Different pay scales in work.

Soldato
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the point is companies are perfectly happy to adjust salaries based on living costs, and that doesn't simply have to be geographic but can extend to personal circumstances.

this also goes back to individual people's perception of value. Someone single has lower living costs than a parent, giving them the same gross salary will mean the parent has less money at the end of the day and the value of that salary will thus be lower. This will incentivize the parent to negotiate a higher salary or look at other job offers.

Errm.

Companies are happy to pay more in London because it's a simple fact that living costs are higher. Thus they HAVE to pay more to hire people.
They don't want to, and I guarantee they would pay less if they could.

Does that person having a family with kids have anything to do with it? I doubt it. Unless the person was really good and the company really really wanted them. But that's something entirely different.
 
Caporegime
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Errm.

Companies are happy to pay more in London because it's a simple fact that living costs are higher. Thus they HAVE to pay more to hire people.
They don't want to, and I guarantee they would pay less if they could.

Does that person having a family with kids have anything to do with it? I doubt it. Unless the person was really good and the company really really wanted them. But that's something entirely different.
Putting it another way, I would not accept a lower salary than a guy who had kids just because he had kids and I don't.

That's frankly ridiculous. If I found out there was a discrepancy I would be pushing for a raise to get parity.

You get paid for the work you do, and if two people are doing the same work to the same standard then (from the employer's POV) there is no reason to pay one more than the other because of their lifestyle choices.

I certainly would not accept being paid less on the basis of not having kids. The idea is wholly absurd.
 
Soldato
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It's precisely this attitude and these ideas - which are considered "common sense" to many managers - that are actually damaging companies and reducing productivity.

Appreciate this article is 20 years old, but it's well worth a read.

https://hbr.org/1998/05/six-dangerous-myths-about-pay

Long story short - you can pay your staff more and have greater productivity and staff who are more invested in your company's success... or you can try to squeeze pay as much as possible and potentially lose money/productivity compared to your rivals.


Hmmm....

lets loot at how some of the companies listed in the article have done over the past twenty or so years shall we?

Quantum Corp...

6th of August 1999 stock price $151 USD.....
3rd of May 2019 $2.75...….

Not a great start....

SAS Institute... privately owned so lets look at revenues….

In 2000 revenues were $1.1 billion and in in the last widely reported figures (to year end 2017) their revenues were $3.24 billion which is good but not great for the tech industry and lets remember that US inflation alone would make $1.1 up to $1.62 billion in modern dollars so there revenue isn't far of double adjusted for inflation

for comparison to at the end of the 1999/2000 fiscal year Microsoft report revenue of $22.96 billion for figures, reported just a few months after SAS's, Microsoft announced revenue of $110.36 billion or just under a five fold inflation unadjusted increase to SAS's under three fold increase.

Motorola

In February of 200 Motorola topped out at a stock value of $211.35 currently they stand at $145.23 after many years of being far lower, mostly under $100

Men's Warehouse

……. are owned by Tailored Brands whose stock price is currently sitting at $8.31 twenty years ago, on the 28th May 1999 they were sitting at $17.02

Whole Foods

Found themselves in finical trouble and were bought out by Amazon in 2017 after suffering declining sales and shutting stores

So it seems a bit hit and miss as to whether this sort of alternative pay strategy does pay off?
 
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Caporegime
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There's no way of knowing if in the interim 20 years the management changed entirely and also their pay strategy.

So tracking their fortunes over 20 years probably doesn't tell us a whole lot, without that knowledge.

But there are plenty of more recent studies which back up aspects of that article. Such as performance related pay targeted at individuals not necessarily being a good thing.

We have it at work and honestly everyone thinks it's a farce. Nobody believes it works.

The principle of the article I linked was that often people have a too-simplistic idea that squeezing wages is always a good thing and to be successful you have to pay your staff as little as humanly possible.

I would hope that there are some companies out there that don't adhere to that goal/principle.

e: Tbh so many factors can change over 20 years that to say the pay strategy was the determining factor in their decline is a bit ludicrous tbh. Almost anything could have happened to those businesses resulting in their decline, completely unrelated to their pay structure.

Perhaps what they were offering simply didn't keep pace with changing consumer demand. That would have nothing to do with pay structure.

e2: The keep take away from that article is that - at the time - they were offering better pay structures than their competitors and also performing better. Thus proving that you don't have to squeeze your employees as hard as possible, in an effort to keep wages as low as possible.

You can if you're inclined to treat your employees as disposable worker bees, but you don't have to.
 
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Caporegime
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Errm.

Companies are happy to pay more in London because it's a simple fact that living costs are higher. Thus they HAVE to pay more to hire people.
They don't want to, and I guarantee they would pay less if they could.

Does that person having a family with kids have anything to do with it? I doubt it. Unless the person was really good and the company really really wanted them. But that's something entirely different.


You answered your own question.

Unless the person was really good and the company really really wanted them

But if the company didn't really like the candidate then the salary negotiation is a moot point. However, given a good candidate who had higher living costs, just like people living now I'm not london have higher living costs, then the candidate will likely asking for money and the company will likely pay.

Good employees are worth far more than differences in salary.
 
Caporegime
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Putting it another way, I would not accept a lower salary than a guy who had kids just because he had kids and I don't.

That's frankly ridiculous. If I found out there was a discrepancy I would be pushing for a raise to get parity.

You get paid for the work you do, and if two people are doing the same work to the same standard then (from the employer's POV) there is no reason to pay one more than the other because of their lifestyle choices.

I certainly would not accept being paid less on the basis of not having kids. The idea is wholly absurd.


You are completing missing the point of the argument. The highlighted part basically is false in the real world because companies rarely pay a salary directly based on contribution but a lot of different economic factors. Typical scenario, someone X is hired during a recruitment process that saw 5+ good candidates and the company selected someone who met the criteria and requested slightly less pay than some of the other potential hires. Several years later the company needs to quickly hire a replacement to an employee who left. Only one candidate shows suitability ability but their pay request is 20% hire than person X. The company doesn't have much choice part form paying the new candidate more. The company also doesn't have to go back to all old employees and raise their salaiers to match the new hire. Another common scenario is somoene who has worked for a company for say 5 years sends ut their CV and gets a job offer for significantly more money. They can then turn around to their current employer and make a case that they have a good offer on the table and they don't feel that their loyalty to the company is being financially rewarded. If the employee is good then the company may well match the pay offer and thus get a big increase over other employees at the firm in the same role.

You are right, if you find out about a pay discrepancy you are well within your rights to ask for a salary review. But just don't expect to automatically get it. Complaining that someone else gets paid more than you wont get you very far. If you instead explain your merits, your loyalty and market conditions then they may accept a rise. If you come across like a whining jealous brat complaining at other peoples' salaries then you are much less liekly to get anywhere. Even better, you explain to your boss how much your value to the company has increased, that you have been loyal, AND that also now you are father you are looking more closely at making ends meet so you are requesting a pay review, then the company is going to be quite obliging and may well take into account your new familial status along with other factors.

For sure turning up to bus and saying "I'm now a parent, pay me more" wont get you far, and I never implied it should. Simply if you have higher living costs then you will request a higher salary at salary negotiations be that at a new job or a a salary review at an old.
 
Caporegime
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Posts
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There's no way of knowing if in the interim 20 years the management changed entirely and also their pay strategy.

So tracking their fortunes over 20 years probably doesn't tell us a whole lot, without that knowledge.

But there are plenty of more recent studies which back up aspects of that article. Such as performance related pay targeted at individuals not necessarily being a good thing.

We have it at work and honestly everyone thinks it's a farce. Nobody believes it works.

The principle of the article I linked was that often people have a too-simplistic idea that squeezing wages is always a good thing and to be successful you have to pay your staff as little as humanly possible.

I would hope that there are some companies out there that don't adhere to that goal/principle.

e: Tbh so many factors can change over 20 years that to say the pay strategy was the determining factor in their decline is a bit ludicrous tbh. Almost anything could have happened to those businesses resulting in their decline, completely unrelated to their pay structure.

Perhaps what they were offering simply didn't keep pace with changing consumer demand. That would have nothing to do with pay structure.

e2: The keep take away from that article is that - at the time - they were offering better pay structures than their competitors and also performing better. Thus proving that you don't have to squeeze your employees as hard as possible, in an effort to keep wages as low as possible.

You can if you're inclined to treat your employees as disposable worker bees, but you don't have to.

You are probably conversing with someone I have on the ignore list but I agree, paying a good salary is important and in the long term beneficial to the company. This is exactly why salaries are not fixed for the same role, because people's individual value of a salary is different.

Also, paying higher salaries has a bigger positive impact at the low end rather than the high end. Paying employees higher salaries in the range of minimum age to national median typically sees large increases in productivity, reduced sick time, increased loyalty etc. As salaries get higher then people start to consider more and more other variables with increasing weight: commute time, office hours, responsibility, career growth opertunity, respect, flexible hours, remote working etc. There are a lot of things companies can do without a direct cost and these things have the same benefits of improving productivity and loyalty.

This is made very evident looking at productivity between the UK and say Germany. Germany works lower annual hours with shorter work weeks and more holidays, but the productivity is higher.

If a company is offering a good work environment then the employees look at aspects well beyond salary and a natural occurrence will be greater salary variances. Some employees may have negotiated a higher salary, perhaps because they have a higher living cost with their kids, other will be perfectly happy ona lower salary and enjoy the benefits of the company.

Companies with a horrible work environment where the employees despise being their and only turn up to get their paycheck each month will be filled with jealous workers being bitter over pay differences.
 
Caporegime
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For sure turning up to bus and saying "I'm now a parent, pay me more" wont get you far, and I never implied it should. Simply if you have higher living costs then you will request a higher salary at salary negotiations be that at a new job or a a salary review at an old.

This is slightly different to what was originally posted, you've put forwards a load of stuff since the original post that wasn't really objectionable in the first place - it was simply this bit that people took issue with:

What people fail to understand is the salaries are negotiable and companies are happy to pay people different amounts. there is nothing wrong with that.

i get paid a good 20K more than some others in my company, but I have just asked for more money and justified it by having higher living costs.

Highlighting that people with higher living costs are more likely to ask for more money as you have done in the more recent posts isn't particularly controversial, I'd agree with that. Using it as a justification with respect to a request for more money however is superfluous at best.

The above is a merely a motivation for asking for more, you might well feel inclined to explain your motivation for asking but it isn't in itself a justification for the ask.

If you're under paid or around the middle of the range for your role then asking in itself might well result in a raise simply for retention purposes (whether you have kids or not isn't particularly relevant to the company here but more just the risk of losing someone doing X job). Beyond that, like say you're already near the top of the range, asking alone isn't necessarily going to be sufficient - an actual justification might well be needed like say citing what you've actually done for the company that has increased your value to them or perhaps being willing to take on more responsibilities (again creating value) in order to earn a higher amount etc...
 
Associate
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19 Jul 2011
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This won't be a popular post but I have seen this many times thru my career - people are employed to do a particular job, but when they get hired it is because of their skills and experience, and that is normally the differentiator in what the company has to offer to pay them to join the company. Being employed and getting hired into somewhere are normally two very different positions for negotiating pay. Consciously or unconsciously, employers also offer better pay (or benefits) for people they see coming into to do job X at the start, but plan to get them to job Y later on - anywhere that is serious about succession management will be looking for not what that person can just do now - but what they can do later.

Once someone is an established employee, pay changes, increments etc. are down to the company ethos. But the starting position is normally determined by factors the employee brings with them.

This is a lot more evident the higher up in an organisation you go. People in at the ground floor, doing unskilled manual or repetitive tasks - salary ranges for people doing the same type of role will normally be quite small. By the time you get to senior management or roles involving rare or specialist skills - the range of salaries paid to people doing the same 'type' of role can vary massively.

This is also why people who leave a company and rejoin will normally have increased their pay beyond the colleagues that stayed behind.
 
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