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I hear Mark and Wendii often mention goodwill as a benefit that employees accept by staying at an organization. They also put it in reverse terms, that organizations have to compensate you when you come to a new job for your loss of such goodwill.

I understand their term of goodwill is essentially good reputation or good relationships throughout the organization. A well lubricated internal network allows more work to get done with less friction, and therefor in less time. This makes my job easier for sure. But it also makes me more valuable to my organization.

Why would another company pay me more because I begin less able to get my job done, for lack of an internal network? Why would my company pay me less because I am well connected internally and have great relationships?

I know salary compression also happens because there is a lack of market competition. I'm already there. But this goodwill explanation has never made sense to me. It as least *as valuable* to the organization as it is to me.

Please respond if you have made sense of this. Thank you!

pucciot's picture

Yes - I think I understand.

The pay for goodwill thing is very theoretical as far as I'm concerned.  In my industry, the pay is the pay.  They would pay anybody the same amount coming it.

But, let's take it as Mark and Wendii present it.

Goodwill already exists in a current job and it will make your work life easier and more pleasant; and it will be with better results.

Even though relationships are important, generally you are paid for results.   So yeah, better pay is partly a result of better relationships ... goodwill.

Why are folks paid for "goodwill" upfront when they get a new job ?  

If the jobs are equal --- by which I mean that this new job isn't a step up in responsibility and workload...

Because, the employee will have to expend time and energy rebuilding it.  And in the meantime, they will not have the results that are on par with the results of their previous job.

If the new job is equal in all respects - work, responsibility, and base pay - the higher bump in onboard salary for goodwill is an acknowledgement that you will have to expend extra time and energy to get the same results.  And the extra $$ softens the blow.

And it was that extra pay that enticed you to change jobs.

* That's the argument, I think.

It is a pretty academic discussion in my experience.

I don't really buy it much, myself.  Most folks take new jobs that are not equal to the previous job.  And they had other incentives to leave the previous job if the new job is equal or lower.

I understand the concept; but, as I said, in my industry, the pay is the pay,  I doubt most hiring managers in my line of work even know the concept of compensation for goodwill.  

Generally, we try to hire in at the highest salary that the org HR will allow.  We often hire folks in at the same pay that the previous person was making, regardless of experience or goodwill, because that is what is already budgeted for that position.

TJPuccio

 

 

 

edurbin's picture

Thank you so much, TJPuccio. That was an excellent explanation and some perspective too. Consider this your MT-forum goodwill raise.