Are You Underpaid? Why Bob Makes More Money Than You Do.

(Guest Post by “Your Boss“)

You and Bob do the same job. Both of you have worked the same number of years for the same company. One day you find out that Bob makes more money than you do. What happens then?

Let me tell you what happens: You get mad. Your start to resent Bob. You start to hate your boss. You lose sleep. You toss and turn at night, thinking about all the possible “whys.” You know it is not your performance. You suspect it is not your looks. You are sure it is not your personality. It has to be something else, right? Right. It is always something else.

So what are the potential reasons that your co-worker is making more money than you?

Reason # 1: Bob is a better negotiator

Bob probably did not accept an offer right on the spot. Instead, he negotiated. You, on the other hand, probably accepted what was offered forgetting that you could have asked for more. In my long career I’ve observed an interesting fact: men negotiate more than women. Women are less assertive in their negotiation techniques. I am not trying to be biased (I am a woman myself), but I have to admit that it took me a long time to learn how to be more aggressive without coming across as offensive. Or bitchy.

Tip: Start negotiating! When you opt out from negotiating your salary, you are more than likely leaving money on the table.

Reason # 2: Bob has more experience in the field (and you don’t know it)

I recently shocked a group of people in my office when I told them I used to work for the U.S. Small Business Administration. There is always something that we don’t know about our co-workers. Maybe there is a skill or experience that Bob brought to the company that is more valuable than yours?

Tip: Stay on top of new industry trends, attend professional conferences and seminars, and get additional professional certifications in order to increase the value you bring to your company.

Reason #3: Bob has a degree and you don’t

Some companies tend to pay more to people with degrees. I am a strong believer that a college degree is not a bad investment. It might be difficult to find a job after college, but once you do find it, you will probably make more than someone without a degree in that same position.

Tip: Get a degree.

Reason #4: Bob is a better employee

What I am going to say next might hurt. Have you ever considered the possibility that you might be not as good as you think you are? I know I have self-doubts. But I also think that people, in general, tend to overestimate their value to the company. It is not as easy as it seems to take an objective look at ourselves and answer the question if there is a reason why the company does not appreciate your work as much as Bob’s.

Tip: Volunteer more. People who volunteer to take on more responsibilities – without bringing up the money topic – are typically valued more than others.

Reason # 5: Your boss wants you to leave

It can be that simple. Sometimes we do not have the guts or legal reasons to fire you. Sometimes we feel guilty. Sometimes we just don’t want to deal with personnel problems. It is much easier for some of us just to not give you raises or promotions. We hope (sometimes in vain) that you are going to get the hint eventually.

Tip: Re-evaluate your relationship with your boss.

What You Can Do About All This

  1. Research your industry to find out what is the going market rate for the job you are performing. The site is a great place to start. After you are done with your research, you want to be able to say something like this to your boss: “The fair market rate given my skills, experience and responsibilities is ____.”
  2. Ask for a raise. However, leave Bob’s salary out of the discussion. Do not tell me you know that Bob makes ten grand more than you do and you think it’s unfair. What I will hear is this: “Bob is boasting about his salary, and you are using this information to extort your raise.” You can guess where we go from there.
  3. Work on building your relationship with your boss. I am personally willing to listen more to people who put in some effort to get to know me. You don’t have to tell me your life, but a simple question about my weekend is a nice starting point.

Remember, you cannot control how much money your coworkers make. But you can control your own performance, the value you bring to the company and, in most cases, how much money you make. Any questions?

“Your Boss” is the creator and author of the blog What Your Boss Really Thinks, where she expresses her opinion and advice on career, job search, management issues and office life. Your Boss created her site to help people to better understand their boss, give a direction and provide some guidelines on how to navigate life in the office. Feel free to ask her about your office or career dilemma by submitting an Ask Your Boss form on her website.

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  1. Pauline November 8, 2012 at 7:03 AM

    My boss hired Bob to “help me”. Then I overheard that he gave Bob the same salary I had negotiated hard and fought to upgrade by 30% over the past year, so that we didn’t find out that there was a discrepancy. Bob had no degree, experience, and was unable to relieve my workload for the first 12 months. Not knowing each other’s salary helps keep you sane…

  2. Lance @ Money Life and More November 8, 2012 at 7:23 AM

    I definitely believe in the fact that you never know what the other person is bringing to the company. They might have some key experience you don’t or might have a license you aren’t aware of.

    In terms of negotiation, if you don’t do it you should expect to be paid lower than your colleagues who do negotiate. Companies aren’t looking to pay you the most they should, only you can do that.

  3. Money Beagle November 8, 2012 at 9:15 AM

    This can definitely suck, I’ve been on both sides of it where I knew I was making more than others doing the same job and where I knew I was making less. A lot of times, once you are in the same job, your salary mobility is limited, and you have to take a different job (even in the same company) to have a chance to really make a big gap upward. Perhaps Bob has been with the company and moved around enough that he’s been able to take advantage of some salary bumps along the way.

  4. BD November 8, 2012 at 9:36 AM

    Personally, I think the code of secrecy most employees have around their salaries helps the employer more than the employee. Knowing what others make in similar positions at your company and in the market in general puts you in a better position to negotiate.

    Also don’t rule out that it is good ole fashioned discrimination due to age, race, sex, or some other protected characteristic.

  5. LB @ Finanical Black Sheep November 8, 2012 at 10:46 AM

    I ALWAYS figure out what others make. I have worked for too many contract companies to understand, you are never treated the same.

  6. Jay @ effumoney November 8, 2012 at 11:20 AM

    What does it matter what Bob makes? Bob can make nothing or Bob can make $1 million an hour, either way it does absolutely nothing in regards to building your own wealth.

    The question you have ask is are you paid well enough for your time? If not do something about it, ask for a raise, get a new job, find a second job, start a business, just about anything.

    If you spend too much time worrying about what Bob makes or his credentials you are spending less time coming up with ways to make more yourself.

    Just saying…

  7. Melissa November 8, 2012 at 12:59 PM

    I know, I know – this is just a small snapshot of reasons, but from an HR perspective, I thought I’d weigh in with a few more reasons why he’s paid more (below). Also, as to the reasons above – I’m not sure that getting a degree for a position you are already in will have much, if any, impact (other than the educational field). That would matter prior to accepting a position a lot more (although it’s rare again, for two people with vast backgrounds such as degree/non-degree to be hired for the same position these days).

    1. Bob has received higher annual ratings and merit increases than you – because he is perceived a better performer.
    2. Bob is more personable – I know, it sucks, but people tend to be more generous with salaries with someone that they feel is on their side or can be a better “partner.”
    3. Bob as ASKED for more money – during annual reviews, following a huge project or recognition, he asked for more when his value was being evaluated.

    And I agree with @Jay – you should spend more time concentrating on the bang-for-your-buck that you get from your salary and your position, regardless of what others make (as painful as that can be).

  8. Tom November 8, 2012 at 1:04 PM

    Great post! So many good points in there.

    I like the first reason you give the best!


  9. 20's Finances November 8, 2012 at 1:27 PM

    Great tips – I have learned that I need to negotiate more than I have in the past. This might be an idea for a post, but when you are being hired for a new position and they offer you a salary, how would you recommend negotiating the salary up? Do start with expressing your interest, but then explain why you want more money? Thanks for the thoughts. :)

  10. Your Boss November 8, 2012 at 2:27 PM

    @Pauline – Interesting situation. I have no idea why your boss hired Bob with the same salary (I wouldn’t do that!) so I cannot talk for him/her. Sometimes trying to keep everyone happy just doesn’t work well.
    @Lace – sometimes people get such great offers that negotiating any further might be deemed offensive. :)
    @Money Beagle – true. I actually moved up myself because I changed departments and jobs. I know people who are doing the same jobs for years and years, and they are maxed out.
    @BD – if it is in fact discrimination, it can be grounds for a legal case.
    @Jay and Melissa – excellent points. By the way personality (as in a “personable”) does get you farther. :)
    @Corey – don’t jump into negotiating right away. As I said above, sometimes the offer you get might exceed your expectations. I am not going to write another post in the comment sections about how to negotiate a salary, instead I am going to email you! :)

  11. Jenna, Adaptu Community Manager November 8, 2012 at 4:06 PM

    Great tips! Thanks for the reminder.

  12. J. Money November 9, 2012 at 8:06 AM

    Haha AGREED, Jay @ effumoney! Just reaaaaaaaal hard to do and not pay attention to once you find out ;) I prefer to just be in the dark about everyone else’s salaries for sure – it’ll just drive me nutso.

    Thanks for the great post, Your Boss! It kinda sorta didn’t make me miss my 9-5, haha…

  13. Cat November 9, 2012 at 11:42 AM

    I use glass door frequently, since I am a new professional and unsure how much I am worth and I am afraid of not getting what I deserve (especially with all those college loans I have!).


  14. maria@moneyprinciple November 9, 2012 at 5:13 PM

    In my line of business it can be ‘Bob’ is male: male professors still earn on average 20% more than female ones. This sucks and I am glad I am also a blogger.

  15. J. Money November 9, 2012 at 9:19 PM

    @Cat – Good for you! I only learned about it after I was done with 9-5s but if I ever go back it’ll be one of the first places I check!! Maybe they have blogging and social media stuff on there too? Hmm…. I kinda just made up a number when I decided to do blog consulting, haha…

    @maria@moneyprinciple – That def. sucks, you’re right :( I do hope it evens out more in the very near future!