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View Poll Results: Would you accept a promotion without a pay hike?
Yes 151 49.67%
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Old 8th December 2020, 23:15   #1
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Default Promotion without a pay hike

I believe that Employment is a mutually beneficial agreement between two parties. Simply put, an employee brings in a certain skill-set / service for which the employer offers monetary compensation. The employee may be one in a hundred, but the company will hire him/her only if their services are useful / required. In other words, the company needs the employee as much as they need the company. Hence, it is an equal arrangement. In an ideal world, that would mean no one party should be expected to deliver more without a suitable equal compensation. However, this isn't often always the case.

Case in point, the story of my 29-year old cousin. He's been working in an accounting firm--a reputed MNC, for almost 8 years. He was due for a promotion for the last 2-3 years, however it didn't happen for unspecified reasons.

Last month, he finally got promoted, but was not given a pay hike (reason? the pandemic and current economy). The company refrained from committing to a specific date for the hike but merely said 'as soon as things get better'.

My retired uncle, though initially disappointed, thinks it's alright given the company's reputation and the hope of a promising career in said company. But I don't.

I know for a fact that the company is not a good paymaster especially if you're on the lower rungs of the corporate ladder. To deny a hike despite a promotion is just pushing it IMHO. Basically, the company is asking him to take on more responsibility without compensating for it. It won't be stretch to say it'll be a whole year before he can even expect a paisa more towards salary.

Now, not only is it demotivating, it leaves one with a sense of being deceived. Plus, the cost of living is going up every day, so every hike counts especially when the next one is at least a year away.

I dare speculate that there exists this mentality (in some of us if not all, and certainly in my cousin) that the company is somehow more important than the individual and its requirements are more important than the individual's. This belief is so widely taken for granted that it won't bode well if we decide to strictly draw the line. (Example, we might ask our spouse not to phone during office hours, but we wouldn't dare ask our manager to not call us after office hours.) Most of us accept this (willingly or grudgingly) to a certain extent. However, it has become so chronic for my cousin, that he has ultimately come to accept a promotion without a hike and is trying to be okay with it.

Anyway, I asked him to start looking out for a better job, but my uncle doesn't want to hear of it. He feels it would be a waste of all the 8 years of hard work if he quits now. It's easy for me to argue otherwise but it will fall only on deaf ears.

I can't help but feel pissed off, especially when I know that my cousin is an honest, hard-working guy who's slogged his rear off these past 8 years. He deserves better.

Having said all these, I thought it would be both prudent and interesting to see things from another perspective.

What are your thoughts? What would you do if you were promoted without a pay hike?

Last edited by foxworkz : 8th December 2020 at 23:19.
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Old 9th December 2020, 00:50   #2
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Default re: Promotion without a pay hike

It’s an interesting question. My son in law here in the Netherlands faced a very similar situation. He is a journalist and for the last 12 months has been the chief editor of the company, without a formal promotion.

Here are my thoughts. I will never ever offer anybody advise on their career or renumeration unless they ask me specifically. Don’t offer advise without being asked!

In this case, he did ask my advise. My first question to him: well, what do you feel about it. Should the chief editor get paid more then the journalist he/she manages?

The only thing for me what matters is output and results. Here is the problem, people associate promotion with getting more paid more. But in reality things are a bit more different. It was one of the big issues I was facing when I took on our organisation in India. For years, if not decades, people had been getting raises and promotions, whereas the actual work they were doing did not change at all.

Getting a pay rise or a promotion are two completely different things. A promotion has to do with your formal position in the companies hierarchy. As far as I am concerned it does equate to pay rise perse. For me a promotion means a material change in the work and responsibility you have.

In order to get promoted there needs to be a vacant position in the hierarchy or a new position. Without a vacant position, no matter how big an organisation nobody is going to get promoted. There needs to be a vacant, or nobody moves!

I was the VP of operations in India. And till I moved onto a new position nobody could rise to that level in the hiŽrarchie pyramid. Everybody understood that, but it is the same on every level in the organisation.

In India I controlled an organisation of about 23000 people. Today, I have not a single direct report? Do you think that should make a difference in my salary? No, it is about what results I bring to the company.

You really need to distinguish what you are after. Promotion, e.g. vertical movement on the hierarchical pyramid, or a pay rise?

In India, with many companies, promotion means pay rise, but not necessarily anything else. This is a problem. If you just get paid more and more for doing more or less the same thing, without added responsibility, at some point in time you will find yourselves without work. Somebody younger, at a much lower salary can do the job at least as good as you can.

For me promotion is about personal development. When you get promoted you need to lie awake for the first couple of weeks, because there is so much new stuff that you need to familiarise yourself with.

Organisations are very good at recognising talent that always wants to be doing more. Everybody will claim to be wanting more, learn new stuff during their performance review. Very few really want to take a leap. The ones that do, often do so without formal promotions. They just get on with it and trust that the formalities will catch up with them. Perhaps your cousin is like that? He has worked there for eight years and I take it you have not. So, who would be in the best position to judge. A bystander, or an actual employee?

Promotion is never about working hard and making long hours. Many people do. It is nothing special. What is extremely relevant that promotion tends to get you into management territory. And not everybody is a managerial talent. So in many cases promotion is also about doing less content detailed work and moving to more general tasks and activities. Is that what your cousin wants?

So, if your cousin believes he is doing a worthwhile job, who are you to tell him otherwise? He should not be desperate for a promotion or a pay rise. He should be developing himself to the max. Volunteer for everything and then some more.

If you get asked to take on more responsibilities without a raise that is an individual decision. If, like my son in law, adds to your experience, it usually adds to your employability as well. Meaning you are less dependent on your current employer.

If they are asking him to take on responsibilities that nobody else wants to do, maybe that is a good moment to think through what is going on.

I would be very cautious telling somebody they are taking the wrong decisions in their career. It’s your cousin’s call. If he has got what it takes, he will be making the right decision.

Jeroen

Last edited by Jeroen : 9th December 2020 at 00:54.
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Old 9th December 2020, 02:58   #3
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Default re: Promotion without a pay hike

In india, a lot of companies take the whole "move up or move out" things to the logical extreme. If you spend more than 3 years or so in a particular role, you are seen as an underperformer, and a ripe candidate for being put into a PIP. This puts the mortal fear of stagnating into most folks, and instead of taking time to learn and grow, they power through job levels either through switching companies, or getting promoted by hook or crook.

It also helps that companies start valuing experience negatively beyond the 3-5 year range. Can you imagine someone with 15 years of experience in a mid to entry level role in any of the newer companies? I have relatives who worked their entire lives as clerks in a bank and retired. Think of someone retiring as a Developer in an Indian IT company. Odds are they will get force fitted into a management or some sort of specialist role, or performance improved out.

This perverse sort of simulated career growth is something that has been created to keep people running the rat race.
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Old 9th December 2020, 03:38   #4
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Default re: Promotion without a pay hike

WOW! Thanks for your detailed reply. I left out a lot of details to shorten the post. I feel I should clarify a bit. But I also have a few points to make:

Quote:
Originally Posted by Jeroen View Post
I will never ever offer anybody advise on their career or renumeration unless they ask me specifically. Donít offer advise without being asked!
Jeroen
Agreed. To set the record straight, my cousin involved me in the discussion and that is how I came to know of it.


Quote:
Originally Posted by Jeroen View Post
And not everybody is a managerial talent. So in many cases promotion is also about doing less content detailed work and moving to more general tasks and activities.

-

For me a promotion means a material change in the work and responsibility you have.
Jeroen
Yes, as you rightly point out, in many cases there are people who get paid more for doing the same work and it is considered (wrongly) as promotion.


In my own cousin's case, from what I gather, his manager had started relegating responsibilities suited for the post for quite a while now. He was also expected to deliver on his regular work. So yes, it was additional responsibility and commitment.


Quote:
Originally Posted by Jeroen View Post
So, if your cousin believes he is doing a worthwhile job, who are you to tell him otherwise? He should not be desperate for a promotion or a pay rise. He should be developing himself to the max. Volunteer for everything and then some more.
Jeroen
While I agree that there shouldn't be a desperation for a promotion or pay raise, i feel 8 years is a long time to be doing the same thing for very little hike (at least at his level). For me, the more acceptable conversation then would be for the organisation to put him on the right track for growth and support him after all these years. To make him "promotable".

Interestingly enough, my cousin was asked to clear his CA for the position (he was already pursuing it but hadn't cleared all papers). However, when he asked for time off for exam preparations (a week), he was refused leave. Instances like these give me the feeling that organisation (or rather his immediate boss) was not fully supportive.


Quote:
Originally Posted by Jeroen View Post
In order to get promoted there needs to be a vacant position in the hierarchy or a new position.

-

I would be very cautious telling somebody they are taking the wrong decisions in their career.
Jeroen
Again, while I agree with you on all points about vacancy and hierarchy, for me they are only one half of the equation - the POV of the company. Obviously, there is not much the company can do, but it would be a big problem especially if there is stagnation at the lower levels. I'd expect a high attrition rate in such a company.

Coming to the other half, what about the POV of the employee (one who's near the base of the pyramid)? Is he supposed to keep waiting for a vacancy to appear? Shouldn't one seek better prospects? With long years at the same place, it's only natural for complacency to set in. The comfort of the known devil is greater than the fear of going outside and discovering an unknown angel. Sometimes, a nudge is good. In this case, it was my own cousin brother who asked me for advise, so I don't feel I was out of line. It is still up to him to make the final decision; all I've done is shown him door no. 2. He'll decide if he's going to open it or not.


--

It's interesting to note that your view is from a managerial/company POV. (You're not the VP at my cousin's company by any chance, are you? HEH!)

On a serious note, appreciate your time and comments sir. Cheers.
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Old 9th December 2020, 03:54   #5
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Default re: Promotion without a pay hike

Quote:
Originally Posted by foxworkz View Post
What are your thoughts? What would you do if you were promoted without a pay hike?
Some of the titles are very confusing, and make it seem like a promotion. In the fabless semiconductor business, engineering resources are scarce (in Southern California) compared to Program/Project Managers. People congratulate the ones who transition into Project Managers. It is an industry wide fact that they are not awarded the same kind of salaries, perks, bonuses, and stock grants. The reason being, you can bring in a Project Manager from any industry to do things like triaging, status tracking, reporting and such. (overhead)

In any hiring event/open house, you would see handful of people lined up for Engineering positions, and a hundred for Program Manager positions. It really is like 1:100. So the compensation reflects this data. I am not sure if this data point applies to your case, but I thought it could be somewhat relevant.

Last edited by GutsyGibbon : 9th December 2020 at 04:16.
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Old 9th December 2020, 03:58   #6
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Default re: Promotion without a pay hike

I couldn't care less what my title is, the amount of money they are willing to pay you for your services should tell you how much you are worth. They could call me a janitor and pay me a few lakh every month and I won't care much.

Last edited by Chetan_Rao : 9th December 2020 at 11:37. Reason: Typos
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Old 9th December 2020, 05:21   #7
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Default re: Promotion without a pay hike

IMHO, taking on more responsibilities should be for the sole reason to prep you for new opportunities ahead. If you are being asked to do more but paid the same, it means the company erred previously in the roles that were assigned to you.

I don't believe in sacrificing my time, effort and the added stress if I am not being compensated for it. End of the day, the company wont look after you when they find a replacement to do the same task. Make hay while the sun shines - both from a learning as well as compensation perspective.

Needless to say, each one's personal situation and expectations are different, so the same stroke can't be applied at a generic level.
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Old 9th December 2020, 06:44   #8
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Default re: Promotion without a pay hike

A promotion is going up the ladder in the team hierarchy. Usually it will mean a pay hike. However in these difficult economic times, if I am offered a significant promotion, I will accept it without any salary increment.

On the same lines, if I am offered a worthwhile job in a different organization, I might take it up even with a paycut.
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Old 9th December 2020, 07:45   #9
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Default Re: Promotion without a pay hike

I voted yes to taking a promotion without a pay rise.
I would do this adjustment for a specific period and negotiate an acting up bonus, maybe 10-20% of current salary.
Each industry, company is different and so is each situation, your cousin has to think of the future and his relationship with bosses, HR etc, can he leverage this favour when things get better?
It will also help in the next job hunt (in case of layoffs) if you have experience/ title of a higher position.
Each situation is different and there are too many dynamics to give a one size fits all solution.
Negotiations can be done with the benefits being deferred for later in the worst case.
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Old 9th December 2020, 08:14   #10
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Default Re: Promotion without a pay hike

Quote:
Originally Posted by foxworkz View Post

Anyway, I asked him to start looking out for a better job, but my uncle doesn't want to hear of it. He feels it would be a waste of all the 8 years of hard work if he quits now. It's easy for me to argue otherwise but it will fall only on deaf ears.

————————————-

What are your thoughts? What would you do if you were promoted without a pay hike?
Those are two similar but completely different questions.


The first is to evaluate your cousin’s situation which from the limited info you have given seems to be a simpler answer (==move on), but the devil is in the details:
- is he happy with his current pay
- is his current pay better than the market average for the new position
And so on. One can give advice to him but he should know best.


The second can’t have a single answer. I’d say it depends on the situation. I haven’t faced the situation so far to be honest.


Edit: I don’t agree with Jeron on a few of the aspects he’s mentioned, especially with the notion of us Indians having the expectation to get pay hikes every year. Coz the growing market we live in demands that. Cost of living in India is going up every year. The case might not be same in every developed country for comparison. So I would say there is definitely a need for appropriate pay hikes every year, irrespective of the change in duties.

Last edited by ninjatalli : 9th December 2020 at 08:21.
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Old 9th December 2020, 10:18   #11
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Default Re: Promotion without a pay hike

There is money and then there is stature.

I would recommend, always take the promotion offered, money will follow subsequently.

You company will realize that you are adding more value and correct your salary sooner or later. OR some other company who values your expertise, will hire you at the promoted level (at the higher salary).
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Old 9th December 2020, 10:36   #12
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Default Re: Promotion without a pay hike

Voted Yes.

He is anyways fulfilling responsibilities. Therefore, two options are with him.

a.) Continue to have responsibilities without role or remuneration.

b.) Have improvement in formal role, but wait for change in remuneration.

From above two, I would choose second, for the time being, considering the current state on economy.

At the same time, He need to be open to switch company if there is any suitable opportunity comes, which gives both role and pay.
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Old 9th December 2020, 11:20   #13
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Default Re: Promotion without a pay hike

Voted No.

Since his promotion was already due for a few years, what the company did was not correct.
They may have their reasons but what they did was wrong.

It all boils down to how good the relation your cousin has with his manager. That should be taken into account for the final decision

What actually shocks me is that in our country, mentality is like that. I've seen so many managers/CEO's of startups defending 6.5 days working week without pay for freshers. Their argument: they are using our resources so why should we pay.
There are Youtube channels which show this and and are gathering hits.

Last edited by J4J : 9th December 2020 at 11:46.
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Old 9th December 2020, 11:22   #14
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Default Re: Promotion without a pay hike

Quote:
Originally Posted by extreme_torque View Post
I couldnt care less what my title is, the amount of money they are willing to pay you for your services should tell you how much you are worth. They could call me a janitor and pay be a few lakh every month and I wont care much.
100%.

However, you do know that this is almost the opposite in the Indian services sector where the Job Title is everything. Who commands more respect from the aunties and uncles at a wedding? The Software engineer at Amazon or the Delivery Manager at TCS? A good SE at Amazon may be making more money than a DM at TCS but hey that doesn't matter. Manager > Engineer any day in India

People will realise the invalidity of these Titles and Promotions (without pay) when they expand their horizons and work abroad/across multiple organisations.

To the OP: A promotion without a pay hike in the example you cited is just a validation of the point that the person's worth hasn't changed by 1$ in the company. As simple as that.

Last edited by kiku007 : 9th December 2020 at 11:23.
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Old 9th December 2020, 12:07   #15
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Default Re: Promotion without a pay hike

Quote:
Originally Posted by kiku007 View Post
However, you do know that this is almost the opposite in the Indian services sector where the Job Title is everything. Who commands more respect from the aunties and uncles at a wedding? The Software engineer at Amazon or the Delivery Manager at TCS? A good SE at Amazon may be making more money than a DM at TCS but hey that doesn't matter. Manager > Engineer any day in India
In that case you could tell them that you are a manager As far as being a manager in Indian services sector is concerned, the saying that "You dont leave your job, you leave your manager" is especially true in Indian context. I dont go into a job now and respect my Manager by default, they have to earn it, just like I have to earn theirs. I have come across very few managers in IT services that I really respect. Infact I can count that number on a single finger. So yes they can keep their title for all I care
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