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Insiders should always welcome with open arms the outside hire who is paid more. It gives them excellent leverage for asking for a raise. Before that person arrived, they might not have had a good reason to ask for one and it increases the going rate in the company for their job.

The downside of that approach is that most managers are coached in how to deal with employees asking for off-cycle raises. A common response would be that they won't talk about other employees, as it's no one's business. Thus the employee asking for the raise is put on the defensive from the get-go. And if the only reason they have to ask for a raise is that "Bob gets paid more", the argument is weak.

Does the complainant really know the new hire's background and experience, or just that the money is more? Often times people make the wrong assumptions, based on partial information.

What usually happens, whether ancillary raises are granted or not, is that morale and team effort in the department suffers when an outside hire making more money is brought in.

I think a key point is missing in this discussion: it's not about experience, knowing the company or not knowing the company, or even being "rewarded" for being a dedicated employee for X number of years. For an insider OR an outsider, it's all about ACCOMPLISHMENTS. What have you done to demonstrate that you have DIRECTLY contributed to the productivity, profitability, efficiency or effectiveness of the company? If you can't draw a direct line to that, you have a weak case.

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Wally Bock

Old story, constantly repeated. Insiders suffer the curse of being known: more important than their strengths, their weaknesses are known. Therefore, hiring managers following the typical heuristic CYA process will rarely select an insider "already known to be fallible" over an outsider with a sparkling resume, impeccible credentials and impressive interview-handling skills. No one will be blamed if the outsider is hired and fails... it's totally SAFE, because no one could have forseen their flaw; unlike what happens to the manager who hires the insider with known weaknesses. When viewed from the perspective of the downside risk of hiring an insider, it's a miracle that any ever get the nod.

An interesting perspective, Jim. Has anyone ever considered you a cynic? While I don't agree with you in terms of general trends and common practice, I have seen isolated instances of exactly that CYA behavior.

These types of discussions are ongoing -- in fact I just had one with one of our BU HR VPs yesterday.

Interestingly, we were on the same page -- we are both supporting the promotion of an internal candidate (at a VERY large pay increase in order to position the employee within the new salary range). We're anticipating executive leadership push back, but are standing firm in our recommendation. Wish us luck!

I can anticipate executive leadership saying, "how much?". Which is when the employee's performance and pay history are reviewed, looking for justification or counter-arguments regarding the VERY large pay increase.

You didn't mention where the employee would be positioned in the new salary range, but if you have to grant a big raise simply to reach the minimum, that would be further ammunition that the internal candidate isn't ready for the new job. Good luck!

Yes, we're anticipating that, Chuck.

The employee is a very high performer in a different, lower-paying geographic) location we're shutting down. Unfortunately, that location did not receive pay increases for a prolonged period of time and some positions may have been paid consistently below market to begin with. The plan is to relocate the employee (who we've already invested in via tuition reimbursement) to leverage the "intellectual capital" we have and not prevent it from walking out the door.

Thanks for the feedback and opportunity to further refine our case! ;D

Glad to hear, if my jaundiced cynical views are being disproved by current more enlightened practices! Just take it as a cautionary note, then. The Halo effect usually works to the advantage of the outsider whose limitations are less obviously apparent if they have passed many levels of elimination before being selected; all those who choose them have a vested interest in their success. Remains depressing, though, to see firms still more willing to give "the right" pay to an outsider over an insider better known but for whom a corrective adjustment would admit past management error. Ergo, the old saying, "Best way to get a raise is to quit and get re-hired."

There is a lot of truth in what Jim is saying. I do not believe he is being overly cynical.


Reference your comment above---do the employees in the office really know the qualifications of the outsider?---they usually do because they've seen their resume in most cases as a part of the interview process. In many offices, they participate in the interview process, and companies that try to keep the resume confidential, only arouse more suspicion.

Also, this idea that management says to employees---we don't talk about other employees---sounds like something that happened when employers believed that bullying employees and curt answers was a smart approach. Today, enlightened employers maintain a more open, intelligent dialogue with their employees. This "tough" guy approach seems rather old school and characteristic of the "Russian" school of management.


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