The video in this post has been trending on several social media sites in recent weeks. In our leadership training courses we have often discussed salary as a means of motivation with the delegates who attend the training.
The problem created by keeping salary information secret according to David Burkes is that it creates information asymmetry which leads to the possibility where people may get exploited or even in severe cases to total market failure.
I have often asked the question why people keep salaries secret and the question is answered to some extent by Burkes in this video. The point I often try to get across to participants in our leadership training programme is that there is not really such a thing as “fair pay” or for that matter “unfair pay”. Like the price of plane tickets (where no two tickets are priced the same), the reality of the situation is that two salary packages are very rarely matched. Even if you have two equally qualified and experienced employees working in the same job in the same department. Their salaries will have some variation.
Just like the complicated math needed to calculate the price of a plane ticket there are several factors that play a role in determining a person’s salary package. Factors such as skills and length of tenure as well as external things like market rate, cost of living, union involvement and the company’s policy toward pay all influence pay.
I often use the parable of the Laborers in the Vineyard to explain the remedy an employee has toward negotiating a fair pay package.
According to Matthew chapter 20 (ESV) the parable of the Laborers in the Vineyard goes as follows:
1 “For the kingdom of heaven is like a master of a house who went out early in the morning to hire laborers for his vineyard. 2 After agreeing with the laborers for a denariusa a day, he sent them into his vineyard. 3 And going out about the third hour he saw others standing idle in the marketplace, 4 and to them he said, ‘You go into the vineyard too, and whatever is right I will give you.’ 5 So they went. Going out again about the sixth hour and the ninth hour, he did the same. 6 And about the eleventh hour he went out and found others standing. And he said to them, ‘Why do you stand here idle all day?’ 7 They said to him, ‘Because no one has hired us.’ He said to them, ‘You go into the vineyard too.’ 8 And when evening came, the owner of the vineyard said to his foreman, ‘Call the laborers and pay them their wages, beginning with the last, up to the first.’ 9 And when those hired about the eleventh hour came, each of them received a denarius. 10 Now when those hired first came, they thought they would receive more, but each of them also received a denarius. 11 And on receiving it they grumbled at the master of the house, 12 saying, ‘These last worked only one hour, and you have made them equal to us who have borne the burden of the day and the scorching heat.’ 13 But he replied to one of them, ‘Friend, I am doing you no wrong. Did you not agree with me for a denarius? 14 Take what belongs to you and go. I choose to give to this last worker as I give to you. 15 Am I not allowed to do what I choose with what belongs to me? Or do you begrudge my generosity?’b 16 So the last will be first, and the first last.”
In relation to the topic at hand, the lesson for us in this parable is to be satisfied with the salary you negotiated for when you accepted the job. The landowner was not being unreasonable to the workers he hired first when he offered them a denarius in exchange for a day’s work. No, the offer was perfectly acceptable at the time. A denarius was considered to be a day’s wage. Their dissatisfaction with the salary only happened when they saw what the others were being paid. Their salary for the work they did was a fair wage and a fair deal that they happily accepted at the start of the day. Their alternative was not being paid at all for that day which would have been worse for them.
So our advice to you is this:
1.) Starting a new job
When negotiating for a salary when starting a new job do some research on your basic minimum “living wage” and your ideal salary. This allows you to present a range to the employer which shows flexibility. The reality is that the employer already has a salary range they have budgeted for and only exceptional situations could make them go outside this range.
2.) Negotiate for future performance
Most of us when entering a salary negotiation base our arguments on past performance. How about negotiating with future potential in mind? When discussing your salary expectations keep in mind what value you will add to the company and how you would improve their business if you joined their team.
3.) Take it or leave it
At the beginning stages of an employment relationship, particularly if you have not signed a contract you are entirely entitled to walk away. Don’t accept a salary offer if you are not happy with it based on a promise of a review at a later stage. The salary you expect to receive should be in line with your requirements as outlined in point 1 above.
4.) Speak up
Lastly, if you feel that you are underpaid or that you have improved your skills or education and have not been remunerated for it, speak up. Unfortunately most organisations are becoming so large that if you do not speak to someone about your situation you will have to be satisfied with an annual inflationary increase if you’re lucky.