Why offering more to a candidate after they’ve already accepted the position is a bad idea.
During the first, or at the very least the second, interview of the recruitment process, compensation will have been one of the topics discussed. Candidates set their expectations on they expect from a total compensation package and employers do what they can to meet those expectations, within reason. When candidates ultimately accept the position, they are agreeing to the overall compensation package.
In my experience, more than once, a future employee has returned a few days later and attempted to negotiate their salary. Family values, socio-economic status, etc. are often the background for this additional layer of negotiation. However, it is important to stick to your original offer for a number of reasons:
1. The employee has not proven he/she is worth more than originally offered
Companies set a base salary based on the demands of the position, not on the expectations of the worker. Exaggerated example: If someone who holds an MD degree takes a job at a McDonald’s, is he/she entitled to a $150,000 annual salary? Not likely. If the salary the employee is bargaining for is truly a reflection of their performance and abilities, that will be obvious within the first few months of employment. A generous response would be to offer them the chance to prove this, and make a note to bring up the subject at their first quarterly performance review.
2. It sets expectations that the employee does not have to prove him/herself in order to receive incentives
We would all gladly take more money if it was offered, but at what expense? Surely by receiving a salary increase I’ve done something to deserve it, correct? Meeting a brand new employee’s demands without question sets the tone that their net worth is not performance-based. With this mindset, employees begin to expect annual increases without having to justify why they may deserve one. Motivation is likely to suffer here.
3. Once this information reaches the rest of the workforce, people begin to ask questions as to why they were not given this option
Inevitably, employees talk. Most people know, or have a good idea, of what their co-workers are making. Employees doing the same job see themselves as equal, and they are. So, when an existing employee catches wind that a new employee is making as much or more than they are, immediately they’ll take this up with the nearest ear. Now you have a nasty rumor spreading around that the company doesn’t play fair, uses favoritism, etc. and it all could’ve been avoided by sticking to your pay-grid and remaining consistent.
In the end, a consistent framework for managing new-employee expectations around salary can save companies a tremendous amount of effort and risk in the long run. If you aren’t sure what your current onboarding processes are, now is an ideal time to take a closer look and build a better foundation. Your employees – new hires as well as veterans – will likely thank you for it.