I'm coming to the conclusion that I have a direct report who is seriously overpaid. What do I do? Have a chat? Fire them?

Details: I make $200k to oversee a large data analytics team. My two team leads manage a few, do full time IC work, and make $155k. The person in question does good work and makes $193k. I just laid off 10% of my team so money is tight. I inherited this team and have created more standardized salaries, but this one would require termination or a serious pay cut.

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If they do good work, why do you think they are overpaid? Are you comparing relative to your salary? Maybe you’re underpaid.

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Maybe the critical feedback is a hint that you can manage them a bit differently to help them improve. If there is something they could and should do differently, it’s your responsibility to help them grow and improve. Otherwise why are you the manager? You would be an individual contributor.

Employees who are over the salary band are those who usually moved around the company. You can’t fault them for that. You also need to consider their total yoe, market rate when they came in, and what they negotiated during hiring. I also have IC developers who make more than their managers/directors because of the market rate they came in. Firing someone because they’re overpaid will not only be discriminatory but illegal, even at at-will states. You’ll only sound petty. I doubt your HR will condone. Unless this person has performance issues, be happy for them at how they arrived at their career. Don’t punish them because of your ego.

Some other leaders may think you are overpaid. Would you take a pay cut? Would you like it if they fired you?

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I think I should be fired if I don't perform in a way that justifies my salary. I appreciate the legal advice though and will take that into consideration.

I understand where you're coming from but I feel like a direct termination would be a bit cruel, especially in this market and if they're actually a good employee. Maybe the salary could be decreased, if needed, and then they can make the decision to leave or not.

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Since there are active layoffs going on in this current economy, they're probably aware that money is a bit tight all across the board. They may get offended by the salary drop but are probably also aware that budgetary decisions need to be made by the company at this time (you could use this angle). I'd personally rather take a pay cut over being unexpectedly unemployed, especially during a time like right now. I feel like them having the option to stay or leave gives them a sense of agency and translates to less blood on your hands as well.

Also, I appreciate you asking this and approaching this matter in a more "human" approach. I understand that difficult decisions like these have to be made but sometimes it's easy to forget that there's an actual human being on the receiving end of these decisions.

helpfullike

Can you actually cut the person’s salary? If you do they will certainly leave.

likesmart

Fair point. I would probably run it by my boss but I do have the authority to do that and they would probably leave thus solving my problem.

likesmart

Train the inherited employee to be what you need.

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I did give him the opportunity to lead a decent sized full stack team. (Admittedly, I probably could be a better manager and guidance still could have been better. I've got room to grow.) I've gotten quite a bit of constructive feedback and the team is being decommissioned. In part I gave this opportunity as a chance to justify that kind of salary and it went okay. He's been here almost 2 years and I'm not confident I've seen the steep upward trajectory to justify this level of pay.

I agree with the majority. It seems that you are just trying to cut a person who has a higher salary that is close to yours. VP1 is right, you could have remedied this when you did layoffs. Now it just seems like you see the $190K they make and want to push them out.

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If performance is truly the issue then I would recommend you start properly documenting the expectations (hopefully these are already laid out), and ensure the person in question is aware of this. Then document any deficiencies. If this is truly a performance issue.

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😮‍💨

funny

I would make the discretionary bonus and any other variable pay/merit 0 until the time being. They don’t need to know they’re the only one this is being done too but considering the environment they’d understand.

smart

Why did you not lay off this person if they are costing a lot and not giving appropriate ROI? Seems like you had your chance to remedy it, it seems odd to try to terminate or cut their salary at this juncture.

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Yeah, I think I made a mistake here. I had a few no brainer cuts and, since this was my first time laying people off, I didn't have the stomach to do more.

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