The post was originally published in Polish on Szymon’s LinkedIn profile. Szymon kindly agreed to republish what we think is of great value to our readers.
The CEO preferred to fire a loyal employee rather than give them a few hundred zlotys raise. In their place, an inexperienced person was hired for a considerably larger salary. Why? The CEO was afraid that if they gave someone a raise, others would follow and come for it too..
Szymon Janiak, Co-Founder and Managing Partner at Czysta3.VC
The smart specialist had been working in the company for quite some time. They never complained about anything, they never caused any trouble – on the contrary, they were loyal and fulfilled all their duties. Both sides were satisfied. As time went by, inflation gnawed at their salary more and more, as the salary remained unchanged. It became easy to notice. The company was growing and hiring more employees. Everything changed when, at one of the lunches, brief conversations about salaries began, from which it became clear that new people in the same positions earned more than their senior colleagues.
In such a situation, the solution seemed quite natural to arrange a meeting with the CEO and talk about a small raise. Equal payment with others would be ok, but a small seniority bonus for experience would also be appreciated. However, the conversation was very short: there is no money for raises, the company must keep growing and hiring new people, not generate costs. Neither efficiency nor experience mattered. When the issue was put on a knife’s edge – either a raise or termination – the CEO thoughtlessly chose to terminate. Then they had to look for someone new, for a salary greater than that of the former employee with the requested raise. Interestingly, the CEO was convinced that they had done the right thing. If the raise had been granted, others would have come for it too… Why promote such bad habits in the company?
The worst thing about it is that this story is not an isolated one. New employees are hired for higher salaries because times are changing and no one wants to work for less. The current ones are kept until they rebel, because pay raises are a bad thing by definition. In the end, however, this is complete nonsense. Instead of promoting experience and loyalty, more money gets spent on recruiting, onboarding, and eventually hiring a new person. All this to avoid appreciating someone and sticking to the seemingly normal practice of regular raises.
No thought is given to the fact that onboarding a new person often presents a much higher cost and lower efficiency for some time. Short-term savings become long-term loss. The sooner you notice such an attitude in your environment, the more you should consider changing your workplace.
One thing is certain: Good employees must be appreciated. Sounds trivial? Great, then why so many companies are still feeling it? Now is the excellent time for a systematic change.
The comment section had to add:
I see this problem as a deeper one: it is in the culture of buying something new instead of fixing something old. The fact is that today the loudest talk is about how to recruit the best employee, not how to keep them. That’s one point.
Secondly, there is a trend that people who left the company because of bad money can still come back to the company if the work culture was okay, but with a bad culture inside the organization, people will not come back for any money.
– Radoslaw Komuda, Founder at Digital Ethics Laboratory
Those least deserving a raise are usually the first to line up for it. That’s why I gave a raise every year for everyone according to generally established rules – at the level of inflation, the amount of which was communicated to everyone. In addition, there was a raise related to promotions and the same salary for everyone in the same position. This is a very subtle message, enough not to come for raises. If employees came, they only asked what they had to do to get a higher position, and then it was a completely different quality of a conversation.
– Bartosz Ziółko, Advisor to CEO at Deep Hearing AI
There is an interesting psychological phenomenon that bosses look at employees from the perspective of their position when they joined. A loyal employee who has been promoted from the position of a medicine intern to a senior years before, is still a 20-year-old graduate in the eyes of bosses.
– Mark Friedman, Partner and Chief Growth Officer at Samurai Labs
This is why people try not to stay in one place for too long. There is a persistent opinion that no one will give you a bigger raise than your new employer. Unfortunately, that’s how things are more often than not. I keep hearing stories where people return to their previous company but on new terms, because they are treated as ‘new hires.’
– Paulina Pintera, Design Authority & Business Analyst, HR Project Management at Standard Chartered Bank
The CEO should be fired. Not because they acted stupidly – stupidity can probably happen in all positions – but because they didn’t ask HR and accountants for analysis. The CEO doesn’t have to know everything. In fact, they can’t, their job is ‘chairmanship’ and that’s what he has to know. On the national team, on the decision.
But when they go down to the level that formally should belong to one of the mentioned departments, it means that they shouldn’t be a CEO. If they had known how to do it, there would have been no dismissal, because the whole ‘story’ would have been presented to them in the form of all the relevant elements analyzed.
– Grzegorz Krzeminski, Chair of the Board at Centrum Bezpieczeństwa
Every stick has two ends. Yes, it is possible that there are experienced people who bring value to the company. However, the opposite situation is common.
In many organizations, ‘incumbents’ go into ‘concrete’ mode – no learning, zero innovation, maintaining the status quo, and slaughtering any ideas and developments, which is a total drama in the technology industry.
It is also often the case that this ‘concrete’ and ‘experienced’ creator earns quite well, while confrontation with new ideas raises the fear that they will be identified as brakes.
It’s like two sides of a coin.
– Szymon Kufel, Network Automation Architect and Product Owner at Bosch Digital
On my professional path, I have met only one supervisor who held this position because they were suitable for it, not because they knew someone. Unfortunately, in most companies, and in large corporations, managerial positions are held by people who should never go above the level of a specialist. What makes things worse, such people are aware of their indolence and exterminate people in lower positions who are more suitable for their position. Manager revolution….. Could it be the end of corporate capitalism?
– Marek Galowitz, Strategic Sourcing Manager at SEG Electronics GmbH
Every employer is a predator. There are no good employers where you can hide from the world. In hiding, we will find only shame and a dream about stability and career.
Personally, I don’t understand why experienced people choose employment contracts. Are they looking for belonging? Stability? Security? Or what about internships? I understand how at the beginning of my career I can learn something. Once you know something, you should switch to a service provider-client relationship as soon as possible and protect yourself from exploitation. The market and competition are open to everyone.
The systemic solution is to teach our children dignity and self-respect. So that they know how to give and how much to demand in return. Which I wish for everyone, because both as an employee and an employer I would like to live in such a world.
– Pawel Olejnik, Scrum Master at Quod Financial
Alas, many CEOs are very short-sighted and employ managerial practices from the times of Henry Ford at the beginning of the 20th century. Unfortunately, just as you can’t be an electrician or a doctor without knowledge, some people think that management and leadership is ‘common sense.’ Even if it’s not an exact science, you need to have knowledge and learn to manage.
– Zbigniew Barwicz, Managing Partner at Freya Capital
Szymon Janiak is an investor and a business-driven Managing Director at czysta3.vc, a Venture Capital fund located in Poland. He has over 10 years of experience in the technology sector. Szymon is also a Member of the Supervisory Board at stockbroker Grupa Trinity S.A.
