Have you ever had a situation where you fell in love with a prospective employee who asked for more salary than you were willing to offer? Or a valued employee who tendered her resignation and you attempted a counteroffer?
Every leader has experienced this at some time. On the surface, you’re faced with offering more money than you were originally willing to pay. Both situations, though, merit more consideration than just the checkbook.
The prospective employee
If you pay more than you want to, you will tend to expect miracles from the new employee (“after all, I paid her thousands more than the position is worth…”). Consider other ways to compensate, such as bonuses or other incentives.
And, it can be even more complex if the person wants more money than what you currently pay comparable employees. When this happens, it’s probably time to look at your compensation structure to determine whether it fits the current reality of your industry.
Supply and demand drive compensation levels, and you need to stay on top of these trends. Then when you are faced with someone asking for more salary than you’re willing to pay, you’ll know whether you’re on track or off base.
The departing employee
People rarely leave a job for money alone. If the salary differences are substantial, the jobs are probably not comparable. The issues you need to consider before suggesting a counteroffer, though, are more psychological. Did the question of compensation come up before? Can you trust someone who has one foot out of the door? How long will it be before he tries again?
Consider whether the employee has tapped out, burnt out, or “checked out”. What are the opportunities for more growth in the company? Have you discussed career path? If your evaluation ends with a lackluster result, then you probably want to wish the person well in his or her new job.
These situations are difficult. The best advice is to look beyond the money to see what’s lurking in the background.
Have a great day!