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I recently reviewed on of our branch offices. The teams were very fragmented under our current manager. Three teams of 1 under our Technical Services groups. They really didn't report under our current team structure and really not at all.

I reorganized the teams so all our technical services people report to our current manager for technical services -(was a team of three) and now will be a team of six.

My direct came back after the weekend and requested a large salary increase as he is now managing "twice the people" - This was mostly an organizational effort and that these people now are all in the same staff meetings get the same communications and more collaboration.

What are some guidelines I can use for what is fair, when does additoinal staff mean extra pay? To me increased profits means extra pay. To increase costs without performance (profits) is not a good business decision in my mind.

Do I back out of the direction I've taken?, just say no or ?????????????

jwyckoff's picture

[quote="bwaege"]
Do I back out of the direction I've taken?, just say no or ?????????????[/quote]

If you did take a direction, I don't think you said it in the post.

My thoughts:

1) Evaulate if there is a signficant job change. If this person's duties and responsibilities significantly change, then consider a pay adjustment
2) If you want to adjust her pay (based on above), I agree you should wait till she "earns" it. Determine what that is, and communicate it with the DR. If she meets your goals, and she is doing the job expected of her, then pay her appropriately.[/list]

tcomeau's picture

I've been on both sides of this experience in the past few years, and the bottom line (to be BLUF) is that you should not adjust compensation until there is a change in results.

A few years ago, as a result of a reorg, the size of my staff doubled. My job also got more complicated because we went to a matrix organization. I did not get a raise. Then in February of this year, my staff was split up in another reorg, and my pay did not get cut. Then I agreed to manage a different group, but for the last three months I've been managing both the old and new groups while they look for a replacement for the old group. I am not, however, getting paid twice. (Though that would be nice!)

One of my project leads has gotten slightly larger teams over the past few years, and every time we add a person to a team he argues that he should be getting a promotion. (There is a technical ladder, and he wants to go up a rung.) Each time, his manager (he's had a couple through the reorgs) has to explain that we promote people based on sustained improvements in performance.

I think of it like responsibilities versus accomplishments in resumes: The guy with only responsibilities may as well have been fired. (I heard that in a 'cast recently.) You don't get hired for responsibilities, and the same thinking should apply to promotions and increases.

tc>

jwyckoff's picture

[quote="tcomeau"]You don't get hired for responsibilities, and the same thinking should apply to promotions and increases.
[/quote]

Well put!

ccleveland's picture

To further add to Tom's point: It seems the message that you want to deliver is "reward for performance."

Your direct's past performance has led you to believe that he can handle the additional responsibility of more DRs. Refer to past performance reviews, feedback, etc. to show how your confidence has increased as his performance did.

The key is to make sure your direct understands that the additional responsibility [i]is[/i] a reward. When your direct asks for more money in addition to the change, it makes me think that he does not appreciate the opportunity for growth.

On the other hand, perceived inequity ("my salary is too low") can be a huge demotivator. You should check (your HR group?) to make sure that his salary is in line with others with similar duties and responsibility in your organization, industry, and region. If you don't clear the air on this point with your direct, it could fester and cause problems later. You could "normalizing" his salary or make sure he understands how his salary is justified and what he can do to make it better.

CC

jhack's picture

There are many data points missing here. What was his latest performance review and what did you tell him to expect this year? Was he responsible for the ineffective organizational structure? To what degree was he involved in the planning for the reorg?

All that aside, my initial response is to tell him No.

Do not back away from your re-org unless you think it was wrong. If he's the wrong guy to manage the new structure, that's a different issue.

Finally, did you not know from your one-on-ones how he would react to such a change? You shouldn't be surprised by his reaction.

bwaege's picture

Thanks for all the reply's --
A few more pieces of information --

1. I haven't implemented this with staff yet. Staff is not aware of any changes on the re-org. Only discussion of this has been with the direct. I can say tell him this isn't what I expected and understood and say I will have to reconsider this.

2. The direct was agreeable to moving these staff members into his team when discussed. He came back after "thinking about it more over the weekend" with the request for a pay increase. It is actually this item in particular that throws an alarm up for me.

3. He also is being offered stock in the company (We are privately held) We pay dividends based on bottom line retained earnings of course. I feel he is thinking like an employee and not an owner or part of the team --
4. The team size he manages has fluctuated up and down over the past 3-4 years with this not being a point of discussion.

pneuhardt's picture

Does the "thinking about it" and requesting more pay sound troubling? Not really. Hey look, it's part of the business world for employees (and managers) to evaluate their situation and ask for improved compensation. I'm sure there could be a Manager Tools podcast on how to do it the right way.

What would throw an alarm to me is that he feels he "deserves it" simply for the increased head count of directs. That isn't how management works. As others have said, it's increased pay for increased results. I agree that some increase might be justified after he has proven himself capable of managing a larger team. But not a substantial one unless either the responsibilities change substantially (which you say they did not) or his results change substantially.

This is an opportunity for him to show what he's got. Or, potentially, what he doesn't have. The request for more money isn't the issues. The real issue is how he handles it after you say no.

Assuming, of course, you say no.

thaGUma's picture

Salary wasn't discussed when the change was made. You are perfectly within your rights to put off any pay increase until benefits of re-org are materialising.
If your direct hits targets then there is a case. But as already said by others, the results are needed first. He needs to step up to the mark before he is rewarded.

I would be concerned that he has asked for a large raise that outstrips the change in his job. As a manger with x no of directs, the addition of more directs to a good manager can be taken in his stride (hee hee, be evil and suggest that one!) as all the processes are in place. He will simply be doing more of the same.

Chris

kklogic's picture

[b]2. The direct was agreeable to moving these staff members into his team when discussed. He came back after "thinking about it more over the weekend" with the request for a pay increase. It is actually this item in particular that throws an alarm up for me. [/b]

Don't discount the power of the spouse. "Honey, I'm getting two more reports!" "Great, how much of a raise did you get?" And so on.

Mark's picture

He doesn't deserve a dime.

Mark

cwatine's picture

Anyway :
- you pay him on results, not on efforts
- you pay him on accomplished result, not on results to come

So he gets the opportunity to get a raise or bonus in the future. Nothing for now.

mauzenne's picture

I have very little to add here ... looks like everyone has it nailed.

I, like many I'm sure, have had this happen to me. My response was identical -- "You are paid for results, not the size of your organization. I've just given you more resources. If you are effective, you will leverage those resources and produce significantly greater results ... and be rewarded accordingly. I'm confident you will take advantage of this great opportunity."

Mike

cwatine's picture

Yes, those things are often obvious when you have had some time to think about them.
But it is not always like this when the question suddenly arise.
And you have to have the reflex [u]not[/u] to answer right away if you are not sure about the correct answer to give.