Friday, 10 October 2014

Don't ask for a raise; ask for a drop !

Microsoft's CEO, Satya Nadella got himself into a pickle yesterday. He was asked at a women's forum what women should do to get paid more. He replied "It’s not really about asking for the raise, but knowing and having faith that the system will give you the right raises as you go along,” he said, adding that such patience was “good karma”.

In this politically correct world, he was, of course, asking for trouble. He has been pilloried and the only sensible PR thing to do is to grovel and apologise. Women are paid less than men, in some places (although I challenge anybody to prove this in the IT industry. I know this industry intimately. No sensible company pays women differently from men for the same job. There are less than 50% women in the IT industry, and a lot less in senior echelons,  but that is due to a whole host of other reasons, not unequal pay).

I have no desire to incur the wrath of the politically correct. So I am not going to debate whether Nadella should grovel or not. Instead, if you eliminate the gender factor from the equation, I think he was making a fair point. In fact, I would go a step farther to say that in some instances, we should be asking for a pay drop; not a pay rise !

Labour , and skills, are a commodity, like any other. Price depends on demand and supply. Every commodity's prices go up and down (even gold). Except an individual's salary, which goes only up. Unfortunately , we have been conditioned to expect a salary hike every year and that the more it is the better. Actually, the worst thing that can happen to us is that we get a fat salary hike each year. For, if we keep increasing our "price", a time will soon come when we have become outpriced. At that point, we are sure to be sacked. If collectively everybody in our unit does this, the unit will be shut down and the jobs moved somewhere where the wages are lower (probably overseas). If one is an outlier, then you can be sure that the person would be fired under some pretext or the other and we will be replaced by somebody cheaper. This is the brutal fact of today's workplace.

The trick is therefore to price yourself, just a shade below market. That way, the company cannot afford to sack you. If that means taking a salary drop, then so be it. In fact, as you age beyond 45, I submit, you should be looking to a salary drop every year. There is a far greater age discrimination in the job market than gender discrimination (try getting a new job when you are 50).  The only way you can continue to age and survive without being fired, is to keep your "price" competitive, allowing for the fact that there is a perceived efficiency bias in favour of the young. A small discount to the market is the right place to be in. Unless you are in France, or unless you are in a profession where you cannot be sacked (as one commenter to this blog is).

I know this is heresy and I am going to probably be pilloried. But I would rather hold a lower paying job than no job at all.

Thankfully, I am no Nadella. So I can afford to be politically incorrect !!

10 comments:

  1. Nadella is not in trouble because of political correctness. He was in the wrong, and so are you.

    I will price myself out and outsource the task to the New Yorker, to respond to Nadella (and to you) :
    http://t.co/JEXs1YoIGs

    ReplyDelete
  2. @Sriram - Ah well; we inhabit completely different planets. Totally and vigorously disagree with the New Yorker article.

    ReplyDelete
  3. I think i am with your thoughts on executives pay. When number of high paid executives multiply to the crowd of competition there will be forcefull paydown or recession. Its better to stay at reasonable pay. But paycut not suitable for labours in our land since they are already underpaid.

    ReplyDelete
  4. Welcome back my dear friend!

    I think Nadella did nothing wrong. He simply said - don't add to the clamour for wages, ask for fairness. And in today's atmosphere the fairness will come to you whether you ask for it or not.

    But this is not acceptable in today's Twitter-driven world (see the latest article in Schumpeter's column in the Economist).

    ReplyDelete
  5. @Venkat - Labour is of two kinds Venkat - organised and unorganised. Its the vast unorganised sector that suffers. They deserve a far better deal. The organised labout suffers from the same problem as managers and executives. They keep on increasing the salaries until they become uncompetitive and the factory shuts. Remember how Datta Samant killed the manufacturing sector in Maharashtra

    @Ravi - Amen

    ReplyDelete
  6. @Ramesh - Its been a while since a 'Sunday post' :) The life of a sleep deprived mother of a high velocity toddler who never sleeps, depends on it!

    ReplyDelete
  7. I kind of agree with Nadella's comment, that you need to trust the system to be fair. The system needs to be honest and fair for everyone irrespective of the gender, orientation, race or any other demographic.

    Coming back to the larger part which you addressed in the post, the fact remains goods and services for most part are becoming cheaper and more affordable. The salaries on the other hand are getting higher, irrespective there is going to be a point where the organization becomes nonviable and shuts shop. The only other model I see working is what companies like Apple are doing today, launch a new model, new variation with raised prices to ensure the price factor of the product also rises.

    ReplyDelete
  8. I kind of agree with Nadella's comment, that you need to trust the system to be fair. The system needs to be honest and fair for everyone irrespective of the gender, orientation, race or any other demographic.

    Coming back to the larger part which you addressed in the post, the fact remains goods and services for most part are becoming cheaper and more affordable. The salaries on the other hand are getting higher, irrespective there is going to be a point where the organization becomes nonviable and shuts shop. The only other model I see working is what companies like Apple are doing today, launch a new model, new variation with raised prices to ensure the price factor of the product also rises.

    ReplyDelete
  9. @Deepa - Well, considering tha my posts have become so infrequent these days, I can hardly "take a break". However sending you separately on email something I worte that will hopefully make you smile :)

    @Prats - Yes - agree with you. If we don;t find a way to be "competitive" and that means lower cost, we will be kicked out.

    ReplyDelete
  10. Challenge accepted! I was underpaid and I know other female employees who got underpaid compared to their male colleagues who are putting the same number of hours and doing the same amount of work and sometimes more. And Indians are already underpaid in most jobs in different parts of the world so NO! I will not agree to a pay drop and degrade myself even more. I think we should rather ask companies to change their hiring policies and pay well to those who deserve.

    ReplyDelete

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