[JohnFen]

> Top performers get completive raises by going to their boss with an offer letter from a competitor.

In my businesses, I've had employees do this a couple of times. Both times my response was "you should take that offer". Also both times, if they'd asked for a pay increase equal to what the offer represented, they probably would have gotten it.

Coming to me with an offer letter in an attempt to get a pay raise is a thing that I think speaks very poorly of the person. It's an attempt to extort me, their current employer, and it's showing great disrespect for the company they got the offer letter from (because the employee is basically just using that employer and wasting their time).

[bb88]

I appreciate your honesty here. I would argue, you should appreciate your employee's honesty as well.

If you have a market based salary view of the world, and an employee says they're actually worth more than what your merit/market system is paying them (and has proof), you should probably respect that.

The fact they're coming to you first is a risk in and of itself.

[JohnFen]

> an employee says they're actually worth more than what your merit/market system is paying them, you should probably respect that as well.

We are in total agreement here!

[bb88]

You said:

> Coming to me with an offer letter in an attempt to get a pay raise is a thing that I think speaks very poorly of the person.

Don't get me wrong, I appreciate your honesty here, But I don't think that's fair, and probably why you're getting push-back in this thread.

[JohnFen]

The part that gives me pause isn't that the employee is agitating for their own interest. That's good and expected. It's the method by which they're doing it.

It's OK if you and others don't think it's fair. We just disagree on that aspect. I don't think it's fair for an employee to use that particular method. To me, it comes off as a kind of extortion to the current employer, and mistreats the employer who made the offer.

Others can, of course, have a different opinion. Nothing wrong with that. We simply disagree.

To make a little meta-comment: I am genuinely surprised at the negative reaction I've gotten from a few people here. I really didn't think I was saying anything all that controversial. Live and learn, I guess!

[bb88]

Probably it was the extortion comment. You could also I guess call it an ultimatum.

But then again companies typically do shitty things to employees all the time because the company has the leverage. You've probably witnessed some of that yourself.

Sam Altman and OpenAI come to mind.

So I guess I don't understand what's changed about the relationship when the employee finds leverage to use against the company.

[synthc]

This is so shortshighted, it's not about 'respect', its about market value. By bringing an offer your employees are proving their market value, and you don't want to match it, so they will leave.

[aleph_minus_one]

> By bringing an offer your employees are proving their market value, and you don't want to match it, so they will leave.

Leaving is exactly what JohnFen actually recommended to these employees.

[JohnFen]

It's about treating people decently, in my view. It's not necessary to try to set up a bidding war in order to demonstrate market value. The disrespect that rankles me is the treatment of the company that made the offer, honestly.

I just choose not to play that game. It's unnecessary. If an employee can't just come to me and be straight about their compensation requirements, that's a problem.

[kcb]

The balance of power is still vastly in favor of the company that made the offer. Meaning, they could rescind the offer at any time for any reason and possibly ruin the potential employees life. Whereas the reverse case of the potential employee rejecting an offer is much less likely to have a material impact on the company. For this reason I don't think the company deserves that much concern.

[s1artibartfast]

>If an employee can't just come to me and be straight about their compensation requirements, that's a problem.

That's exactly what they are doing, but with evidence to boot so you are on the same page.

[JohnFen]

But it's not evidence of anything other than than a company has valued that potential employee at a particular rate. What an employee is worth to an employer is pretty subjective. Someone that is worth 7 figures to one company may only be worth 6 or 5 to another.

Having an offer in hand is valuable to the employee, certainly! There's nothing wrong with getting an offer, then asking your current employer for a raise that would meet or exceed that offer. The issue I have is actually communicating that offer to the current employer.

Now, don't get me wrong -- I'd certainly never punish or fire anyone who did that. I'm just not going to give in to what I perceive as extortion, and what I perceive as being unfair to the employer who made the offer.

[maxerickson]

How often can they ask you for a pay increase (the price discovery you approve of) without making you start thinking some other negative thing?

[JohnFen]

I don't understand this question. What negative thing would I think?

If someone asked me for a pay raise and I turned it down, I'd also explain exact why I turned it down. (This is hypothetical as I've not turned down a pay raise). I wouldn't think poorly of anyone for just asking for a raise, but I suppose I'd start to get annoyed if they did it daily when the reason that I turned them down was still true.

[s1artibartfast]

That's strange to me. Why is it extortion? They're doing you a favor by giving a chance to compete. Seems like honest communication to me.

It is no different than giving customers a notice of price increase or giving contractors an option to bid.

[JohnFen]

It smells of extortion to me because the reason for doing it is to use the offer as a threat.

> Seems like honest communication to me.

Extortion is honest communication, too. The existence of an offer doesn't do anything to help me decide whether or not I can go along with a pay increase. It only communicates that the employee wants to threaten me into agreeing to one.

In my opinion, the better way is to ask for the pay raise without mentioning the offer. If they I don't give them the raise and it's that important to them, then they should just take the offer.

> It is no different than giving customers a notice of price increase or giving contractors an option to bid.

I think it's very different from that, actually. You can require a raise as a condition to stay at the company without trying to use another offer as a weapon.

[s1artibartfast]

I guess to me, extortion or threat imply taking or degrading something you are entitled to. It doesn't seem like you think you are entitled to the work of the employee, so I'm honestly confused by the reaction.

At first I thought it was simply because it is presented as an ultimatum, but it seems like you have no problem being given conditions. Saying I want X to keep working here is acceptable, but the same exact statement with an offer weaponizes it.

If they have an offer they don't tell you about but have an otherwise identical request, is that less of a threat?

[lupire]

You admit to intentionallu underpaying your employees, and then insinuate moral failing on their part for proving their worth to after you told them your underestimate of it? Good for them that they left, and left you poorer for it.

[JohnFen]

> You admit to intentionallu underpaying your employees

Not at all. I've never intentionally underpaid anyone.

> then insinuate moral failing on their part for proving their worth

Also not at all. Presenting an offer letter from someone is not "proving their worth". My objection is the manipulation they're engaging in rather than just asking for what they think they should be getting.

> and left you poorer for it.

Only one of them left, and I was not left poorer for it at all.

I'm not sure why you seem so hostile here. I never dealt with anyone in bad faith, even a little.

[anthony_d]

I think I see your point but it definitely feels shady to me.

First, personally I’ve never asked my employer to match an offer. I just leave.

I do think the thought process makes some sense though.

If I feel I’m underpaid I’m going to look around to confirm before talking to anyone.

If I get confirmation I’m being underpaid then I’m going to wonder why. Here’s where I have a choice… I either assume it’s because you’re intentionally underpaying because you think you can, or it’s because you don’t understand what you’re doing.

I know companies understand compensation because I’ve worked in management and on compensation planning software, that’s why I don’t talk about it.

More naive people might give you the benefit of the doubt, i.e. think you just don’t know what’s fair. Those people give you a chance to fix it, and only then learn that you’re intentionally underpaying them.

It does speak badly of the person but only in the sense that they’re naive and think you “mean well” in some sense.

[JohnFen]

> I either assume it’s because you’re intentionally underpaying because you think you can, or it’s because you don’t understand what you’re doing.

There are other explanations as well: for instance, just because an employee is worth a given rate to one company in no way means that the same employee is worth the same amount in another company.