Manager vs. Direct report salary issues

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Wannaretireearly
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Manager vs. Direct report salary issues

Post by Wannaretireearly »

I switched roles (lateral move) from managing one team to another. I've been at a Sr. Manager level for 5 or 6 years. Overall the change has been good, and I'm well regarded in both the old and new group.

When I took over my new team earlier this year ( with 2 directs, likely more will get shuffled under me soon) I noticed their base salary was higher than mine.
Given i just moved to this new team, I did not want to make a big deal about this with my boss/Director initially.
However, we just had our annual review and my salary was not adjusted to get closer to my employees. In fact, the $ raise I gave my two employees was slightly higher than what I got. So net effect, the gap between my salary and my employees is now larger! (The gap is not huge, but 5k ish).

I get that things are sometimes upside down. This happened when I first became a manager 5 or 6 years ago. I get that the two folks I directly manage are senior IC's. I appreciate that I got *slightly* higher bonus and *slightly* higher stock awards, but this salary issue is bugging me and is something I want to bring up next week.

My draft approach for this discussion:
1. Briefly review the work/impact I've had with my new team. Including tangible improvements/impact I've had with direct and indirect reports/peers/projects etc etc.

2. Mention that as an experienced manager, I expected the gap between my salary and directs to get closer, not wider! Mention that salary being 'upside/down' with my team is a concern.

3. Ask if this topic has come up during VP salary reviews, especially as the VP knows me (I reported directly to him a couple of years ago), and especially as I regularly get reminded by my new boss that Director is a next step for me, etc.

I'm a lil nervous about this discussion, i have a good relationship with my boss and want to keep that. However, I've never been a squeaky wheel re: comp unless it was negotiating a new job at a new company.

I was hoping that new boss would recognize the gap and try to close it during review time. I'm not sure if he did as we've not talked since we all got our new comp numbers. One of the reasons he hired me is as a potential replacement for him or even to replace a director that reports to him (my peer, who is not performing, and I'm helping/driving etc...).

Any advice? Anyone been thru something similar either as the requestor or on the receiving end (esp when managers/leaders are raising this)?

I'm certain I will bring this up next week.
Perhaps I should have brought this up when I first joined the new org earlier this year...but, that's now water under the bridge....
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TechFI
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Re: Manager vs. Direct report salary issues

Post by TechFI »

You need to check your ego, just because you are a manager doesn't mean you will necessarily earn more than you direct reports. Usually yes... but not always.

I'd reframe your arguments to your upper management as why I am worth more, not pay me more than my directs.
SnowBog
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Re: Manager vs. Direct report salary issues

Post by SnowBog »

Can't give advice, but I'll offer a perspective...

I'm am individual contributor, have been told by more than one manager that I make more than them. I've never once understood the concern...

Just because you manage others doesn't "necessarily" mean that you have a higher impact and should earn more.
AlohaJoe
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Re: Manager vs. Direct report salary issues

Post by AlohaJoe »

When I was a manager of teams of up to 50 people, I always had some who were paid more than me. I never saw it as something that needed to be fixed.

If companies don't make Individual Contributor a viable career path they're just ensuring they end up with a lot of people who didn't actually want to be managers, hate doing it, but felt they were forced to go down that path by the salary ladders. No company wants that.
khram
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Re: Manager vs. Direct report salary issues

Post by khram »

Make them happy, hopefully they make you look good, maybe you get promoted.
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market timer
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Re: Manager vs. Direct report salary issues

Post by market timer »

I think you have two options:
1. Get a better offer and be willing to take it.
2. Align with your director on requirements for a promotion.

You can bring up the fact that your reports earn more, but I'd view this as an ego-driven argument and unbecoming of a future executive. Be wary of winning the battle and losing the war.
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LiveSimple
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Re: Manager vs. Direct report salary issues

Post by LiveSimple »

IC gets paid more based on Their intellectual capital and what they contribute to the company or team. Managers can be replaced not the critical IC.

Jus think, you took over this team and planning to become a director for another team or adding a team, those ICs are not replaceable like this.

I have reported to both strong and weak leaders, enjoy working with strong leaders, weak leaders bring up this topic with me, that I make more in the team. When there is an issue, I provide solution and work with the teams and resolve, my manager can only get status, from the worker bees...

May be different in different industry, company. I feel sad that as a manager instead of empowering your employees rather use the internal confidential information for your advantage.
Last edited by LiveSimple on Sat Jul 04, 2020 6:47 am, edited 4 times in total.
tiburblium
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Re: Manager vs. Direct report salary issues

Post by tiburblium »

Perhaps things work differently in your industry, in mine the Leadership career track is usually seperate than the IC career track.

I had ICs as direct reports at my prior company, a few made more than me. In one case, considerably more, but he was more senior than I was. More importantly, his work at the company was high impact and visible to senior leadership.

Reguarding your question, while I don’t know your industry, I can’t fathom asking for more money based soley on what someone else makes, especially in a leadership role. If you have some recent leverage at the company then shape the conversation around that instead.
Last edited by tiburblium on Sat Jul 04, 2020 5:21 am, edited 1 time in total.
Swansea
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Re: Manager vs. Direct report salary issues

Post by Swansea »

Managing only two people should require little time. I would guess most of your efforts would be your individual responsibilities, and you are being compensated for those.
dcabler
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Re: Manager vs. Direct report salary issues

Post by dcabler »

Happens all the time in the tech industry, like semiconductor where I work. In fact, it's often built into the system because we have a "dual ladder": management ladder and technical ladder. Typically, people on the technical ladder don't have direct reports, but in every other way, the benefits and salary ranges have an equivalent to the same job grade on the manager ladder. And since people on the technical ladder usually report to people on the managerial ladder, it often happens that some direct reports have a higher salary than their manager. In that system, it's a feature, not a bug.
mortfree
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Re: Manager vs. Direct report salary issues

Post by mortfree »

Salary is just one part of total compensation.

Do your directs get the stock options?

I have heard this before at the company I work at where a new manager comes in and realizes that their directs have a higher salary.

It was nice of you to give them that raise this year and increase the gap. Was that solely your doing or did other management have a say?

As for your plan to discuss salary focusing on the fact that they make more of a base salary, it’s probably a bad idea.
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TomatoTomahto
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Re: Manager vs. Direct report salary issues

Post by TomatoTomahto »

I don’t know how to say this more kindly, but it makes me wonder how deeply you understand management if you’re upset that direct reports (ICs) make more than you.
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medic
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Re: Manager vs. Direct report salary issues

Post by medic »

Agree with the others. As a manager of a small team myself, my managerial value mostly comes from strategic planning and clearing the overhead for my team. Rest of my comp, and what I actually write in my reviews, is my IC work unless the management piece was a big deal (e.g. hiring/firing someone).

Also, tracks are different. I've brought in a relatively junior designer into our product group a few years ago. She went from ~$80K to $130K just with the move. Nothing else other than a change of teams to bring her comp ratio in par with her corresponding product title. She did basically the same work. When she moved to a new non-product team, I suspect they reset her pay to be in line with her peers. This revert to the mean has pros and cons. Great if you move up, but really painful when you're a high performer and get pulled down to the mean of the rest of your team.

In most reviews, no manager looks at actual comp levels. It's a percentage bump and the whole budget has to balance. Not once in 20+ years have I or any in my management chain asked how much John makes in a personnel review. We talk outstanding, high, medium, low, no impact and the rest if pretty much a formula. If we're out of line with the budget, we'll usually move things globally. As a manager for your team, I suspect you have some insight into how the system works in your firm.

If you really want to push this, get more data. Ask HR for your comp ratio. Most roles have a target and you're some % of that target. This can be based on the company or, if you're a large firm, an external salary survey to ensure you're competitive. The fact that you didn't get an auto adjustment like my designer did means that you may be on par. Potentially, you're actually higher comp than other managers on this team. Right now, you have a small piece of the data about you and your direct reports. Get more before you make a bigger deal out of it, but again as others have said talk about why you have value and expect to be rewarded for it, not about "Bob got a bigger cookie than me".
VoiceOfReason
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Re: Manager vs. Direct report salary issues

Post by VoiceOfReason »

Wow, not sure if this is an industry thing, but common sense says a manager makes more than direct reports. That is true across the vast majority of businesses. So this concern from OP is natural.

In medical sales where compensation is tied to base salary and commission plans, base salary is higher to provide more consistently higher total comp. However top individual contributors on your team will always make more than manager. Oftentimes A LOT more. The Mgr role adds consistency to by raising the floor but lowering the ceiling on your total compensation.

What is the point of becoming Mgr and taking in more stress and responsibility if total compensation isn’t better in some significant way?
dukeblue219
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Re: Manager vs. Direct report salary issues

Post by dukeblue219 »

VoiceOfReason wrote: Sat Jul 04, 2020 6:00 amWow, not sure if this is an industry thing, but common sense says a manager makes more than direct reports.

If it is a field where managers are usually former contributors who have been promoted up, then that makes sense in general. But there's always going to be a few indispensable workers who have outlier salaries and don't want to be managers. I don't see that's it's common sense that my boss has to make more than me just because he signs my time card.
What is the point of becoming Mgr and taking in more stress and responsibility if total compensation isn’t better in some significant way?
Just depends on the situation and the field. Managers aren't always former worker bees who got promoted up some fixed scale. In some fields managers are just one type of labor and have a separate career track. Why should they make more as an inflexible rule than the people actually doing the work?

An average, mid level manager is replaceable. A subject-matter expert in semiconductor fabrication or software design or biochemistry may literally be irreplaceable.
Normchad
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Re: Manager vs. Direct report salary issues

Post by Normchad »

Worry less about what others make and worry only about yourself.

If you think you are underpaid, go out into the market and see what others are willing to pay you.

I’m a manager. Have been for a while. And honestly, managers are a dime a dozen. It’s true that they are necessary, but they are also easy to find and replace.
Last edited by Normchad on Sat Jul 04, 2020 7:56 am, edited 1 time in total.
MarkBarb
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Re: Manager vs. Direct report salary issues

Post by MarkBarb »

VoiceOfReason wrote: Sat Jul 04, 2020 6:00 am Wow, not sure if this is an industry thing, but common sense says a manager makes more than direct reports. That is true across the vast majority of businesses. So this concern from OP is natural.

In medical sales where compensation is tied to base salary and commission plans, base salary is higher to provide more consistently higher total comp. However top individual contributors on your team will always make more than manager. Oftentimes A LOT more. The Mgr role adds consistency to by raising the floor but lowering the ceiling on your total compensation.

What is the point of becoming Mgr and taking in more stress and responsibility if total compensation isn’t better in some significant way?
It was definitely not the case in my IT career. Every company I worked at had two career ladders and the management and tech career ladders paralleled for multiple pay grades. In the latter stages of my career, I moved between mgmt and IC roles several times and when I was in an IC role, there were times when I was at a higher level than my mgr and even times when I was at the same level but made more money.

People get paid based on the market value of their role. There are often more people that can manage a team than there are people that have the high level of expertise required to do a particular IC role. Some people choose the mgmt track because they lack the skills, ability, or interest to advance in the specialized IC roles. Others take the mgmt track because the ladder eventually goes higher than the IC ladder.

Probably the easiest examples to use for illustration are sports and actors. It is not uncommon for many players to be paid more than the coach and many actors to be paid more than the director or the producer. The same principles apply to jobs in other fields. If you need to build a team to do cutting edge data science, network security, seismic analysis or other tasks that require rare and expensive skills, there is a good chance that you'll have to pay more for those skills than you will for someone to manage the team.
RocketShipTech
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Re: Manager vs. Direct report salary issues

Post by RocketShipTech »

Salary ranges are just that, ranges.

Not at all surprising that a higher range overlaps with a lower one.
dukeblue219
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Re: Manager vs. Direct report salary issues

Post by dukeblue219 »

By the way, I see everyone in this thread using IC or individual contributor as common lingo. I've never heard that term before. Is it common in certain fields? A new buzzword? Admittedly I work in government now...
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Re: Manager vs. Direct report salary issues

Post by MathIsMyWayr »

Wannaretireearly wrote: Sat Jul 04, 2020 2:28 am I switched roles (lateral move) from managing one team to another. I've been at a Sr. Manager level for 5 or 6 years. Overall the change has been good, and I'm well regarded in both the old and new group.

When I took over my new team earlier this year ( with 2 directs, likely more will get shuffled under me soon) I noticed their base salary was higher than mine.
You have a serious attitude problem. You only have to figure out who is contributing more and who is more readily replaceable. Some management positions are critical, but many of them are just glorified paper pushing.
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8foot7
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Re: Manager vs. Direct report salary issues

Post by 8foot7 »

This happens not necessarily often but not rarely. My wife managed someone who lived in a HCOL area and the report made significantly more than my wife for less effort. While not entirely analogous, her colleague worked in a HCOL before moving to a cheaper place and despite being a seniority level below my wife, her HCOL pay was never rreset so she made significantly more. All of that is to say these types of disparities can happen.

These parallel tracks IC vs management seem common in tech and engineering.

I don’t think a 5k gap is worth worrying over especially if you have regular conversations about your career track and feel you are in a good path. These things will generally take care of themselves if you let them.

If you told me there was a 50k gap before and it just got wider with this last round and your output was greater in value and quantity than your direct then maybe you’d have an issue.
Last edited by 8foot7 on Sat Jul 04, 2020 8:29 am, edited 3 times in total.
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TomatoTomahto
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Re: Manager vs. Direct report salary issues

Post by TomatoTomahto »

dukeblue219 wrote: Sat Jul 04, 2020 8:10 am By the way, I see everyone in this thread using IC or individual contributor as common lingo. I've never heard that term before. Is it common in certain fields? A new buzzword? Admittedly I work in government now...
I think it was in use, as a concept if not a term, way back even in my day. I was a software developer/architect in the 20th century, and often made more than my boss. I was on a tech track. Eventually I moved to a company that didn’t get it, and they moved me to a management track, which was fun for a while, but not as rewarding as being a Stay At Home Dad, so I became an individual contributor at home :D
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KlangFool
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Re: Manager vs. Direct report salary issues

Post by KlangFool »

VoiceOfReason wrote: Sat Jul 04, 2020 6:00 am
Wow, not sure if this is an industry thing, but common sense says a manager makes more than direct reports. That is true across the vast majority of businesses. So this concern from OP is natural.
VoiceOfReason,

1) This observation does not apply in the high tech industry.

2) It is not true in sales-related roles too. A salesperson could make a lot more than the sales managers/directors,

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musicmom
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Re: Manager vs. Direct report salary issues

Post by musicmom »

I worked in healthcare my entire 40 yr career, retiring last year.
I moved between IC and coordinator/supervisor several times early on but settled happily into IC roles for second half till retirement.

I was lead tech resource for my group, was consistently pulled in for IT, instrument and process implementations with other groups including physicians, pharmacists, infection control practitioners, education coordinators.
Enjoyed it all but was always happy to transition back to my IC role between projects.

My compensation exceeded all my direct managers. After many years of great performance reviews, I'm not surprised.
I never felt overt displeasure over this from my several manager/directors and they seemed to enjoy having me around as a resource.

Of course, I got to work many weekends and holidays which were never the best part of my working life. Now, everday is a day off.

Hope you can consider some of these responses and see if they apply to your situation.
Best to you.
KlangFool
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Re: Manager vs. Direct report salary issues

Post by KlangFool »

OP,

You have an ego problem if you are upset about the 5K difference in salary. And, that could be poisonous to your career. You may forego your career future if you bring this up. Fundamentally, you believe that you worth more than the IC that you managed. It looks like it is not necessary true in this company. If you cannot fix your attitude, you may not be promoted.

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Re: Manager vs. Direct report salary issues

Post by Broken Man 1999 »

This type thing certainly exists in sales organizations. I know for sure.

As others have mentioned, ICs (individual contributors) are sometimes experts in niches that make them very difficult to replace.

Managers, OTOH, well, there are seldom shortages in comparison to ICs.

Smart companies keep their ICs very happy. There would be hell to pay if a major customer suddenly was provided a different IC when in the midst of a major project. They wouldn't give two hoots who the IC's manager might be.

I've been both. Honestly, I liked the freedom of being an IC. No one looking over my shoulder. Happy customer = happy employer.

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ColoradoRick
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Re: Manager vs. Direct report salary issues

Post by ColoradoRick »

Counterpoint (and I see I am in the minority) - so many of you are in the IT & tech fields so this might be apples and oranges. I was facility manager in an old world industry of building supplies distribution to retail lumber yards.. Our distribution center morphed from full line (lumber, plywood, roofing, rebar) into moulding and millwork (a higher margin segment). The change was dictated by top management. Since I didn't want to move at the time and was excited about a new opportunity after 24 years of commodities, I attacked my new role with gusto. When we changed the comp for the millwork salesman in line with the industry, it was clear 30-50% of my outside salesman would make 30% more than I did.

My salesmen just had to worry about sales while I had to worry about sales, margins, purchasing, trucking, labor relations, accounts receivable, inventory and safety. When I pointed that out to my new boss, he said that is just the way the industry works. I said I didn't doubt that, but I wasn't going to go back to selling when I loved my job, but refused to "pay" for the privilege. He said there was nothing he could do, and I said fine, I'll stick around to help train my replacement. Two months of multiple communications later and they decided to fix the problem. I was prepared to walk. I was pretty confident I could become a salesman with the competition and not have to go thru the horrors of our transition. Anyway, thought OP might like someone on the other side.

However, note that I took it up to an ultimatum and for one of the few times in my career I was prepared to walk. I would not have walked for $5m though. The difference was $30m in the 90s so without consulting an inflation site it would be like $60m now, or about 30% of my total comp. Think carefully and also check with one or two close, successful and intelligent friends and bounce off of them.
milktoast
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Re: Manager vs. Direct report salary issues

Post by milktoast »

I’m in software. As an IC there have been times when my comp was twice what my manager made.

The ones who cared struggled. The ones who were excited to have a high impact IC on their team did well.

Stop thinking about your relative comp. Start thinking about what your high impact IC can help your team accomplish.

Can they help you recruit high potential IC? Do they have ideas for transformative projects that you could lead into the next big business success? Do they have relationship and exposure to executive team, can you use this to get visibility and growth for your team? Can you pair up your best IC with your smartest college recruit to show your ability to grow an employee? Etc.

Don’t equate IC with lower level. Especially if they have been at the company much longer than average, they may be essentially irreplaceable at their primary role and a viable backup/mentor for a dozen other roles.
rich126
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Re: Manager vs. Direct report salary issues

Post by rich126 »

TechFI wrote: Sat Jul 04, 2020 2:40 am You need to check your ego, just because you are a manager doesn't mean you will necessarily earn more than you direct reports. Usually yes... but not always.

I'd reframe your arguments to your upper management as why I am worth more, not pay me more than my directs.
I agree. I have made more than my managers. I have also been older than my managers at times.
harrychan
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Re: Manager vs. Direct report salary issues

Post by harrychan »

You are right to tread carefully especially if you are eyeing to be a director in the near future. I would ask hr for salary scale for your group. You will likely find that your positions range and the IC range intersect. I would focus on where you are on the range than in comparison with your DR.
This is not legal or certified financial advice but you know that already.
Annabel Lee
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Re: Manager vs. Direct report salary issues

Post by Annabel Lee »

Sharing a counterpoint here from experience, as the OP sounds savvy - and as it also doesn’t sound like they are in a “managing rockstar technical ICs” situation where compensation differences are to be expected.

This happened to me in my 20s. I went from managing a dotted-line group of onshore/offshore resources to 10 direct reports, some of which were in their 50s. All non-technical, all with significantly less workload and responsibility than me.

I trusted my organization and my boss helped me correct the situation over time, effectively via the bonus/incentive compensation path. This required me to reset bonus expectations to an extent for my team, from their unrealistic previous management - in effect becoming part of my own solution - but was sorted out over time.

I have to chuckle a bit now as this experience paved the way for compensation growth that was, ah, a bit more than what I was previously upset over... and hopefully this will be your result as well.
Last edited by Annabel Lee on Sat Jul 04, 2020 10:01 am, edited 1 time in total.
HomeStretch
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Re: Manager vs. Direct report salary issues

Post by HomeStretch »

The salary gap is $5k-ish but your incentive comp is slightly higher. For a total comp gap of < $5k, consider letting go of your feelings of unfairness. Those feeling will likely undermine your professional work.

If you do decide to bring this up with your boss, your case should be made based on the market rate for your contributions and not what others in IC roles are making.

Focus on accomplishments in your present role and your next promotion which should come with a compensation increase.
Last edited by HomeStretch on Sat Jul 04, 2020 9:57 am, edited 2 times in total.
stoptothink
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Re: Manager vs. Direct report salary issues

Post by stoptothink »

I've been in both situations. Once where I was promoted to director and now overseeing 14 employees (my former co-workers), 2 of which I found out were making more than me. It was not because they were important or exceptional (they were actually the least productive), but hired by a friend (the former, fired, director). I was not able to get a commensurate raise and ultimately (within a matter of a few months) I just got other offers and moved on. Found out later that the next director just fired the two overpaid and unproductive employees. In my current position, originally I was paid more than the individual who was directly above me on the org chart. I was the PhD scientist producing primary research and was far more visible within the company than she was. It was awkward having year-end reviews, because she wasn't really "my boss", I was kind of a separate entity that they needed to put under someone. She would often make jokes that I should be reviewing her, considering I made more money. We're now on equal footing, title-wise, and great friends.

So, my n=1: it depends. Yes, in some cases ICs do earn more than those who "manage" them, and it makes total sense. Analyze if this is the case in your situation.
RudyS
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Re: Manager vs. Direct report salary issues

Post by RudyS »

dcabler wrote: Sat Jul 04, 2020 5:30 am Happens all the time in the tech industry, like semiconductor where I work. In fact, it's often built into the system because we have a "dual ladder": management ladder and technical ladder. Typically, people on the technical ladder don't have direct reports, but in every other way, the benefits and salary ranges have an equivalent to the same job grade on the manager ladder. And since people on the technical ladder usually report to people on the managerial ladder, it often happens that some direct reports have a higher salary than their manager. In that system, it's a feature, not a bug.
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Wannaretireearly
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Re: Manager vs. Direct report salary issues

Post by Wannaretireearly »

Thanks for the replies, I truly appreciate them all.
One of the most constructive was from markettimer:
I think you have two options:
1. Get a better offer and be willing to take it.
2. Align with your director on requirements for a promotion.

The second option is really where I should focus my efforts with my boss.
I love all the 'ego problem' comments ;) I actually went from managing more people to less cos of the interest I have in this particular group! Like I said, all has been good so far with my move & I've been doing plenty of IC work as well as providing direct and indirect help to the entire team. This includes plenty of team management, soft skills/personnel dynamics issues, guidance to leadership etc.

I've been thinking about this a bit more, and the way I want to approach this is along the lines of #2 above. Agreed the $ differences are small.
I've never been a squeaky wheel internally over many years, so sometimes feel like if I don't bring this up in an appropriate way, I may lose out by not speaking up.
It's a funny old world being a manager/leader ;), I actually enjoy the managerial/leadership work!
I guess my ego does have to reset a bit esp where I am managing IC's at the top of the ladder, some with higher pay grades than me (happened when I first started managing years ago...). It seems like that may happen more often in my new group as we have the most experienced/senior IC's.

Again, keep the responses coming, love to hear more personal experiences, it can only help...

This is the sort of comp discussion that is very difficult to have, or even know how to navigate, so I appreciate this thread...

Edit: I just saw more great responses while I was typing from Colorado Rick, milktoast, Annabel Lee, harrychan & others!!
Last edited by Wannaretireearly on Sat Jul 04, 2020 10:06 am, edited 1 time in total.
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Re: Manager vs. Direct report salary issues

Post by 9-5 Suited »

It might be useful to imagine that General Managers of MLB teams sign deals almost exclusively with people who make more than them, and sometimes more than them by about 10x. It’s not really useful to judge success that way, especially in small amounts. Individual contributors with in-demand skills especially in areas like data science, analytics, and enginerring can easily make more than their managers. In retail settings, pharmacists make more than their store manager. It’s not uncommon in the world.
HawkeyePierce
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Re: Manager vs. Direct report salary issues

Post by HawkeyePierce »

Another voice from tech: line managers almost always make less than their senior reports. We have dual tracks for management and ICs: a team manager is on the same level as a senior engineer. A senior engineer is someone 5-10 years into their career. The team manager and senior engineer are the same comp scale.

If the team has any staff engineers or higher, those reports will almost certainly be making 20-30% more than their boss in total comp.
bling
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Re: Manager vs. Direct report salary issues

Post by bling »

simple thought exercise. if you suddenly disappeared for a month, what's the impact to the business? what if your top-performing IC disappeared instead?

everyone is replaceable. how much you get compensated is based on how painful it is to the business when you're gone.
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Wannaretireearly
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Re: Manager vs. Direct report salary issues

Post by Wannaretireearly »

mortfree wrote: Sat Jul 04, 2020 5:32 am Salary is just one part of total compensation.

Do your directs get the stock options?
OP: yep they do...

I have heard this before at the company I work at where a new manager comes in and realizes that their directs have a higher salary.

It was nice of you to give them that raise this year and increase the gap. Was that solely your doing or did other management have a say?
OP: Yep, I had first say and then Director/HR also weighed in

As for your plan to discuss salary focusing on the fact that they make more of a base salary, it’s probably a bad idea.
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Wannaretireearly
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Re: Manager vs. Direct report salary issues

Post by Wannaretireearly »

Good advice, thanks. Yes, I know my salary range - I'm around the mid point...comp ratio
medic wrote: Sat Jul 04, 2020 5:53 am Agree with the others. As a manager of a small team myself, my managerial value mostly comes from strategic planning and clearing the overhead for my team. Rest of my comp, and what I actually write in my reviews, is my IC work unless the management piece was a big deal (e.g. hiring/firing someone).

Also, tracks are different. I've brought in a relatively junior designer into our product group a few years ago. She went from ~$80K to $130K just with the move. Nothing else other than a change of teams to bring her comp ratio in par with her corresponding product title. She did basically the same work. When she moved to a new non-product team, I suspect they reset her pay to be in line with her peers. This revert to the mean has pros and cons. Great if you move up, but really painful when you're a high performer and get pulled down to the mean of the rest of your team.

In most reviews, no manager looks at actual comp levels. It's a percentage bump and the whole budget has to balance. Not once in 20+ years have I or any in my management chain asked how much John makes in a personnel review. We talk outstanding, high, medium, low, no impact and the rest if pretty much a formula. If we're out of line with the budget, we'll usually move things globally. As a manager for your team, I suspect you have some insight into how the system works in your firm.

If you really want to push this, get more data. Ask HR for your comp ratio. Most roles have a target and you're some % of that target. This can be based on the company or, if you're a large firm, an external salary survey to ensure you're competitive. The fact that you didn't get an auto adjustment like my designer did means that you may be on par. Potentially, you're actually higher comp than other managers on this team. Right now, you have a small piece of the data about you and your direct reports. Get more before you make a bigger deal out of it, but again as others have said talk about why you have value and expect to be rewarded for it, not about "Bob got a bigger cookie than me".
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Wannaretireearly
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Re: Manager vs. Direct report salary issues

Post by Wannaretireearly »

VoiceOfReason wrote: Sat Jul 04, 2020 6:00 am Wow, not sure if this is an industry thing, but common sense says a manager makes more than direct reports. That is true across the vast majority of businesses. So this concern from OP is natural.

In medical sales where compensation is tied to base salary and commission plans, base salary is higher to provide more consistently higher total comp. However top individual contributors on your team will always make more than manager. Oftentimes A LOT more. The Mgr role adds consistency to by raising the floor but lowering the ceiling on your total compensation.

What is the point of becoming Mgr and taking in more stress and responsibility if total compensation isn’t better in some significant way?
Ha, thanks! Your last point is valid. I'm also coaching the new manager who took my old role (first time IC to new manager). Its sometimes challenging to explain how taking a stressful manager role is really beneficial ;)

My personal opinion is that leadership/management may be underrated skills in the org (perhaps any org, and i am in Tech/IT).
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Broken Man 1999
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Re: Manager vs. Direct report salary issues

Post by Broken Man 1999 »

bling wrote: Sat Jul 04, 2020 10:14 am simple thought exercise. if you suddenly disappeared for a month, what's the impact to the business? what if your top-performing IC disappeared instead?

everyone is replaceable. how much you get compensated is based on how painful it is to the business when you're gone.
Ha! How true.

Best answer yet!

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
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Wannaretireearly
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Re: Manager vs. Direct report salary issues

Post by Wannaretireearly »

bling wrote: Sat Jul 04, 2020 10:14 am simple thought exercise. if you suddenly disappeared for a month, what's the impact to the business? what if your top-performing IC disappeared instead?

everyone is replaceable. how much you get compensated is based on how painful it is to the business when you're gone.
Good points.
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PaunchyPirate
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Re: Manager vs. Direct report salary issues

Post by PaunchyPirate »

I was in the software tech field prior to retirement. I was an individual contributor who made it very clear in the early years that I did not want to be a manager. My employers were fine with that and still rewarded me with a growing salary as I performed. For quite a few years prior to my retirement, I was told my base salary was higher than my various managers. Our bonuses were typically comparable. At the time of my retirement, I had worked for that employer for 19+ years. My manager was 32 years old and in his 3rd year at that employer.

It happens more than you'd think in the tech fields. I'd suggest the OP not bring it up as an issue. Simply work hard and rely on your own skills to earn your raises and promotions.
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Wannaretireearly
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Re: Manager vs. Direct report salary issues

Post by Wannaretireearly »

I feel like this is question I can pose here:
For the experienced IT/tech leaders, was your salary highest in your org once you were at the director/sr. Director/VP level? Or did gaps still persist then too?

I understand my role is to grow and reward the team etc. However at some point the relative pain/stress of being in sr. management/leadership needs to pay off (even in tech/IT with high IC packages).
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Wannaretireearly
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Re: Manager vs. Direct report salary issues

Post by Wannaretireearly »

PaunchyPirate wrote: Sat Jul 04, 2020 10:42 am I was in the software tech field prior to retirement. I was an individual contributor who made it very clear in the early years that I did not want to be a manager. My employers were fine with that and still rewarded me with a growing salary as I performed. For quite a few years prior to my retirement, I was told my base salary was higher than my various managers. Our bonuses were typically comparable. At the time of my retirement, I had worked for that employer for 19+ years. My manager was 32 years old and in his 3rd year at that employer.

It happens more than you'd think in the tech fields. I'd suggest the OP not bring it up as an issue. Simply work hard and rely on your own skills to earn your raises and promotions.
Thanks. Appreciate your response & congrats on your (hopefully early :wink: ) retirement!
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Barsoom
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Re: Manager vs. Direct report salary issues

Post by Barsoom »

As an IC in my MegaCorp for 40 years before I retired, let me tell you that you didn't suddenly become smarter than you were the day before you became a manager.

You're not in the army, you're performing a role on a team just like everyone else. Sure, you go to strategy meetings where you're told about upcoming plans that the line workers don't know about. Sure, you have to deal with confidential HR issues that can't be discussed with others. But that's the nature of your role. While you're doing that, you're not coding the next system, or manufacturing the next sub-part, or growing the next culture in the R&D lab, because that's someone else's team role.

Good managers know that they are expected to learn how to be managers, that is, take training on leading and motivating people, organizational dynamics, company policy, labor laws, valuing contributions, etc. The worst managers are those who were the "best" IC specialists who were then promoted to lead the others.

The sooner you lose the "manager = better = must be paid more" mindset, the happier you'll be. Over my career, the people who made the worst impacts on organizational contributions were the managers who thought they knew better.

-B
stoptothink
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Re: Manager vs. Direct report salary issues

Post by stoptothink »

Barsoom wrote: Sat Jul 04, 2020 11:04 am
Good managers know that they are expected to learn how to be managers, that is, take training on leading and motivating people, organizational dynamics, company policy, labor laws, valuing contributions, etc. The worst managers are those who were the "best" IC specialists who were then promoted to lead the others.

The sooner you lose the "manager = better = must be paid more" mindset, the happier you'll be. Over my career, the people who made the worst impacts on organizational contributions were the managers who thought they knew better.

-B
Spot on. Admittedly, I have been promoted throughout my career to management positions, pretty much because I am the best IC and not necessarily good at managing. I am very fortunate in my current position, I had no interest in the managing part so I worked with my boss to develop a department org structure where the managers under me do 90% of the "managing". This gives me autonomy to focus on content, I am in essence more senior director of "content" rather than of a department. It's an optics thing for the company: it looks better to have someone with a CV like mine - and who produces primary research and other content - to have that outward facing role (and fancy title) in my specific department and have the younger people (without the same background, yet) do the managing. I still complain about the people managing I have to do, but my managers are handling the brunt of it.
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gasman
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Re: Manager vs. Direct report salary issues

Post by gasman »

Physicians routinely answer to administrators who make FAR less than they do.
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Wannaretireearly
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Re: Manager vs. Direct report salary issues

Post by Wannaretireearly »

gasman wrote: Sat Jul 04, 2020 11:23 am Physicians routinely answer to administrators who make FAR less than they do.
I want to keep this discussion open and cordial, it has been so far! I think the difference between medical and regular corp/tech management/leadership is different.
For example, in medical tye administrators would never comment/review/approve/improve your work as a doc. In the corp world that is expected from managers/leaders. I hope others may chime in too ;)
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