Talking with a friend over margaritas last week, I learned that in her “Director” role, she works about 14 hours a day—sometimes even more. If you knew my friend, you would know that she has a very clear perspective on life. She is great with people. She is the life of the party and loves to have fun. However, when it comes to her professional branding, she does what she needs to do to maintain a positive reputation. Currently, this means working 14 hours a day.
During her time in this role, she has made some dramatic changes that are in the best interest of the company. She did receive a promotion to Director during her time here, which they initially tried to give her without a pay raise. She was already doing the job of the Director. The only strategy that worked in establishing a pay raise with the new title was threatening to leave. They couldn’t afford that. Her team of five was just her and one direct report at the time.
It took me a couple of days to think about it, then I decided to do some math. I don’t know what her salary is, as she has never disclosed this. So, for the sake of my math problem, I used an annual salary of $90,000. Based on the 2,080 hours a year a “full-time” employee works, she is making about $25/hour. At 14 hours a day, if she were paid hourly at $25/hour, including overtime, she would gross over $110,000 a year. When I shared this information with her, she mentioned a few other things that changed these figures, none of which were in her favor. She noted that there were weeks when they were short-staffed, so one of her more dedicated employees worked the same number of hours as her and ended up making more than her.
The conversation moved to the topic of pay increases and bonuses. The most recent “merit increase” that she received in conjunction with her performance evaluation, which came in at EXCEEDS, was 2.5%, the same as everyone else. I can only imagine how this made her feel.
In my experience managing people for over 26 years, I know there is a definite difference between what an employee contributes and what is expected of them in their role. Just because someone does their best, doesn’t mean they have met or exceeded the requirements of the position they are getting paid for. However, if a company is going to rate an employee as EXCEEDS on their performance review and hand out pay increases at the same time, giving everyone the same percentage is a sure way of discouraging the employees the company values the most, ultimately creating negative vibes.
This scenario sparked a few different topics that I’d like to explore in upcoming blog posts. Stay tuned for more on performance reviews, compensation, pay increases & bonuses, salary vs hourly, promotions, & how they all directly impact the vibe living in your company culture.