I encourage you to head over to the Evil HR Lady for an interesting discussion on salaries, offers, and how companies value talent.
Evil HR Lady wrote, Your salary/benefits package is how much your company values you.
I responded by writing,
That’s true in the sense that most companies see compensation as a ‘fixed expense’ that drains from the bottom line profit, but they haven’t found a way to both eliminate employees and get the work done. Not yet, anyway. So it’s a clear message that colleagues are not worth much. There’s also the challenge of having a consumption-based economy that can afford to buy the product you’re selling. Corporations are in a bind. They need people to earn money to participate in consumerism, but they don’t want to pay people to work.
What’s not true (imho) is that companies will pay you what you’re worth. Several large Fortune 50 companies have open compensation plans with the express policy of hiring in 25th percentile (total compensation), often regardless of what the best candidate was previously earning. These companies feel that a low-ball offer is competitive due to the company’s reputation and brand. Often times, they are right.
I think it’s fair to say that most companies try to implement a black & white compensation process; however, most companies operate with tremendous shades of gray. I once had an employee say, “I would respect my manager more if he would own up to the company’s flaws. At least I know he’s a straight shooter.”