Have you ever wanted to work for a startup? Do you know what type of compensation–and how much –to ask for? Who do you ask? What if a Fortune 500 company was hiring you? Would you ask for the same type of compensation? How would you begin the discussion, and with whom?
Compensation is a game, a game with high risk and high rewards, a game that requires theory, strategy, and execution. And compensation is a game that has many players. Like any well-trained athlete, employees need to learn to how play the game.
Each company approaches compensation based on critical factors. These actors include the company’s industry, financial situation, and business goals. The players in the compensation game vary from employees to board members, and each player is involved to varying degrees. Their level of influence is not the same.
To master the compensation game, employees need to study the players and their degrees of influence. Why waste time and energy with people that can’t influence your desired outcomes? By identifying the players, people can understand who’s controlling the ball and who is calling the plays.
Here are three tips for better understanding of what to ask for, how to ask for it, and when to ask for it.
Who discusses your compensation with you? Does that person just relay the information or get involved in the decision-making process?
Who is involved in the process for determining compensation and awards? Human Resources? Board members? Certain executives? Who exercises the most control over the process? What are their main goals when making compensation decisions?
Who exercises considerably influence over the process, even if they aren’t directly involved? Employee groups? Major shareholders? What do these influencers care about?
Think of a startup. Startups don’t have, generally speaking, formalized HR programs, processes, and procedures. The CEO and COO make compensation decisions ad hoc, by person. They want to exercise control and may not involve anyone else in the compensation process.
Indirectly, however, investors have a stake in the game. They invested significant capital and, in return, expect significant returns for their investment. What they want matters.
Compensation discussions in this scenario should occur directly with the CEO and COO. A direct people manager will have little to no influence over compensation; they are not an active player in the game. Similarly, if there is only an HR generalist (rather than a more structured HR organization that reports to the CEO), the role might be more administrative, and have little influence, if any, over compensation outcomes.
By identifying the players, employees can better play the game. They can develop detailed strategies for approaching the key decision makers and maximizing their earnings.
—Stacey Hawley is the founder of Credo, a compensation and talent management firm and author of Rise to the Top: How Women Leverage Their Professional Persona to Earn More.