From the Ask Tom mailbag:
Question:
I learned today that my salary, as a manager of a department, is less than the people on my department team. My boss told me that adjustments will be made during my review. What is the best way to deal with this without feeling betrayed by my employer? I have been with the company fewer years, but promoted twice and my skills far exceed those on my team.
Response:
Your situation is not unusual. Most companies have only an intuitive idea about appropriate compensation and much less of an idea when asked to explain their compensation structure. Curing a compensation structure that is out of whack is quite difficult.
This is complicated by the fact that compensation gets wrapped up in the self concept of a person’s value. Not the case. Compensation must be based on the contribution of the role. The person may have higher capability and the potential to play a higher role, but it is the role that commands the compensation, not the person.
Elliott Jaques was quite specific and clear on the subject of compensation. He offers a simple basis for compensation banding with Time Span as the metric. Compensation, in Jaques model, is directly tied to the effective Time Span responsibilities in the role. And in your case, as a manager, your task assignments (goals) would necessarily have longer Time Spans associated. This would command a higher pay band than those on your team.
Your employer gets the benefit of the doubt on this one, acknowledging that an adjustment is appropriate. And it is likely to take some time to fix this systemic misunderstanding. And an even longer time for your boss to understand why.
Can you expand on the “Time Span” “compensation banding” approach? I am not familiar with this concept and do not fully understand what is meant by either term. Thank you.
This ‘Time Span’ method of determining compensation seems to reinforce the idea that managers should always be paid more than the staff they manage. Not so. Sometimes, perhaps, but not always.
I have a technical background, and also manage technical teams. Often, the specific technical skills required by a non-manager role are rarer and of more value to the organisation than those of a manager for that role (if we assume equal competence in the required skills). In those circumstances, the technical role deserves to be paid more than the manager.
In other cases, the reverse is true.
Paying based on the value of the role is, I think, closer to the mark than a purely Time Span approach.