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I have read on several occasions that it's bad to compare your salary to your peers. I feel that this is often said to those with a below-average pay grade to prevent them from feeling bad about themselves.

One of the places I read about comparing salary is this question, that seems to be more about how to get people to open up about salaries. I don't really find that to be a problem, I've talked openly with colleagues and team members. For me, this led to (failed) salary negotiations and a job at another company, which I consider a good development.

There are cultures where talking about your salary is considered small talk. I've worked with a lot of Turkish people for example who were veey open on the matter. They seem to manage just fine.

I was recently hired by a manger who said it is very important to him that he can always explain the pay differences within his team. I'm very sympathetic towards this statement.

Q: What are the major pros and cons of knowing how you compare to your peers in terms of salary? What can you constructively do with that information?

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freekvd
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  • This has been answered before. Unfortunately it's hard to point out duplicates using the android app, but if you search you should have no trouble finding those answers. – keshlam Oct 07 '15 at 15:25
  • @keshlan I tried to look for a question. I found a lot of mentions, and some third-ranking (vote wise) answers to related questions. But if the question is out there, and both pros and cons are addressed, then please lead me to the answer :) – freekvd Oct 07 '15 at 15:31
  • I think people generally know the range. – Caffeinated Oct 07 '15 at 15:37
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    Here's the question I found - Why is discussing pay such a taboo? – David K Oct 07 '15 at 15:49
  • "What are the pros and cons of knowing where you stand, salary-wise..." - Do you mean just knowing or talking about the salaries? You may be in a position to know your colleagues' salaries. But it still doesn't mean you ought to bring it up as a conversation topic. Unless the conversation has to do with your review, raise possibilities, promotions, etc. – Brandin Oct 07 '15 at 16:30
  • @DavidK thanks for that link, it helped me but I think my situation is different. I changed the question to better represent this. – freekvd Oct 07 '15 at 17:22
  • @gnat that's it! Guess this question is done then. – freekvd Oct 07 '15 at 18:29
  • "That solved..."? – gnat Oct 07 '15 at 18:32
  • Might be a bug, I don't have the button anymore because I already declined the first suggestion. – freekvd Oct 07 '15 at 18:33
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    @gnat bug report – freekvd Oct 07 '15 at 18:44
  • @JoeStrazzere that seems over the top. In the first place, a person's salary is their own. I think it just means he's ok with people talking about it, and if that leads to questions they can ask him for clarification. – freekvd Oct 08 '15 at 04:55
  • It is bad only from a psychological point of view. otherwise knowing other people salary is good. I wish more of my co-graduates were quirk enough (as I did) to be bluntish about the request. It works more ofter that what people think. – Caterpillaraoz Sep 28 '17 at 13:48

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Discussing salaries causes bad feelings. Let's oversimplify. Consider two people who do a job that needs two skills, A and B, which are of equal value to the company. If I were to objectively rank these people, one is 8/10 in A and 10/10 in B, and the other is 10/10 in A and 8/10 in B. They make the same money but do not know this.

It is possible for these people to believe slightly untrue statements, such as "A is a way more valuable skill than B" or "I am 10/10 in both A and B". Even getting performance reviews may not cure people of these beliefs. As long as they keep these opinions to themselves, life is peaceful. Then one day the first developer discovers they both make the same money. If this person believes their skills are higher or more valuable than they really are, they will immediately feel slighted and unappreciated. In fact, it's entirely possible, and really quite likely that both people will feel this way, thinking:

I am 10/10 in the most important skill of this job, and 9/10 in the other; my peer is 7/10 in the most important and 9/10 in the other - clearly I should be paid more! What a giant ripoff this place is! How dare they! I demand a raise right now!

Giving either developer a raise will just make the other one mad. Giving both a raise won't help. Telling someone they are 8/10 not 9/10, or that skill A is not actually more important than skill B, will hurt their feelings. It will also probably feel like a lie that you trotted out after the fact to justify the fact you are underappreciating and underpaying your "Best" person - keeping in mind they both think they are the best person.

Nothing good comes of it. Feelings get hurt. People leave. You may think it's all logical and simple, but it's not.

Kate Gregory
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    It can be good and logical, only if you have good and logical and transparent systems which determine pay and everyone believes they are fair. But... who am I kidding :) – enderland Oct 07 '15 at 23:10
  • Most people believe they are above average. By definition of average, that cannot be the case. Half of us must be below average. How many people would agree that they should be paid below average? – Brandon Feb 12 '19 at 03:22
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I think this question depends on whether or not the company you are at has a set pay per grade/title and on top of that whether they allow for growth. I think the problem with most places is that regardless of title, people get paid within a lower/upper range depending on when they started and some "luck" if their manager really pushed HR to give you a higher pay.

Take for example the last company I was at. We had situations where managers, who let's say got hired 10 years ago, get paid LESS than the person he manages who just got hired 6 months ago. The reason is the company wanted to stay competitive in the market so they started paying higher to compete with other companies in the area. Once you get in the company, you get paid 2% raises each year and maybe, with some luck, a big bounce but generally speaking you only get paid within the range of what you were hired with.

With that said, yes, people can leave or demand the proper pay once they learn someone had a higher pay. Of course, if HR finds you told someone how much you are paid, that can cause conflicts.

Dan
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  • I believe a manager should only earn more if he's better at what he does than those below him are at what they do. And as they seldom do the same thing, it should boil down to who has the most valuable skill set. – freekvd Oct 07 '15 at 17:31
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    @freekvd The place wasn't about who had the most skills. It wasn't uncommon for the most skilled person to also be the lowest paid. The company has no established rank/title to pay and it all depended on when you got hired. If you got hired 20 years ago, you're the lowest paid person in terms of compounded pay. This is independent of your value. – Dan Oct 07 '15 at 17:37
  • @freekvd then why would anyone become a manager? – Pepone Oct 07 '15 at 19:12
  • @Pepone because they are good at it, and because they like to manage things. Just as long as they don't do it for the money, for the title, or to boss people around. – freekvd Oct 07 '15 at 19:19