Typical Management Think

Posted by Admin

My husband works for a large privately held company in New York, and this is how upper management thinks. At the beginning of each year, employees are granted "certs," which are like stock options. I have no idea how they're computed, but the value fluctuates. 100 certs might be valued at $30,000 when assigned and then come in higher or lower depending on profits.

Supposedly this will motivate people to work harder and increase productivity since the more the company makes, the greater the value of your certs. Yesterday, my husband had his review, which was a very positive review. Yet he was told his salary would remain flat next year because his "certs came in way above" the amount quoted at the beginning of the year. (On years when certs come in lower, you don't get a commensurate increase in your salary--they just say "them's the breaks!") Due to inflation, this is like getting a pay cut.

This is not atypical of NYC financial industries. Someone I know who works for Morgan Stanley said that while they continued to get bonuses (less than in previous years), the salaries in the IT department were frozen for 2002 and 2003.

If you work hard and it contributes to booming profits, leading your certs to come in above expectations, the company decides no pay increase is required. So what exactly is your motivation to work your ass off? Next year, relax a little more, spend more time with the family, let your certs come in as estimated and get the raise you deserve, because in the long run the raise is more valuable since the difference between your existing salary and the future salary recurs every year of your employment. In other words, if you get a $10,000 raise, that's $50,000 over the next five years, but if you get $10,000 extra in your certs, you only get that for the one year. You could invest the $10,000, but unless you're Hillary Clinton or Neil Bush, it's unlikely to give you a 500% return in five years.