Editor's note: Inc.com columnist Alison Green answers questions about workplace and management issues–everything from how to deal with a micromanaging boss to how to talk to someone on your team about body odor.
A reader asks:
I started working for a for-profit corporation after years of working for nonprofits. My current salary at the for-profit was already a significant raise from my previous job – which I am very grateful for. One of my direct reports was making about 15% more than me, but I didn’t care: he’s a specialist, and a rock star to boot, and I felt like I was being paid amply for the work I was doing. Come review time, my boss notices this “discrepancy” and, despite a review that showed solid but not dazzling performance, gave me a 20% “equity” raise, because she felt it was inappropriate for a manager to be making less than her direct report.
I should be thrilled right? Except now feel that I am drastically overpaid for the work that I do. I could have turned the money down, I guess, but (a) that would have been a disservice to my family and (b) I thought my boss would at best think I was a moron or, worse, been offended by my refusal.
But now I’m up at night worrying that someone will suddenly find out that I am not worth the money they are paying me. I worry that between my inflated title and inflated salary, the next job I take will either look like a demotion, or I will be massively under-qualified. And I just feel guilty and can’t shake it.
What do you think is the right thing to do? Should I talk to my boss about giving me more work and more responsibility so that I feel like I’m earning my salary? I do work hard – but I’m not working attorney hours by any stretch. Or should I just lay low and do the best I can, and not look a gift horse in the mouth?
There are two big dangers to being overpaid: Most importantly, it can make it harder for you to leave your job because everything else will feel like a pay cut (and this is especially true if you’ve raised your standard of living along with your income). You can mitigate this one by deciding what you think you'd earn somewhere else and then living as if that’s your salary and putting the rest straight into savings, so that it’s not impacting your day-to-day spending or your big ongoing expenses, like a mortgage.
Second, if you disclose your salary to future employers, it can sometimes turn them off from hiring you, because they’ll assume you’ll be dissatisfied with what they’d pay you and that you’ll continue looking for something else even after accepting a job with them. You can get around that by deciding not to disclose your salary, which is no one’s business but your own anyway. Some employers will insist on it, but often you can refuse to disclose, explaining that it’s covered by your confidentiality agreement with your previous employer (which it often is) or by simply focusing salary discussions on what you’re seeking, rather than what you were making. (And if you're lucky enough to live in one of the states that have made it illegal for employers to request your salary history, this won't be an issue at all.)
But more importantly, I wonder if you’re right that you’re overpaid. Just because you feel overpaid doesn't mean that you actually are, and it’s possible that your norms are off, especially if the nonprofits you were working for were particularly low-paying. (That’s something that can vary wildly in the nonprofit sector; some nonprofits pay terribly and some pay quite competitively, depending on the type of organization, its size, and its philosophy on talent.) You’re not overpaid just because you’re earning more than you were at a previous job, or even more than you were before this raise. You’re only overpaid if you’re earning wildly more than market rates.
So … Have you done your own research to benchmark salaries for the type of work you’re doing, in the field you’re in, in your particular geographic area? You might find out that your pay is actually perfectly in line with your field’s norms, and that’s where I’d start before concluding anything. (And I think this is the most likely outcome, because it’s pretty rare for companies to wildly overpay people, unless they have a specific reason for doing it -; for instance, as a deliberate decision to retain people longer than they otherwise might.)
If it does turn out you’re overpaid, consider it a temporary windfall to be stashed away. But absent other signs of arbitrary and wildly off-base decision-making at your company, I’d assume they’re perfectly happy with what they’re paying you.
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