The Management Gap in Employee Expectations

By Daniel J. Murphy

**Not speaking for myself**, but rather on behalf of some friends at other startups who are dealing with incompetent managers. For whatever reason, these managers do not know how to handle realistic expectations of gifted employees. It's frustrating to hear about because great employees are alienated by poor management. Today, where talent is the common denominator between startup success and failure, it’s concerning that this is not talked about more often.

Also, I’m not just taking the side of the employee. In many situations it’s the employee’s expectations that are unrealistic. But I’ve heard and even seen more situations where it’s the manager’s inability to understand and address the employee’s expectations that causes the rift between great talent and the manager/company.

Can’t we all agree that employees who work hard, are dedicated to their jobs and go about doing their jobs in a fair and productive manner should be properly compensated for it? Should be given growth opportunities? At a bare minimum, employees should feel like their hard work is appreciated by their manager and the startup’s management team, right? They should feel like their expectations are realistic in the eyes of their manager, because if not there’s no trust and no motivation for that employee to stick around.

For whatever reason there is this gap. This is the manager to employee expectation gap. I’ll dive into one such area of the expectation gap: salary adjustments and how they are calculated.

A few weeks ago, a friend told me about a recent salary adjustment conversation she had with her manager. My friend was given a modest salary adjustment, even though another team member making 25% more than her was leaving the team and would not be replaced. This friend was told by her manager that she shouldn’t expect to be compensated as much as her colleague because her colleague, who was doing equivalent work, has an MBA and she does not. Mind you, this is at one of Boston’s darling startups. What’s worse is that that manager is upper management at the company.

When it comes to compensation adjustments, I think startup managers should use this hierarchy (and this is what I’ve seen at my current startup, because we have great managers):

These factors should hold the greatest weight:
1. Contribution to the team/goal
2. Growth potential
3. The employee’s years of experience

These factors should hold lesser weight:
4. The employee’s title
5. The employee’s age
6. The employee’s degree(s)

If you want to retain good talent, you need to pay them. And if the “lesser weighted” factors I have above, in your mind, really should be the greatest weighted factors, then you’re abiding by an antiquated management style.

In other words, if two team members are truly equivalent in their contributions to the team, and have equivalent growth potential, but you pay one employee a significantly higher salary simply because he or she has have an MBA, you’re practicing an archaic line of reasoning that has no place in startups.

Today’s workforce is more equipped with knowledge than ever before. The employee has never before had more access to knowledge resources (thank you, Internet). You just can’t hold back someone’s salary adjustment because a colleague has more education, is older or their title is more senior.

Startups are suppose to disrupt markets, advance modern technology and in the process use unconventional methods to beat stiff competition. Unconventional methods is the secret sauce that empowers startups and gives them their edge. Startups can beat Goliath because they can execute quicker than their competition, or they can capitalize on new market trends (like inbound marketing), or they can do what large corporate competitors cannot. But when startups do things like their large corporate competitors, such as use outdated salary adjustment calculations, they lose their edge.

I think more startups need to focus on their expectation gaps, because without addressing them, they will only become more severe. I see this as a budding issue of today, but a potential crisis of tomorrow.

Agree? Disagree? Comment below, please.