[dbsanders]

I joined a company a little over 1 year ago, and just went through my first raise/bonus cycle. Some in my group have been here 10+ years, and apparently are paid substantially less, because of constraints on yearly raises. The employees like myself hired in the last year have a higher base salary, and it is more competitive, and necessary to attract good talent. I am thinking this must be a common issue.

I am a bit concerned with how our performance bonuses were allocated among the group. Even though several of us met all our goals and got great reviews, larger % bonuses were given to the longer-term employees to "make up" for the salary gap. So the performance bonus was based on something other than performance entirely. Three of us hired in the last year got almost nothing (3%), while the long-timers got 10-15%.

I understand bonuses are not guaranteed, but there was an expectation, from everything the internal recruiters and managers told me, that bonus was based on individual performance, and usually is 20-25%.

Is the new/old employee pay gap usually solved another way, or generally ignored? I just don't think it's right to use performance bonuses for this purpose.

[dontknownuthin]

There's nothing wrong with making an adjustment with the performance bonus to fix a problem of unfairness in salaries. As you have stated, newer same job employees were not being paid as much as the lpong-term people, which is grossly unfair. Those with more experience and proven loyalty to the company certainly should earn more than new people.

What can happen is that a company will study fair salaries when hiring, and then if they don't hire new people for a while, can fall behind industry standards and not raise those people's salaries enough over time to keep pace with cost of living and other factors. Then when they want to hire some additional people, they learn that they've been underpaying those already on the payroll - they learn this when they realize that they can't hire new good people for what they've been paying.

It appears this happened in your organization, so they took the opportunity to make it up to their long-standing employees.

As concerns your hoped-for higher bonus, as you said, it was not guaranteed. It might make you feel better to know that just about everyone I know has taken a cut in pay within the past 5 years. If they haven't taken an outright pay cut, they have had several years with lower or no bonuses, or have been asked to contribute a higher percentage to their health plan, or have lost other benefits like 401K company-paid contributions, or there's been no profit-sharing to speak of because companies have been barely making it.

Your bonus is far more than most have earned in recent years. It could also mark a shift in your employer's thinking from giving low base and higher bonuses, to giving a better overall salary and more moderate bonuses. This kind of a shift is to your benefit, so I would not complain. It would also be best if those longer-term employees were also given big raises to bring them up to parity with you newbies. I would certainly not complain if I were you - your employer is trying to reward and keep their long-term employees - they hired you at a more fair salary to start with. One day you'll be the long-term employee, and it will be great if this is their precedent and that they reconsider your salary when they bring on newer, more expensive hires and find that they have fallen behind in paying you!

Further, you should not know what anyone else in your company is earning so I certainly would not discuss this with anyone. Nothing unfair has happened to you, so be glad for a well-paying job.

[dbsanders]

I feel your response is one of those "you're luck to have a job" type of response. I have no problem getting and keeping jobs in my field, so I don't feel the same way as many others around the country I suppose, and taking pay cuts is not something I've ever considered normal. Yes, I am "lucky", but it's on purpose.

I guess there's nothing legally wrong they did here, but maybe they need to be more careful with setting expectations when hiring. I was lured away from a job paying huge bonuses and told things would be very similar here. If they continue this same strategy - paying bonuses only to the lesser paid employees and not giving raises to anyone - then that means there is no growth opportunity here, and I will be force to move on.

Thanks for your expertise and opinion.

[dontknownuthin]

Bonuses are discretionary unless you have specific terms in a contract. They are trying to make things right with fairness for the staff. You think you deserve this higher salary, but seem to think that the people who have been there ten times longer than you have deserve less than you. That's kind of wacky and if you make that complaint in this company, it's not going to end well for you.

In fact, going to an employer with any complaint based on comparative salaries, unless you have a collective agreement through a union or a contract that they are violating, or are in a public job with published salaries, is not going to go well for you.

If you feel the distribution was unfair, you can complain based on the merit of your record alone and the terms they negotiated - that a totally satisfactory review would net a 20 to 25% bonus. If that wasn't promised to you, then you have no basis to complain and had no basis to expect it. They don't owe you what your last employer paid. They owe what they are willing to pay, and then you decide whether to take it.

If you feel they've been unfair, get another job. To hear you say it, jobs are falling out of trees these days and you can have whatever job you want. I hope that's true but have to tell you, I hope you don't say that kind of thing out loud to people because it sounds very entitled and arrogant.

[dbsanders]

I never said I "deserve" more, than the others. I am part of a very good team and they should be paid in line with what new employees are getting! I just have a problem with they method they are using to "solve" the problem. If the people are under-paid, then pay them more. If new employees make too much, then don't hire them at that salary. Just don't promise more than you're going to deliver. I don't mean to sound arrogant, but I do have recruiters calling and emailing almost daily with new positions available. At least in my field, lack of jobs is not an issue here.