:
  • Today's Date: 8/25 - it is not September - do you have your 1.15x offer in hand? Or was that never realized?
  • 1.2x > 1.15x > x
Seems like an uphill battle.
I was told last week it would be on my Sept 1st paycheck, so why would I pretend a salary increase I am getting in a few days isn't going to happen and not consider it in my offer?
I wish people could answer my actual question, which was whether I should reach out before the offer is delivered or negotiate once it arrives.

Instead, of commenting on if they think, that I deserve to get paid for the work I do.
It was not clear to me that your September raise was a given, just planned.

You can always counter with a 6 or 12 month performance review, asking to go from 1.2x to 1.4x.
You know the environment better than internet strangers - bottom line, would you be okay with 1.2x and the new role? If you decline, are you still on track for 1.45-.6x within 3 years, or would you get downgraded by turning down a promotion?

Flip a coin, if it comes down to it!
Topic Author
Patzer
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Patzer »

surfstar wrote: Wed Aug 25, 2021 5:19 pm
Patzer wrote: Wed Aug 25, 2021 3:31 pm
surfstar wrote: Wed Aug 25, 2021 3:09 pm Reality check:
  • Today's Date: 8/25 - it is not September - do you have your 1.15x offer in hand? Or was that never realized?
  • 1.2x > 1.15x > x
Seems like an uphill battle.
I was told last week it would be on my Sept 1st paycheck, so why would I pretend a salary increase I am getting in a few days isn't going to happen and not consider it in my offer?
I wish people could answer my actual question, which was whether I should reach out before the offer is delivered or negotiate once it arrives.

Instead, of commenting on if they think, that I deserve to get paid for the work I do.
It was not clear to me that your September raise was a given, just planned.

You can always counter with a 6 or 12 month performance review, asking to go from 1.2x to 1.4x.
You know the environment better than internet strangers - bottom line, would you be okay with 1.2x and the new role? If you decline, are you still on track for 1.45-.6x within 3 years, or would you get downgraded by turning down a promotion?

Flip a coin, if it comes down to it!
1.2x is a hard no.
I think they would say yes to 1.2x now and 1.4x in 6 months, which could turn into 12 months.

I have a stellar reputation, and I think the 1.45-1.6x is still a possibility in a few years if I turn it down, but it would hurt my chances a little.
Last edited by Patzer on Thu Sep 23, 2021 11:35 pm, edited 1 time in total.
EddyB
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by EddyB »

Dottie57 wrote: Wed Aug 25, 2021 3:46 pm
TomatoTomahto wrote: Wed Aug 25, 2021 3:12 pm
Normchad wrote: Wed Aug 25, 2021 2:57 pm Wow. I think if I reacted like this to opportunities from my employer, they’d fire me and find somebody else to fill the roles.
IME, some low paid ICs think like this, and I guess it’s what they hear from their peers. When you move up the ranks, I don’t think anyone I know has ever expectrd a quid pro quo for taking on a stretch opportunity. Do a good job and the money shows up.
This.
Which part? The snarky dismissiveness of “low paid ICs”?
Ependytis
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by Ependytis »

I am always surprised when people feel like they’re being disloyal when looking for another position. Has your company never had layoffs? Do you think your company doesn’t know what other companies pay for your position?

I was interviewing with a company and they knew to the dollar what I made. That’s because companies get together and compare salaries for different positions. In the past, Companies had a policy of no layoffs. That is ancient history. Today people are disposable. That’s why you need to shop your talents around and go for the best offer that meets your needs. It’s not just about the money, it could be worklife balance as well.

It’s like a recruiter said, “I’ve known people that worked really hard for very little money, and people that didn’t work very hard for a lot of money.” I don’t know about you, but I would want the latter position.
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TomatoTomahto
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by TomatoTomahto »

EddyB wrote: Wed Aug 25, 2021 5:39 pm
Dottie57 wrote: Wed Aug 25, 2021 3:46 pm
TomatoTomahto wrote: Wed Aug 25, 2021 3:12 pm
Normchad wrote: Wed Aug 25, 2021 2:57 pm Wow. I think if I reacted like this to opportunities from my employer, they’d fire me and find somebody else to fill the roles.
IME, some low paid ICs think like this, and I guess it’s what they hear from their peers. When you move up the ranks, I don’t think anyone I know has ever expectrd a quid pro quo for taking on a stretch opportunity. Do a good job and the money shows up.
This.
Which part? The snarky dismissiveness of “low paid ICs”?
I’m not answering for Dottie, but myself. I made the distinction, arguably poorly, between “low paid ICs” and higher paid ICs (and managers) who I don’t believe think that way. I’m old and have paid attention; accepting stretch assignments and doing well at them leads to increases in compensation greater than negotiation does. My 2 cents.
I get the FI part but not the RE part of FIRE.
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8foot7
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Re: How to Deal with Incoming Low Ball Promotion Offer

Post by 8foot7 »

TomatoTomahto wrote: Wed Aug 25, 2021 5:49 pm
EddyB wrote: Wed Aug 25, 2021 5:39 pm
Dottie57 wrote: Wed Aug 25, 2021 3:46 pm
TomatoTomahto wrote: Wed Aug 25, 2021 3:12 pm
Normchad wrote: Wed Aug 25, 2021 2:57 pm Wow. I think if I reacted like this to opportunities from my employer, they’d fire me and find somebody else to fill the roles.
IME, some low paid ICs think like this, and I guess it’s what they hear from their peers. When you move up the ranks, I don’t think anyone I know has ever expectrd a quid pro quo for taking on a stretch opportunity. Do a good job and the money shows up.
This.
Which part? The snarky dismissiveness of “low paid ICs”?
I’m not answering for Dottie, but myself. I made the distinction, arguably poorly, between “low paid ICs” and higher paid ICs (and managers) who I don’t believe think that way. I’m old and have paid attention; accepting stretch assignments and doing well at them leads to increases in compensation greater than negotiation does. My 2 cents.
I believe this to generally be the case most places outside of FAANGland.
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