The $70K Salary Experiment

Remember a while back when a company in Seattle wanted to pay all its employees $70K a yeah no matter what their job was. Well I do, and now it has been over a year since the implementation of the program.

I remember hearing about this a while back and really wondered how it would effect this guy’s business. I am no business guru, but things like this can sometimes be disastrous, meaning that some employees may just take the salary and sit back and do nothing knowing they are overpaid. On the flip side they may also work harder to earn that inflated salary. As most times in business it is hard to tell what will happen as people are unpredictable at best.

Today I came across this article that outlines what has happened in the last year. It is pretty interesting for a few reasons. The first was the overall happiness that each employee has at the company. Many of the employees polled said how happy they were because of the salary increase. I have worked at some places where morale was rock bottom and everyone bitched about everything, and I mean every-thing! As always one of the main things was pay, everyone felt that they were underpaid, and when looking at it and the experience involved they were right at my last company. Soon everyone started leaving and the company was having to replace 10-20 employees in a calendar year. That may not seem like a lot but this was a small firm of less than 100 employees. That is about 20% of your work force, so yeah that is a big deal. Having to replace that much of your workforce can be detrimental to the product that you produce.

So I think is some regards money can buy happiness. Which, whoever said this was a moron, or the statement should at least have a caveat to it. Money can buy happiness as long as you spend it correctly. What I mean is that using your personal money to buy things and stuff will probably not ultimately bring you happiness. However, using your cash to purchase experiences can bring a lifetime of memories, things that are priceless. So going on a nice trip to an exotic place will certainly bring you more joy in the long run than buying that Louis Vuitton hand bag.

What is interesting is that the article also talks about this – a single mother used the extra salary (which was double what she was making before) to move to a better location closer to work and to take her children to Disneyworld. Which is not only an experience for her but a very memorable one for her children. Again money buying happiness. The other phenomenon that happened was the baby boom. The article states that now 10 employees are expecting children. Having financial stability is something that can help raise a child as I think it is safe to say that children are expensive, VERY expensive. So again having this luxury has certainly changed a lot of lives.

While reading this I am certainly not sure this would work for all workplaces or industries. But I think what employers fail to realize is that constantly underpaying and giving employees the bottom dollar can and will often backfire. I myself am underpaid for my experience. I am not just saying that because I want more money (although I certainly do), but I found this website that will tell you about what you should be making (on average) based on your title and your experience. Pretty cool and also a good tool when it comes to negotiating salary. Plus you will have some reasoning as to why you are requesting the number you are.

I think it is important to know your worth when looking for a job. Also in doing so you can have something to fall back on if an employer ask why you think you deserve that salary. Recently at a job interview I had the director of the company directly ask me what my currently salary was. Quickly I thought that there is only one real reason why she wanted to know this, so she could try and find the lowest number they could get me for if they wanted to offer me the position. I told her that I did not feel comfortable giving her my current salary. I really wanted to ask her what she made just so she could she that the question was somewhat uncomfortable.

I have been on tons of interviews and it is funny how just because your interviewer is on the other side of the desk they think they are privy to special information, or that you have to answer every question they have. After I said I did not feel comfortable telling her that info her response was, “Well, it makes it difficult to take you seriously as a candidate.” So again that just solidified my logic of them finding the lowest number they could offer. I responded, “Why does BLANK Company need to know my salary?” “We don’t,” she said. HAHA well then why did you ask!

Needless to say I did not get the job and I am somewhat relieved, although the increase in salary would have been nice. That question still makes me mad when I think about it. O well. I think a better way of going about this situation would have been asking, “What are your salary requirements?” That would have put the ball in my court for a chance to explain what I wanted as well as why I felt that was dollar amount viable. If I am ever asked this question again I will still not tell an employer what I currently make, it just gives them fodder to try and get you if they want for as cheaply as possible.

I have read a lot about this question and there are arguments for both sides, but, personally, I feel it’s better not to tell. Instead redirect the question as to what you are looking for and why. I am of the mindset that what you are making now is mostly irrelevant. It does not matter to the company you are interviewing for, other than to try and get you for bottom dollar. If you work for free at your current company and you tell your new employer that, will they intern offer you $1 to draw you away? Probably not, and I know that is a weird example. But what you currently make makes no difference. Again you may be extremely underpaid at your current position and going to a different company will get you back in line with you position average.

I know we are a little off topic but I think the $70K experiment is an interesting one nonetheless. As I said above know your worth that could certainly avoid some headaches down the road. This has been your career advice for the week sponsored by Manik Creations.

Manik

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