Are you really paid what you're worth?

The other day I was throwing out some magazines that I had been saving. I often do this, but then never get around to actually reading the articles. One of the ones I was about to toss was an article in an old New Yorker magazine (January 5, 1998) titled The Narcissus Survey. The research in the survey was conducted by Penn, Schoen & Berland, a firm whose client list includes the President of the United States. Here's part of what the survey discovered.

When asked questions about wealth (who has it and how much) the survey showed that Americans greatly overestimate the number of people at both ends of the economy. Participants estimated that between a quarter and a third of Americans live in poverty but the Census Bureau says it's actually about 14 percent. At the other end of the spectrum, participants thought that 18 percent to 25 percent of families had incomes of $105,000 to $135,000 (which respondents classified as upper-middle-class); and 10 percent to 25 percent had incomes of $206,000 to $348,000 (which they classified as upper-class). The truth: SRI Consulting reports that only 6.5 percent of Americans have a household income of over $100,000, and two percent over $200,000. The New Yorker concluded that the American Dream is, in large measure, a daydream.

Supporting what we've observed for years, you could draw this conclusion from The New Yorker's data: Money is an emotional issue. People have feelings about money. They talk as if things and money were interchangeable. Obviously the survey respondents based their estimates of poverty and prosperity, not on facts, but on the relationship between what they earn and the level of income that would make them feel poor or rich.

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Take this a step further. Separate your personal feelings about money from the realities of the marketplace. You may be satisfied or not with your salary but do you really know what you should be making? Or have you taken the word of self-serving recruiters and retentive HR types who either inflate or deflate salary ranges?

If you have, it is time to engage in serious salary research. Whatever assumptions you've made in the past about your earnings too high or too low, competitive or not, it's time to chuck them. Prop your ladder against a different wall and do salary research with a vengeance. Here's why: Everyone in HR we talk with says compensation theories and policies have been jettisoned as companies scramble to get the help they need regardless of cost. If they have a critical department consisting of six people who do the same job and the most recent hire is earning the most, they'll worry about the inequity later. Right now, they want those slots filled. Long-term employees are especially vulnerable to such treatment. Those nearest retirement are most vulnerable of all.

It doesn't have to be that way. Organizations will adjust compensation for those who shout loudest. That's where solid research comes into play. Feeling you're underpaid for what you contribute counts for nothing. You have to present the kind of evidence that's likely to impress a trial lawyer. Here are some solid sources:

* The Jobsmart.org site on the Web. It's constantly updated and has at least 150 salary surveys.

* Job postings on the Web which show salary ranges. Executive search firm job orders. These always include salary ranges. Some now have web sites.

* Photocopies of in-house job postings from competitive organizations.

* Association surveys not included in the Jobsmart site.

Given the fact that respondents to the survey, which included The New Yorker readers who pride themselves on being savvy were so misinformed, isn't it likely that your untested assumptions about the salaries of people who do what you do are not on the mark?

Our concern is that in a hot market anyone who isn't looking for a new job will fall into a reverie that obscures this critical message: You must keep your salary at market level--you can get more money. Otherwise, during the next recession, you'll spend too much time (one minute is too much) trying to explain to hirers how you allowed yourself to be underpaid when everyone else was getting market-led increases. This will affect your market value with top organizations since they have no mercy for anyone who doesn't fight for money.

Keeping your salary at market level is an ongoing research task. It can't be done every five years and then filed until needed. It can't be done one week before you expect a job offer unless you can spend the whole week fact finding. Of the individuals we work with, about 80 percent are not paid "market"--in fact, they're often paid about 15 percent less. If they've been with one organization for ten or more years they might be 25 percent behind. We have never met anyone paid more than market although we're hoping the law of averages kicks in soon.

MORE SALARY COMPRESSION FALLOUT

Imagine you're watching a searchlight moving slowly across the night sky in a 120 degree arc. Suddenly the light locks on one spot. It does not move again. That's what's happening in many Human Resource departments right now. The spotlight is frozen on recruiting and there are few people or resources available to address any other issue. All hands are working to fill slots with warm bodies, if not with well-qualified candidates. Once they are hired, employees are on their own. We've heard of several medium-sized hospitals who have temporarily shelved their orientation programs. They hand new hires the policy manual and wish them God speed.

Organizations that need many recruits have virtually suspended their salary range systems. In the old days, the amount of money you could negotiate as a new hire was limited by the salary range for a particular job. That's no longer true if your skills are in great demand. The hirer is more likely to ask, "How much money would it take to get you to join us?" rather than, "What salary range did you have in mind?"

This single-minded focus on hiring has had some unpleasant results. There is a rising tide of resentment among long-tenure employees who sense they are being ignored at best and exploited at worst. Because every salary dollar is invested in hiring, getting a raise is as difficult as ever, maybe more so. Employees are often promised raises "in the near future," a future that never materializes. Some employees may not even ask for an increase, they'll just seethe and job hunt. Companies are aware of this but are too busy to address the issue. If someone presents a written offer, they may counteroffer with the long-promised raise plus.

Organizations who value team work seem unable to grasp the idea that without salary equity among workers on a team, the team won't function. The minute better compensated workers show up, the less compensated begin to slack off. Learning about pay inequity can be the last straw for a disillusioned worker who once believed a company valued his/her experience and commitment.

If you get the money you want up front, why should you care? Because the people you signed on to work with may not stay! Consider this: A woman accepted a new job with a 23 percent increase and a $5,000 signing bonus. The boss who hired her is well known in the profession as a mentor. She was ecstatic. Two weeks after she joined the hospital, he left for a higher-paying job and took his assistant and the department secretary (the repository of all organizational history and wisdom) with him. The new hire is bereft and wonders how long she'll have to stay before she can get another job.

You can occasionally prevent a disaster like this if you do your homework. Before signing on, research the turnover at the organization you propose to join. Is it salary induced? Are people bleeding out of there in droves because the company is looking at compensation one dimensionally? If there's anything worse than leaving money on the table, i.e., not getting all that you might have bargained for, it's accepting an offer from an organization that's been destabilized by money. Candidates often neglect this key piece of research.

Only former employees can tell you the truth about an organization's salary strategies. Everything else is spin. HR has no reason to confide that turnover is on a steep upward curve. If you think that ethics require a confession, you don't understand the level of desperation among recruiters. They view your anger when you find out what's really going on as an occupational hazard and an acceptable risk.

If you've already faced this problem don't beat yourself up. It's not completely preventable even with the most diligent research and questioning. What boss, desperate for help, will reveal that he/she may not be planning to stay? Many bosses don't know. The headhunting community is aggressively wooing the newly promoted as assiduously as those who've been in place for years.

There's money out there but also new hazards. It's up to you to protect your interests and to keep your resume burnished. Build a war chest with signing bonuses as you move from job to job. You will need it if the economy turns down. Remember the Greeks: Nemesis inevitably follows hubris.

by Marilyn Moats Kennedy MSJ