Friday, October 10, 2014

Pay Raises: The New Holy Grail

Does the name Satya Nadella sound familiar? If it doesn’t, it very well could be a name you won’t forget by the end of the day.

I have to admit I didn’t have clue about who he was until I read about his comments at the Grace Hopper Celebration of Women Computing.

Keep in mind that Nadella should have a little bit more experience and knowledge in employee management – he is, after all, the CEO of Microsoft. But his overnight claim to fame is now based on statements he made at that conference suggesting that women should not ask for raises but have faith in systems that reward them and provide pay raises as a woman. He also suggested that women who don’t ask for raises are creating good karma and have superpowers.

Yes, he really made those statements at a national conference in a room packed with women. Before he could even finish the attendees were feverishly sharing and Tweeting their anger and disagreement. By the close of the business day, his odd, disjointed and controversial statements had made their way back to Microsoft, prompting him to email Microsoft employees as damage control.
Monday may pose more challenges for Nadella in the office, and it might be wise for him to get his own coffee.

In all fairness, however, let's consider one of his statements.

Nadella said he felt that as long as women progressed organically in their careers they would make more money with the company without asking for raises. I would say a majority of managers would hold the same view in assuming that employees that stay get paid progressively higher wages over their years of service. If they don’t receive adequate or increases in pay, would it be likely for them to stay with the company?

Employees in today’s market may not necessarily be staying because of great pay with the promise of increased wages. More than ever, they are motivated by different factors, including flexible work environments, telecommuting, job responsibilities, company cultures, personal reasons, etc. Nevertheless, equitable and fair pay is always at the top of everyone’s list for why they stay at a job or seek out other opportunities.

Many companies put processes in place to try to ensure employees are paid fairly – like annual performance evaluations with the potential to attach merit based pay increases. Or merit-based pay for completing introductory periods of employment.

Even with the best of intentions these processes either are not completed or become complicated for a number of reasons including streamlining the processes, raise/bonus structure, disciplinary processes and setting aside a time annually (or semi-annually) to conduct the evaluations with all employees.

This means that even though the processes are in place, employee pay becomes flatlined and employees begin to feel undervalued and unappreciated, affecting long-term productivity, morale and turnover.

In these situations, employees have a choice of either asking for a raise or hoping the management will recognize their true value and pay up. More often than not, this does not happen, leaving employees in the position of having to ask for a raise.

From a business standpoint, employees taking responsibility for asking for raises could be a win-win situation. Employees are not only responsible for making the overture but also for making the case why they should be paid more. This could lead to a more open and candid process of evaluation.

But for an employee, taking that responsibility can be awkward and nerve-wrecking -- certainly not something anyone jumps up and down about doing. In turn, this can have an even more negative effect, especially if the request is declined, The employee feels not only rejection increased feelings of being undervalued and unappreciated.

Let’s be honest about this entire situation: an employee isn’t going to work at a job for an extended period making wages that are stagnant, especially with the cost of living going up. As the job market continues to lose people to retirement and companies cope with the ever-changing job market, the almighty dollar once again becomes king again in the workplace.
Monica Bitrick is the CEO of Bitrick Consulting Group, an Idaho Falls human resources company.