Rewarded with new title, same pay

RAISING THE BAR: Cornerstone Group employees, from left: administrative assistant Lisa Carlson, Vice President of Human Resources Consulting Karyn Rhodes, client-services adviser Stephanie Hamel and benefits specialist Holly Grossman. Rhodes sees a decline in traditional promotions. / PBN PHOTO/RUPERT WHITELEY
RAISING THE BAR: Cornerstone Group employees, from left: administrative assistant Lisa Carlson, Vice President of Human Resources Consulting Karyn Rhodes, client-services adviser Stephanie Hamel and benefits specialist Holly Grossman. Rhodes sees a decline in traditional promotions. / PBN PHOTO/RUPERT WHITELEY

For the first time in a long time, the words “promotion” and “raise” are no longer inseparable.
Pushed by the recession and emboldened by the swollen ranks of the unemployed, a growing number of employers have either considered or already embrace the practice of offering promotions without additional compensation, human resources professionals say.
The practice is far from popular or pervasive, but even as the economy improves, it shows little sign of going away.
“I don’t see people giving traditional promotions like they used to,” said Karyn Rhodes, vice president of human resources consulting at the Cornerstone Group in Warwick. “In this recession, companies are giving out new titles but with no additional compensation, even when there are additional responsibilities.”
In a recent survey of 508 human resources managers and 433 employees conducted by the staffing service Office Team, 22 percent said promotions without raises are either “very” or “at least somewhat common” at their companies. At the same time, 63 percent said the practice was not common while 14 percent said their company never does it.
While that number indicates the practice is still firmly in the minority, it surprised Office Team members who had never surveyed the topic before.
“It was pretty eye-opening,” said Sarah Pontarelli, Providence Branch manager for Robert Half International, the parent company of Office Team. “I was a little surprised that 22 percent said it was somewhat common.”
On the employee side of the equation, 55 percent of workers surveyed said they would be willing to accept a promotion that did not come with a pay raise, a number that may convince more employers that they can get away with it.
“We’re sensing that now workers might be more willing to take a promotion without a raise because of job security and the hope that it will advance their career,” Pontarelli said. Within the work force, Pontarelli said the promotion sans raise was probably most common in industries such as finance and sales, where bonuses or other benefits are a significant part of the compensation package. In other cases, she said employees have negotiated time off, flexible schedules or chances to work at home in lieu of a salary bump.
“The gist I am getting is that it is not a well-received practice, but it is a growing trend,” said Lisa Catoni-Kilduff, president of the Society for Human Resources Management’s Rhode Island chapter after a brief online survey of members on the subject.
“In truly poor economic times, I see a place for it, but I don’t think it’s a good practice,” Catoni-Kilduff said. “I think human resources personnel in general would frown on this going forward, because it reduces the incentive to go for a promotion.”
One organization member who works at a global manufacturer in Rhode Island and responded to Kilduff’s inquiry but declined to be identified said their employer had given raise-less promotions in 2009 and 2010, but had since given some retroactive raises going back to last year.
Even though the retroactive raises didn’t make up for all the promotions, they provided a significant “morale boost,” said the human resources manager, who described raise freezes as an increasing but worrisome trend.
“Everyone is doing more with less, and when an employee steps up and takes on increased responsibility, accountability, stress, travel and everything else that comes with a promotion, they deserve to be compensated fairly for that effort,” the manager told Catoni-Kilduff in a written response.
Not all human resources professionals see raise-less promotions as a growing concern.
Carol Olsby, who runs Carol Olsby & Associates in Seattle and is a member of the Society for Human Resources Management’s national expert panel, said she sees raise-less promotions as still relatively rare. “I think that it is still the exception,” Olsby said. “There are times when it happens, but I don’t think it is a trend.”
Olsby said what’s more common than raise-less promotions are companies suspending annual merit raises and workers picking up additional responsibilities without a promotion or a raise.
“We have seen people required to work way more than they are used to, because with layoffs, they have had to assume additional responsibilities and have not gotten promotions,” she said.
With all the added work and financial stress at some companies, Rhodes at the Cornerstone Group said some employees who put advancement before money are thriving while others are ready to crack.
“I think it depends on the employee; for some employees it is not about the money, it is about the ego,” Rhodes said. “For others, who have seen spouses laid off, they are seeing it as a real negative. I am actually seeing senior managers break down from the stress.”
Work forces have become so stretched, Rhodes said, that some companies are even doing away with human resources departments and asking workers with no experience to take on the role, prompting Cornerstone to create an “HR boot camp” for clients.
On whether workers in the future will push back against employers who offer more work without more pay, Rhodes said eventually the pendulum might swing to workers’ favor.
“A lot of employees are scared and sitting tight, but a lot are saying as soon as this job market eases, [they] will be looking for a new job,” Rhodes said. “The thing we see in our area is a huge shift with baby boomers getting ready to leave jobs, which could leave companies stretched.” •

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