Bonus De-Anticipation

So much has been made about these crazy bonus payouts for bank execs which have remained unchanged or not significantly deflated in these crazy economic times. The fat wallets are easy targets, sure, and the anger is justified, but it does make you wonder from a human resource management perspective – what is the best way to reward and incentivize people? At my company our bonuses are clearly tied to performance. We set targets for ourselves at the beginning of the year, and if at the end of the year, we don’t hit those goals, we see a big hit in our year-end bonus. Having faced two major crises this year: 1) the impact of the peanut butter recall and 2) consumers having less discretionary income to buy the food we make, our teams are likely NOT going to be making our targets this year, which means, we’ll take a hit as a company (from Wall Street) and I will take a hit in my direct-deposited bonus. I am a lowly peon for said company, so honestly, I feel this is NOT a good incentive. I am doing my part everyday but I feel it is pretty far removed from our overall performance, so I wish I was seeing a more equal paycheck bump as many of my same-company peers who made their targets. However, in terms of sheer corporate “fairness,” our current system makes intuitive sense to by-standers.

I was relying on a bump about the same as last year’s bonus to meet my 2009 Net Worth Goal. But if it doesn’t happen, c’est la vie – I am young, still employed, and happy.

Starting Salary Figures Can be Deceiving

Some new Payscale research just emerged about post-MBA salaries. According to Business Week, who released the findings along with a handy table comparing schools, a lot of MBA programs highlight starting salaries, which are only one part of the picture. Equally, if not more important, is the salary range throughout your lifetime. They try to give you a sense of the ROI of your investment in going back to school. It’s a little deceiving as it only includes base salary (not stocks/options/benefits you could receive), but it’s still interesting to compare. For the two schools I’m deciding between it seems like Harvard is a better bet on every metric… but money’s not the ONLY motivator for me, clearly.

Harvard
Starting Salary (medians): $134,000
5 Years Out: $150,000
10 Years Out: $184,000
15 Years Out: $227,000
20 Years Out: $230,000

Stanford
Starting Salary: $128,000
5 Years Out: $139,000
10 Years Out: $148,000
15 Years Out: $179,000
20 Years Out: $202,000

'Above my Pay Grade'

I’m rather fond of the expression “must be above my pay grade.” I most often use it to crack a wry joke about something that is complicated to the degree of farce (ridiculous furniture assembly instructions or the insane views on foreign policy espoused by my uncle, for example).
But thinking of getting back to work in a few more days, and in the context of what I am actually paid, a pay grade speaks to a unit in monetary compensation – which my company employs strictly. And though some may disagree, I do appreciate this system (as opposed to alternatives of free negotiation). Some might argue that pay grades could be employed arbitrarily and that negotiation might enable employees to have more meaningful variables considered (like past experience and how much value those specific roles might bring to the current). I, however, would rather embrace these distinct levels, because my sensibilities are highly attuned to fairness (I blame my having a sibling remarkably close in age). In reality, I see that negotiation could really reward the best negotiators and the most obnoxious and whiny.

However, in researching a bit, I have found it interesting that legally, companies are not required to adhere to pay ranges of any sort, and more interesting to me, that if they do employ pay ranges, they are not required to publish them at all. In short, you can never be certain of fairness, I suppose.

What my company does disclose is their theory on employee market value. They maintain that they will always pay me at 85% of my market value. When my friend in HR tried to explain this to me, she said it was based on my skills in that role, and that I would move to the next role too fast to ever reach a level of 100% proficiency which would essentially equate to that 100% of market value level. Makes sense, but it still feels funny when I see that huge number listed as my market value and my salary listed well below.

But in this time, I know I would be grateful to be paid at 50% of my market value, so long as I kept that job.