How to set your own raise, fairly and ethically

Dear Bob …

A few years back during the annual salary review process, I was given a fixed sum to allocate to my team of developers, administrators, and IT support staff. I was diligent and thorough in the allocation, ensuring that each team member received his or her due within the budgetary constraints.

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When I presented the distribution proposal to my new boss, his only criticism was directed at my failure to set aside money from for my own pay adjustment. Furthermore, he criticized me for allowing some team members’ pay to exceed my own. He then directed me to revise the distribution.

My gut reaction was that determining my own pay adjustment was not ethical. I also suspected that the boss was attempting to lay a trap with his directive. (To keep the story short, I’ll not go into the list of his disruptive acts that gave birth to schemes, intrigue, and conflict in the office. Let’s just say that he established a pattern of behavior that fostered paranoia.) Thus, I resubmitted my original distribution proposal and went without a pay adjustment.

While he and the company are in my past, I find myself reflecting on that event occasionally. Did I do the right thing? Or should I have handled it differently?

– Raising the Roof

Dear Raising …

I was hoping you’d ask me the easy question: Did your manager handle this properly? That’s a slam dunk. The answer: Of course not. Nobody should be responsible for either budgeting or setting their own salary increases. That only makes sense under the theory that we each are the best judges of our own performance and are entirely immune to conflicts of interest. I suppose a case could be made for these theories, but only if minor factors like evidence and logic aren’t part of the discussion.

Usually I can at least figure out a plausible hypothesis of how a manager might rationalize his/her behavior. This time I can’t even come close; the best case is that your manager was either too lazy or too cowardly to give you an honest assessment of your performance and preferred not to do his job in deciding on your compensation change and explaining it to you. My other hypotheses are even worse.

On the other hand, I don’t see that determining your own pay adjustment would have been unethical, once your manager directed you to do so. Not only that, I don’t see that it would have been particularly difficult — quite the opposite. Here’s why: By definition, you’re responsible for the performance of the organization you lead. You get credit for its successes and are accountable for its failings.

Point two: While in a team environment, the whole can be either more or less than the sum of its parts, but when the time comes for compensation changes, that fact goes by the wayside. Actual raises are individual — the company doesn’t pay the team aggregately.

This means your performance is the same as the average performance of the members of the organization you lead. Under this framework, you should have divided the fixed sum allocated to you by the labor budget for your organization, including your own salary. That number would be the average raise, which is what you would have awarded yourself with a clear conscience.

It sounds to me like your manager was trying to inflict some pain on you, and you fell for it. But then you had the good sense to leave. As is usually the case, voting with your feet with no regrets and your sense of humor intact is the best course of action.

– Bob

This story, “How to set your own raise, fairly and ethically,” was originally published at InfoWorld.com. Read more of Bob Lewis’s Advice Line blog on InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.