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I could use advice on a weird situation in a very small family-owned software company.  A direct report I inheirited 1.5 yrs ago is suddenly demanding a huge (~28%) raise immediately or else he'll quit.  I have no recollection or notes of him ever complaining to me about compensation in 1-on-1's or otherwise. He is suddenly alleging that he was lied-to multiple times by his former managers (gone 1 year and 4 years respectively) as well as the founder/owner about compensation and growth opportunity in the company.  But, he has produced no specifics or anything in writing and has never mentioned this to me before.

The employee has been with the company 5 years and his comp has increased nearly 40% over that time so it's not like he has been stagnant.  I believe his comp is in line with the market and in fact I swear he told me a couple months ago that he was happy with his pay and thought it might be a bit over market.

There is clearly more going on here than a straight compensation discussion. Any wisdom as to how to extract and resolve the real core issue(s)?  Should I write this off and let him leave as is the present direction this is heading? I do not respond well to extortion tactics or accusations about my current or former colleagues' integrity.
 
Thanks!
 

 

rdlybeck's picture

"Blackmail is not behavior you are willing to reward. Now or ever...."

I think his behavior is the first thing that jumps out at me, but ask yourself if he deserves it. Sounds like you might have already done that by saying you believe his pay is where it should be. Has the direct made an argument based on work product or contribution to deserve that raise?

Regardless, his behavior is unprofessional to demand such a raise. Sounds like something might have happened recently for this change in behavior but to threaten your boss is never ok.

Suggestion:

Do your homework about his pay and where it should be. If he is where he should be then tell him politely that you've reviewed all information available to you and decided that he is compensated at the right rate of pay. Then you could give him some feedback about the way he asked. Tell him that you are always open to looking at a pay increase for performance, and behavior like that (blackmail) is not behavior you are willing to reward.

 

Hope that helps,

 

Ryan D. Lybeck

DISC: 6711

campbellcj's picture

 Thanks for your input Ryan.  I do need to do some research to verify pay ranges for this type of position. This employee is the only one in his role at our company so I don't have data points there.  

One of his gripes is that he's aware other past and present colleagues earn more than him -- which is pretty darn normal and expected in most organizations.  

There is certainly some bad blood between him and his two former managers but I don't know what precipitated that history to come up now after so long, and why he's dwelling on the past so much.  I have mentioned that several times in our recent discussions - let's focus on the present and future.

 

 

rdlybeck's picture

 I agree, sounds like there was some bad blood in the past. He may have reason to be upset with his previous leader, and that wasn't you.

You have to decide based on his behavior if his performance warrants more money. He has to decide if the job he is currently doing is one he wants to continue doing. Those are two completely separate decisions and it is unprofessional for him to try to play one over you to get the result he wants. Hope he has a back up planned in case this doesn't go his way. Sounds like going "all in" if he was playing poker prematurely.

Ryan D. Lybeck

DISC: 6711

maura's picture

In terms of research, I find that payscale.com gives pretty accurate numbers for technology jobs, and includes adjustments for region and company size.  If you enter the data as if you are the employee, the results are free.  You'll have your answer in about 5 minutes.

timrutter's picture

"  A direct report I inheirited 1.5 yrs ago is suddenly demanding a huge (~28%) raise immediately or else he'll quit."

 

 

My answer would be that we'd be sorry to see you go. Research as much as you are willing to about background and pay. The bit that's caught my attention and rung alarm bells is the size of the demand and the method. Don't reward the behavior,maybe start casting to your network just in case he should choose to go.
 
Using a 'Horsmanism', the conversations that your direct has had with you, would you have them with your boss?
 
 

duplicate_account_MarkAus's picture

 Agree with Tim.  Informal discussions with others create no obligation on you.  

Tell him to focus on his situation right now and to give you a business justification complete with specific examples and data.   The company today matched with his experience and skills is unique -- so comparisons with others in the company (past and present) can't carry a lot of weight in the decision.

Also, I would tell the direct what you said to us in Paragraph 2 and see what the response is to your surprise at this discussion.

mike_bruns_99's picture

It's not about the money.  Whatever happens, whether he gets a raise or not, in 6-months he'll be out the door.

How prepared are you for him to leave?  Do you have a strong bench?  Is the work well documented where the other team-members can pick back up?  Or will his leaving cause a significant disruption on your team?

Plan now for his departure to make it as least disruptive as possible. 

And I'll give a piece of contrarian advice as you're a small company. Absolutely talk with your founder-CEO first.  But it MAY be worth it to give him the raise in the short term.   Having a few months to hire a good person and work with them on a solid transition may be worth it to your company in the short term.

In a bigger company or very well-defined job responsibilities. Tim is absolutely right.  And I think we (and directs) can over-estimate the effects of their departure. However, in smaller companies, the job is far less defined and 1 person can have a larger impact.  

 

DRD282's picture

Did the employee say "I need X raise or I quit?" or was it something along the lines of "I need X raise or [I will have to quit / won't be able to stay ]"? Something along the lines of the latter may be indicative of outside issues and monetary considerations, rather than just an "I want a raise because I deserve it" conversation. Obviously that's not the best way to communicate it, but not everyone is great at communication, especially when it comes to sensitive topics.

And if it is an outside concern, then at least it gives you multiple approaches for solving it (i.e. pay advances, bonuses, etc). Money is no more than a means to an end in most cases, and if you approach it as "what are the needs that you have to meet" it's a totally different conversation that just "should I give you more money".

 

 

tedtschopp's picture

TL;DR:  You have a individual problem, an organizational problem, and probably an HR problem at the very least assuming the best intentions. If you want to truly fix this, you will need to address each.

I know from personal experience, that if you believe that you need more money to make your job 'acceptable;' you are wrong, and within six months you will still be unhappy.  

Now lets assume that he is correct in what he is saying: his way of bringing it up is hostile and assumes the worst intentions.  Y
ou should call his bluff when someone lays down an ultimatum like that.  This is a symptom of a much larger problem.  The disruption he is causing behind your back when you are not around is larger than the disruption he is causing by not being there.   This sounds dramatic, but you need a plan to deal with the fall out from someone like this.  

The next thing you are dealing with, if this is true is that the organization hasn't kept its promises.  That might be habitual, so the circumstances that created this problem are still active and present, you might have more pots ready to boiling over.  

The final thing you need to consider is that the HR process in your company is broken (compensation and/or recruitment) and you need to be aware of this broken process if you need to fill the spot.  You don't want to bring in someone else in who will then have the same problems in the same blind spots. 

Ted Tschopp
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campbellcj's picture

Thanks everyone for the great feedback!

We had a follow-up chat also including the company owner (my boss) and have decided to part ways. There is something going on here that money will not cure and I agree with the above that enabling and rewarding this sort of tantrum/extortion behavior sends the wrong signal to not only this employee but all others.

I'm not sure that ever can or will fully understand this employee or situation. In the meantime I have already on-boarded one new person who can cross-train and cover some of the departing person's duties, and I do have someone else on the bench to directly replace him.

timrutter's picture

Round of applause there Campbell. Substitute straight off the bench shows the power of patient work. Sounds like you can feel good about the whole incident

Tim

 

Breanna_Ileen's picture

good for you Campbell, employees like that is not worth keeping. He has other issues not just money, it's good that you let him go.

dmb41carter36's picture

Advice here was spot on. As a human though, I am somewhat worried about what caused a person to demand such a raise. I would seriously be considering weather this person has a gambling or drug problem. Perhaps their significant other has been laid off. Must just be the process improvement person in me, always wanting to understand the root cause!

All that being said, what do you did was correct. Way to go!