Pay for What You Want

“I’m hiring an Office Manager and have found a really good candidate, Jane. I had planned to pay $15.00 to $17.50 per hour but Jane was only making $11 per hour at her last job so I know she’d be thrilled by $14. Do I have to offer her something within the range, even if she didn’t know the range?”

Your HR Survival Tip

While you might be able to get away with paying below the range you created, there are several reasons why you should stick with your range.

Pay for what you want done and then hold the person accountable for doing the job. You created that range somehow and it should represent the level and quality of work you expect for that pay. Offering a lower amount just lowers those expectations.

In addition, no matter how confidential we like to believe wages to be, employees talk… and those conversations are protected by California law stating you cannot stop them from discussing wages. Even if there are no other employees, it seems confidential information is rarely totally secure within the company. What happens when Jane learns about the original range or that other employees with fewer responsibilities are earning more?

Starting a position too low often means, at some point, you’ll need to provide an “equity increase” to bring Jane up to the level in the marketplace. If you don’t evenutaly pay in the range of other companies, you take the risk of losing her to another company. Even if you’re only focused on the money, keep in mind the cost of replacing Jane will be far greater than paying her a fair wage from the start.

This mindset of paying only a little above what someone was previously earning, instead of what the position is actually worth, has been the reason legislation is currently winging its way toward a new law. The proposed law will prohibit employers from asking about previous wages… just to prevent this type of below-market offer!

I happen to like knowing what candidates previously earned because it helps me determine if we are both wasting our time continuing the interview process. I also like knowing I can hold the employee accountable for the work itself because I’m paying a fair wage. What do you like knowing?