Let’s Talk About $$$

I’ve been meaning to write about how people in my kind of work get paid for a while, but it’s a tricky thing to talk about in any kind of publicly consumable form. That’s because people — even myself, regrettably — can get incredibly sensitive about how they and their co-workers are compensated. So let’s get a few things out of the way, for the sake of everyone’s emotional health.

1) I really like my current job, and I think I get paid a fair amount, based on my admittedly limited knowledge of the job market. I also like the way my company has handled talking to me about my pay, benefits, and everything else. So this isn’t any kind of reaction to my daily events — I’ve been meaning to write about this for literally years, but it’s a thorny topic and I’ve always wanted to get it right.

2) The only job I ever actually left over money was my first — in 2005, I got a job offer as a technical writer, which was a huge improvement from the peanuts I was making out of school as an support/email monkey. When I told them I had another offer, my department head at the time took me out for a sandwich and asked me if it was an offer they could match. I told him what it was, and he said “good luck, it was nice working with you.” Other than that, I’ve been fortunate enough to be able to pick my jobs based largely on opportunity over money (partially because my wife also works, and we haven’t had any mouths to feed).

Anyways, now that we’ve got that out in the open, let’s get started.

Three approaches to $$$

It's actually kind of amazing anyone was willing to pay 22-year old me $12.20 an hour in 2004, to be honest. It’s actually kind of amazing anyone was willing to pay 22-year old me $12.20 an hour in 2004, to be honest.

In my experience, there are three kinds of emotional/logical impacts salaries and money can have on people. Here they are, in order of complexity and general weirdness.

$$$ as a need

I don’t know if you’re aware of this, but you do need some amount of money to survive. Technically, you can probably survive without any money at all, but it’s very complicated — in general, there’s a certain income level most people need to be at in order to live normal, healthy lives, especially if they want to avoid constantly borrowing against their future. I haven’t had to make decisions based on this perception of money very often, but I’ve definitely been there.

When we lived in Cleveland, I had friends who thought I had a lot of money just because I didn’t take out payday loans or buy things on installment plans (instead, I bought almost nothing). But to me, barely being able to pay your rent without borrowing money from someone else qualifies as an appropriate time to start thinking about income as a need. When that happened to us, we left Cleveland for greener pastures (an option not everyone has) soon after.

$$$ as a resource

Most “regular” people (ahem) who are doing pretty well in the 21st century economy — i.e., usually college educated or at least highly skilled, in some kind of growth industry — don’t have to make money decisions based solely on survival. Instead, money is more of a tool or a resource that allows them to do things they want to do. Buy a house, have a family, take a trip, get a dog, watch movies on a big TV, play the piano, whatever. Everyone knows at least one person who’s taken a job they hate in order to get enough resources to do something outside of work they love, but in my experience most people regret it unless it’s extremely temporary.

I got the biggest raise I’ve ever gotten in my life in 2011, when I got another offer and considered leaving Bamboo. I didn’t need the money in order to pay my rent or anything, but it did allow my wife to work on her fledgling business without us reverting to Cleveland-style “don’t spend any money” mode, which was a huge improvement to the quality of our daily life.

$$$ as a scoreboard (eww…)

Now, where things get really weird and complicated is when people start thinking about money as something other than compensation — an indicator of how much people value (or should value) their opinion or judgment, how much authority they have to direct other people’s work, or how much responsibility they should bear for any problems the organization is having. This is why salary disclosure is such a minefield (it’s not necessarily bad, just complicated) for all but the most radically-transparent organizations — and why handling compensation on a strictly employee-by-employee basis can result in so many problems down the road.

I’ve never turned down more money from an employer (unless I was leaving altogether, which I guess counts), but I’ve also been very judicious in how tightly I tried to turn the screws in the few instances where I had a lot of leverage and was trying to get a raise for whatever reason. Part of this is just the way I’m wired, and some of it has to do with the fact that my work is often very deliverable based, so I usually have a really good sense of whether people value what I’m doing. When I’m outperforming my salary, I can usually tell. That’s probably not true for people wedged into some kind of byzantine, managerial structure where you’re not sure exactly what anyone does. I have plenty of friends in the latter situation, and a lot of them make more money than I do — but they’re also more frequently worried about whether they’re properly credited for success, or if they’re missing out on a potential opportunity for a raise. Since their value is hard to measure or even witness directly, it’s often determined by the dreaded “optics”, or how valuable they look. The sad truth of the allegedly efficient private sector is that many people make a lot of money simply because they’ve made a lot of money before, which creates an unhealthy incentive to “get there” as quickly as possible, by whatever means necessary. This usually doesn’t end well, and even with well-intentioned people frequently leads to insecure people with vague authority running around trying to be tangentially involved in lots of things so they look and feel productive.

Side note — one of the fun parts about being any kind of technical person is that you can often break this informal structure (the kind of thing various people I’ve worked with have referred to as “the game” or something similarly creepy and rich-person-sounding), and it drives people who depend on it absolutely crazy. I think that’s why so many executives and investor people are obsessed with figuring out a way to control how much software developers get paid — you can lecture those guys all you want about the value of different business units, or quote some book about organizational structure to them that dictates why they should do what you say, but at the end of the day, the person who knows how to build stuff have all the cards. Do you want this database to work or not? If you’re so smart, and I’m so dumb, why don’t you do it? Professional suits can pull this with work like pointless reports, boring PowerPoint decks, or other things everyone/no one is actually good at. But they can’t fake technical skills, and that doesn’t change no matter how much anyone gets paid.

My approach

I don’t think anybody — at least anybody I know — is completely above any of these motivations; we’re just all on different parts of the spectrum for each. Once I got settled in D.C. in my mid-20s and got a little momentum going, I went several years without thinking about my salary as meeting some kind of survival-themed need until we started doing the math about having a kid. Just like that, it was 2006 again, and I was biting my nails thinking about whether I could afford to go to Subway when I already went last week. I didn’t leave Contactually for a bigger salary, but the simple fact is that the (admittedly complex) insurance math that resulted had a non-trivial impact on my decision to join FiscalNote.

As for the “salary as a signaling device” thing… well, left to my own devices, I’ve never been especially curious about how much people get paid. What I need is pretty much exclusively between me, my boss, my wife, the mortgage processing guy, and maybe the guy behind the counter at Guitar Center when things are going well. But the fact is, a real-world office environment never really leaves someone like me to my own devices. The company has bad quarters, or someone underperforms, or somebody gets a big raise and then starts walking around like they’re Lumburgh from Office Space, and people start asking questions. Eventually, some number starts floating around — whether it’s accurate or not — and it’s hard for people with hopes, dreams, or actual financial responsibilities to keep from wondering if they’re being stupid for leaving money on the table. That’s the feeling you really want to make sure your employees don’t get.

I’m not sure exactly how you prevent it, but a lot of the best practices I hear out there are good places to start. Don’t hire people for the smallest amount you can get them at — pay a market rate as soon as possible. Try give people consistent small raises, instead of putting out fires by dumping big promotions on people who you’re suddenly worried about losing. Be careful just throwing around big titles to make less experienced employees happy in the short-term (especially when you can’t pay them enough), or you can end up with a company full of people who think they’re in charge of each other. Create real, time & achievement-based paths to advancement for people (think quantitatively and qualitatively), and make sticking to them an actual, operational priority. Remember that employment is a two-way street, and that employees who are also responsible, adult citizens are obligated to look out for themselves in ways that won’t always align with what your company needs right now — and don’t take it personally.

There’s also a generational component to compensation and promotion that I’m not sure even a lot of people my age (early/mid 30s) are able to fully comprehend. Remember, outside of government, careers are often constant works-in-progress. The days of digging a nice little cave in Accounts Payable and living in a big house in the suburbs are over — now, if you’re not moving, you’re dead. And while people pay lip service to this realization (often while clinging to one of these old school careers and complaining about young people), today’s 20-somethings are living it. Most of the professionally skilled ones are highly educated, and more-importantly, come from a world where some kind of performance — and acknowledgement of that performance — is the currency of their lives. In general, the young white-collar professionals I’ve worked with see their first job as a direct extension of their super-competitive college experience, where things are broken up into semester-length goals, and most importantly, there’s a clear path to advancement where not advancing is failure. That’s how school works, remember? I never really thought about things this way — I enjoyed high school, but never thought it was very good way to evaluate people, and I outright despised everything about the culture at my faux-elite private university. For me, joining the working world was exciting because I got to escape constant, often-arbitrary quantitative evaluation (getting a numeric grade for a written paper always made me crazy) and return to the more nuanced world of everyday professionalism. That’s not how a lot of kids are wired now, but it shouldn’t surprise anybody — we wired them that way so they’d get into these schools and these achievement/reward cultures in the first place.

Don’t blame people for being rational

Like a lot of things, I think the most useful quality in dealing with compensation is real, honest-to-God empathy — it’s the only way to figure out which of these various perspectives on money is currently driving a given employee, and respond to them with something that makes sense. If someone is freaked out that their career is stagnating, it’s important to be able to tell the difference between someone who’s dealing with a necessary ego correction, and someone who is legitimately scared they aren’t going to be able to survive the increasingly real pressures of the 21st century without making a career change. It’s easy to tell a 25 year old that “everything is going to be fine” when you’re the one who has the most control over that possibility. Do you know how much your employees pay for rent? Do you know what their student loan situation is like? If their parents are counting on them for support? You don’t necessarily need NUMBERS for these things (that seems a little too prying for my taste, and is probably an HR violation of some kind, anyways), but if you don’t know the relative impact of them on someone’s life, it’s easy to misinterpret why someone wants to get paid.

Besides, remember the last time you got a raise that changed the way you felt about your career? I sure do. Don’t forget how important that feeling is to people to who haven’t experienced it in a while. Or ever.