Of course, to make a cashless promotion more palatable, it helps to understand the reason behind it. A common reason is “we can’t afford to pay you more right now.” Ana Maria Fernandez Haar used that approach when she wanted to motivate her key people at her former Hispanic advertising agency as it expanded.
“Sometimes, I didn’t have enough resources to compensate for the job I was about to ask them to undertake. I would give them the title with an understanding that as soon as possible, monetary recognition would come about — and it did,” she said.
Another reason employers give is they are doling out a stretch assignment, a chance to prove you are worthy of the bigger job and higher salary. “I know a lot of women who have taken the risk to prove that they could do it,” says Margaret Nee, vice president of development at Pointe Group Advisors and president of CREW-Miami, a real estate industry organization. “If they hadn’t, they might never have gotten that experience.”
HR consultant Mark Hatcher advises employees to be sure they understand their industry, the salary structure and the political environment within the company. Doing your research will help you to know whether you deserve more for the expanded role and whether there are other opportunities outside your company, he said. However, you will want to consider who else would take the promotion you might turn down, he says. “At larger firms it can be political and more about who is trying to get ahead and be noticed.”
Hatcher, CEO at EnginuityHR, a Dallas human resources outsourcing firm, has seen both outcomes. “It has either worked out extremely well or become a complete nightmare when what was promised didn’t come through.” For employers, it’s a risk, too. “If you’re going to promote, you don’t want to de-motivate or have them jump to a competitor.”
While it’s not illegal to promote employees without offering raises, there are several key issues for employers to consider. They should first review recent promotions made in their company of similarly situated employees and pay attention to the demographics to avoid the appearance of discrimination. And, employers need to be aware that promoting an hourly employee into a “management” position and converting pay structure from hourly to salary does not necessarily relieve the company of its obligations under the Fair Labor Standards Act.
“We tell our clients that promotions should matter and without an increase in pay you could create future problems,” says Paul Ranis, a labor and employment attorney with Greenberg Traurig in Fort Lauderdale.
As an employee, if you honestly do not want to take on a bigger role or feel you are being taken advantage of, it is OK to turn down the promotion, career coaches say. Often, people who take a promotion discover that they hate the longer work hours, added travel or commute or the way new demands affect their personal lives — and they resent the sacrifice without compensation.
Hernandez, the medical marketing representative, says she told her boss she already was in a role where she felt she was flourishing. I said, “I’m ambitious, but that’s just not the right role for me at this time.”