WWYD

[Octopusgames]

I am struggling with a work situation. I started a new role in April last year. It’s my first director level position. I have all the qualifications and experience needed and I am good at what I do. I was interviewing for other similar roles when I took this one. I was offered £70k, which is probably on the low side but I work from home and I don’t spend any time or money on commuting. The only person earning more than me was the owner/managing director. There were 2 other directors who were much older but earning less.

I passed my probation. I did some great work. 6 months into the role, I was called in for a ‘pay review’ meeting. I had no expectations of a pay rise at this point. The MD told me you need to speak for yourself etc etc. An external consultant and the MD were in my meeting. The consultant did most of the talking. It was a terrible meeting. The consultant kept on saying “we” referring to himself and the MD and made me feel like I was not part of the team. I was told that I was hired at great cost to the business, and that in other businesses he had been at there should be no pay rise for a year at least. Then he set 2 quite ambitious targets that I should meet. I came out of the meeting deflated. The MD barely said a word during the meeting. At no point did he say that I was doing a good job or anything. He later apologised to me about how badly the meeting was conducted. He also said several times how happy he was with me and my work. At this point, none of the other directors got a pay rise.

Months later, I advised that we needed new roles at director level, and made the business case for them. MD agreed. We are now recruiting for them. He also decided to review the other directors’ salary. With the new review, everyone at my level will be earning a performance based bonus. They will be at £88k while I will stay at £70k. I told the MD that it felt unfair that everyone else is being rewarded when I set the strategy but he did not go back to include me.

I feel so undervalued and feel that the MD really does not value me as much as the other directors.

On what basis/reasoning were the other directors given a performance related bonus?
And on what basis were you excluded?
Is the capacity to earn a PR bonus written into your contract, objectives, or targets?

We’ve never had performance related bonuses previously. There is nothing in anyone’s contracts.

We are getting a new sales director who will earn bonuses based on sales and profit. The existing operations director will earn extra bonuses on sales, costs and profit. I have no impact on sales or costs directly so I’ve just been excluded.

It's common for sales directors (and anyone else who has a direct capacity to generate sales) to receive commission based on sales and it's common for, say, finance directors and HR directors to not.

Book in some time with the MD to have a calm and sensible discussion about why you were excluded from the pay review in general (or is the rise to £88k all due to PR bonuses?)
Also consider whether there is anything that you could have a PR bonus based on (eg, one or both of the targets suggested in the meeting with the consultant if appropriate; or adhering to deadlines or delivering ahead of deadlines; or staff retention if you're in HR; or financial processes like cashflow targets or cost reductions, if you're in Finance - but if you do this, make sure that these are targets that you could sensibly influence and achieve).
Or consider whether it would be fairer for all of the directors to have a PR bonus based on overall profitability (For instance, in your company, will the operations director actually be able to impact sales - will that not fall to the sales director in the future? because if won't be the operations director then it's somewhat meaningless for them to have a bonus connected to something they can't control and an overall profitability bonus for all the non-sales generating directors may make more sense).

Although it is understandable that you feel undervalued, take any emotion out of the discussion.

Is there any feature protected by equality law that sets you apart from the others? If so point it out in writing to the MD as he risks and you would have a case for discrimination and constructive dismissal.

Was your job given a pay evaluation to define it at £70k when you joined?
Not all Directors roles have similar weightings. Some have more, or less, responsibilities. It is not reasonable to expect every Director should be paid the same, it will be role and content qualifiable.

I’m not sure but it sounds as though what you are saying is that the new director role and the other 2 directors have the ability to earn up to £88k but that’s dependent on performance related bonuses? So if they don’t perform, they could still end up earning less than you? Is that correct?

To be honest, I agree with the consultant. I wouldn’t expect to give a new employee a pay rise before they had been with the company a year if their role is the same as when I hired them.

Judging by you knowing people’s salaries I assume you are a finance director or hr director? I’d be very careful of using your privileged knowledge of other directors salaries as a way of negotiating your own salary.

Are the directors getting an increase men?

If your department/role doesn't directly generate profit for the business then I could see why you might get less. Than a sales and operations director if they were bringing in/producing more clients/work. But I'd still be furious. I bet you wish you'd kept your mouth shut.

You need to find out what market rate is for your job and take your feelings out of the equation - then present the business case why you are underpaid on the back of that.