employing others on higher salary

[Walkingwounded]

Wonder if anyone more experienced can give some advice.

I'm employed in a small professional services firm. A year ago, the company expanded. Four more people were taken on at my level (senior). Until then, I was the only one at this level.

Since we are private sector I guess, the salaries are very opaque. But I know from various (reliable) bits of information that all the new staff are all being paid at a much higher rate than me - we're talking between £10 and £20k. This difference has not been raised with me by my boss or by anyone else in the company.

I have always outperformed considerably, exceeding my financial targets by a great deal, and have contributed a great deal to the company being able to expand in this way. Whilst some of the new staff come with a track record of performance, others don't.

We have a bonus system, so possibly some of the difference will come back to me through that. But does anyone have experience of this? Is it normal practice in the private sector, and would they expect me to raise it with them - rather than them raising it with me? If it's up to me, how do I raise it?

Until five years ago, I was public sector, so I have absolutely no experience of this sort of thing. My boss is very slippery and hard to tie down on things like salary.

Reading that back I sound pretty naïve...but I'd appreciate anyone's thoughts. thanks.

In a small company it's unlikely you'll have pay scales. What your employer pays you and what you accept as payment are separate from pay arrangements with other people - even people doing the exact same job. Your employer is not obliged to pay you at any particular rate (other than meeting mimnimum wage requirements). Of course they may choose to pay you at a cetain rate, but legally, you can't force them to.

How often does pay get reviewed? Do you have an appraisal system? I would gather evidence such as advertisements for simlar roles, industry announcements, information from professional networks etc to build your case for a pay review and also keep a list of times when your performance has been exceptional. Focus on what you think you should be paid rather than what other people are paid.

that was all said with my rational head on but it does suck

They would expect you to raise it if you found out I imagine, yes! Did you find out by legitimate means?

Are any of the others doing the same/equivalent job men?

If you want it to change you need to raise it; whether they offer you an equal salary or move towards it will tell you how much they value you. If they are not prepared to do that then you need to consider whether it is in your best interests to stay there. Presumably they are paying new starters the going rate so you should be able to match or exceed it by moving on if they are not making a suitable effort to keep you.

Unless you earn an awful lot, 20,000 is a big difference assuming same job/experience/qualifications/skills. Make sure you're comparing like with like though, not unusual for one specialism at senior mgt level to be more highly paid than another if that is what the market rate is for that role.

As PP said, beware of other people having 'specialisms'/specific experience as they can be paid more for this.
I would raise it the next time your performance is discussed. Highlight how you are outperforming, etc but be careful not to compare yourself too directly to others.
Also, if you have found out the salary variation inadvertently be wary of saying you want a raise directly because of that. In many private companies discussing salaries/bonuses can lead to a disciplinary.
A private company probably won't have a pay scale the way a public sector place would, but they are likely to have something of a guide eg role pays 30-50k. If you can find this and where you fall on the scale you could ask for a particular figure/what you need to do to get there.

Also be aware that you may be rewarded more via your bonus structure. I used to work in a company that had expanded from being relatively small to much bigger operation. The original people were paid less but had generous bonuses and a much better pension scheme, the newer recruits got paid more on paper but had a nominal bonus and rubbish pension

To be honest, the only way I have found to address these kinds of salary inequalities is to find a better paying job and leave.

VeryPunny, that's also true - loyalty is rarely rewarded interns of salary these days

Thanks a lot for the responses. Sorry had to get the kids.

To answer a couple of questions: we don't have appraisals which are pay-related (or at least I never have). We do have quarterly management meetings where we explain progress against targets etc.

Pay goes up by inflation each year. Increases after that are basically down to the bonus system (which is the same for all).

I found out partly legitimately and partly because one of the new employees told me their salary. I don't know if that's legitimate or not.

The new employees are mixed men and women. I don't think it's gender discrimination.

I in fact have higher levels of specialism and experience than the new recruits (academic quals, higher levels of work, own client list etc). Which is partly why it sticks in the throat a bit.

Thanks for the tips about not raising others' salaries. I wouldn't have known that. Come from a culture where salary bands are public knowledge.

Looks like I need to raise it....plus dust off my cv in case not a good response. Thanks all.

Thought about it some more. Couple of questions. So in a private company, does it always come down to the boss' whim? And how, in that case, do you ensure that all are treated fairly - when there's no transparency or knowledge of each others' salaries?

My boss has favourites. I'm pretty sure I'm not one of them, although I'm his main performer financially. In a really opaque culture, what mechanism do you have to ensure you're paid commensurately to colleagues of a similar level? And what recourse if you're not?

I thank God every day I left the public sector, but the only thing I miss is the transparency on salaries. At least you knew where you were.

How long have you been there? Their higher salaries are probably due to market forces now, and as your salary is increased by inflation raises, it won't catch up with the market.

I worked at a private company, quite large, that did have salary bands. I went to see my manager about my pay as effectively due to foreign currency I was taking a paycut. He basically laughed and said that NEW HIRES, ie straight from university were being hired for the same wages as me. And here was I, teaching all and sundry, doing all the "hard" jobs the rest of the team couldn't/wouldn't do, and helping people more senior than me do their jobs. I did get a 15% payrise that year, but it was half of what I needed to get up to what I should earn. The following year I got 3%.

I ended up leaving, for that and other reasons. My new job got me a 40% payrise and respect. I will need to go back to the previous company at some point, and will be negotiating hard to go in at what I earn now or more, plus a grade increase.

I would imagine no recourse and no mechanism to ensure parity. This is in many ways a benefit of the private sector. Parity can promote mediocrity.

It is up to you to make sure that you are treated fairly. And it is your boss's job to pay you as little as he/she can to retain your services and keep you motivated in the role.

Those latter two points are your leverage - if you are a top performer and they would not want to lose you then you have something to negotiate with. Although you might be thrown by the discovery, you now have the information you need to push your salary/bonus up.

Note that you may need to look for employment elsewhere to really pin them down.

...and before I interviewed for my new job I did some research on what the market was paying, else I probably would have undersold myself! There are websites with salary comparisons like this type of thing www.totaljobs.com/salary-checker/salary-calculator

the others probably negotiated their salary, as you may need to if you want more

Right. Thanks. bohemond I think you have it. It's up to me to ensure fair treatment, and it's up to my boss to retain me for as little as possible.

HerRoyal, been there 5 years. You have it spot on. Glad that moving on got you the respect you deserve. Thanks for the link.

The thing I hate about it is almost the lack of trust. Like I can't trust the company to treat me fairly. I have to look out for myself.

God this is a world away from the public sector. Whole new mindset. Clearly I am going to have to get over myself, toughen up and learn to play polite and reasonable hardball.

Thanks all.

"It is up to you to make sure that you are treated fairly. And it is your boss's job to pay you as little as he/she can to retain your services and keep you motivated in the role."

I find that very cynical. Although many organisations may pay people as little as they can get away with, I would be disappointed if the OP or indeed anyone else reading formed the impression that that approach to staff reward and motivation is universal in the private sector, as it is certainly not.

I asked about men because even if the reason you are so underpaid compared to colleagues is not the fact that you are a woman, that doesn't mean it's ok for your employer to pay a man in a comparable role significantly more, and equal pay legislation is the one way an employee can address pay inequity. You may decide for political reasons not to go down that route, but it is a potential option open to you.

Agreed Flowery. However, I think assuming worst case scenario will gave the OP the motivation to shake things up.

Before becoming self employed I always worked for large companies in managerial positions where I think it is more likely that people can expect to be treated 'fairly'. Smaller companies probably less likely (and less cash to spread around).