Weighing Raises, Promotions
Do employees prefer a payout or a promotion?
That’s the million-dollar question that researchers at Korn Ferry recently sought to answer. According to the organization’s December 2017 survey, the approximately 850 workers who participated were fairly evenly split: If given the choice, 54 percent would opt for a raise without a promotion, while 46 percent would prefer a promotion and no raise.
Tom McMullen, senior client partner at Korn Ferry, notes that most employees naturally would want both the increased salary and the elevated title, but the organization used the forced-choice survey to identify which holds more weight.
While a raise won out slightly over a promotion, McMullen predicts that, the longer an employee is with a company, the more attractive a title change may become.
“My personal sense is that, as you move up from the lower levels in an organization to higher levels, career advancement becomes incrementally more important,” he says. “For the people in lower-level jobs, there’s Maslow’s hierarchy of needs at play: People need a solid base wage, benefits, etc. As you move up, ensuring career advancement becomes more top of mind.”
The survey findings may have been hypothetical, but participants also weighed in on the state of promotions in their real-world workplace situations.
About 65 percent hadn’t gotten a promotion in the previous year—of them, 57 percent cited a lack of growth opportunities in the company as the primary reason, while another 24 percent pointed to office politics.
“That should be a wake-up call,” McMullen notes about the role “bottleneck” can play in turnover.
In Korn Ferry’s employee-research surveys, he notes, the No. 1 reason professionals and managers exit an organization has consistently been the perceived lack of career-development opportunities.
“There’s too much demand and too little supply, or it could also be an issue of bench strength—there are a lot of capable leaders who are being promoted over others,” McMullen says.
Despite those realities, HR can take the lead in helping organizations define opportunities for career advancement. “We’re seeing a lot of focus in organizations today to do a better job at helping identify progression opportunities, both within and across functions. Increasingly, more and more organization are saying it’s as important to be able to move around as it is to move up,” he says.
Respondents overwhelmingly (83 percent) said they would speak with their boss to identify growth areas if they were in the market for a promotion. If they were passed over for an elevated title, only 10 percent would immediately seek a new job, while most (67 percent) would try to identify the reasons why and work on improvements.
HR leaders can be proactive in encouraging those conversations, McMullen says.
“[HR] can help set goals, provide ongoing feedback, coaching and development advice,” he says. “If managers aren’t doing that, there’s a gap there. There has been a lot of focus—and justifiably so—on creating a culture of continuous dialogue, especially for high potentials. More frequent sit-down discussions on what their hopes, needs and aspirations are can be absolutely key to keeping them engaged and retained.”