Case study – refusing to increase base pay further

Case study – refusing to increase base pay further

I have created, over the years, a “swipe file” of C&B situations I have faced and how I reacted to them. The idea is that I keep a copy of the more seminal communication pieces I have written, mostly one-to-one, not the “all employees” emails that we all have to spend from time to time.

Generally speaking, these are emails I wrote in times of disagreement with an HR colleague, a line manager or an employee – they want something specific, I don’t want or can’t grant it for a number of reasons. Or, just as often, the opposite: an employee or line manager doesn’t want to proceed on a given requirement and I need to influence/persuade them to act upon it.

The purpose is for me to use this swipe file to educate my team on how to approach specific circumstances. Let me share one today.


A long time ago, my company was employing a communications agency to support the Group Communications department. Group Comms had found a good candidate a few years before, but they couldn’t hire him due to headcount restrictions so they had agreed with the agency that the agency would hire him and dedicate him full time to the account of the company, even sitting in the company premises half of the week.

Then, times changed. Focus was put on cost control, and the company realised that the agency was charging them more than double the cost of the person. Suddenly, having this person as an internal employee did not seem such a bad idea any longer and they offered the guy a position within the company.

There was a bit of negotiation, and with the final offer the new package for the employee resulted in him earning 15% more on gross pay to do the same job with the same people he had already worked with in the past few years. And the company was still making significant savings compared to the previous situation. So this was a win-win.

The situation

…Except that the employee did not like the offer. As an agency representative, he had been complaining about not being part of the company and being treated different while he was really a team member. For example he could not be invited to internal company events, he was not included in some email distribution lists, and did not benefit from the company-negotiated discounts on products and services from hotels, spas an restaurants in town.

Yet when the offer came his way at the end of the negotiation, he felt this was not enough and responded as follows (actual email, only names have been changed) :

“Dear HRBP,

Thank you for the latest offer you sent through.  It is however not commensurate with my level of expertise, the institutional knowledge I bring with me and my ability to deliver value to the organization immediately.  Moreover, it is not in line with what the market would offer.  The grade you are proposing to bring me into has the latitude in the salary range to allow for a base salary of 22,000 AED while keeping me well within the median for peers in the same salary grade.

Hence, I will only accept as a minimum a base salary of 22,000 AED for reasons of internal and external equity.  I look forward to continuing my contributions to the success of the team.



Needless to say, the HRBP was not happy about that reply because it had been clear that this was a final offer and negotiation was not open any longer + he didn’t like at all the tone of the email + the offer was honestly a fair one + if “market would offer” more, why hadn’t Joe moved out a long time ago already + there was another alternative to transfer Joe to another contractor that would charge a lot less than the agency fee, yet the employee in that case would not receive any increase at all + the skill set required was not that difficult to find in the market?

But he didn’t know what and how to say it, so he called the cavalry (that would be me). We discussed the situation, both agreed we would not change the offer, and I would write down a mail with reasons why that the HRBP could use in his discussion with Joe as well as with the line manager, because the HRBP was concerned the line manager might want to support Joe’s request.

The answer

HRBP emailed me : “Dear Sandrine, Please find below the reply I received from Joe, he is looking for a higher basic salary, is there any room to adjust higher?”

My reply :

” Dear HRBP,

I do not agree on increasing the basic pay further and here are my reasons :

  • The latest number was already the result of a negotiation between us. We agreed that at year-end Ahmed (line manager) would be able to raise a request for internal equity if he wants to and thinks he is worth making the special request and fighting for it at salary review time.
  • 18,000 is within the salary range for that grade. Internal equity does not mean that we have to pay all people the same.
  • Again – we are only changing his contract and he receives a 15% increase just for the change of name on the contract.
  • Previous contractors at senior level who moved into permanent roles at Company X received at max 10% increase on gross pay (for example in Finance team)
  • I do not see why we should give him more than what an internal employee would be getting as an increase for salary review with a performance rating of 4 (they would get 10% on basic which is around 5% on gross…)
  • Plus, do we really want to accept “blackmail” from a future employee ? “I will only accept as a minimum a base salary of 22,000 AED” in his own words ?????? Is it the kind of behavior we want to promote in the organization ? Attitude and behavior are important parts of the company culture and to me this kind of comment does not fit with what Company X wants to stand for . And by the way, what if we were to withdraw the offer to make him a permanent employee ?

I understand the drive to try and reduce costs of the agency and I am not trying to block you, but this should not give any employee a upper hand in negotiating conditions with Company X – we have never proceeded this way and there is no reason for us to start like that. If Joe really thinks that 15% gross increase is not worthy of him, I would advise Group Comms to start looking for someone externally for the permanent role and then tell the agency that we don’t need him any more. I am sure the agency will find another company willing to pay multiplier costs for him.

I have copied Ahmed for him to understand the reasoning behind my response – Ahmed, I will be happy to discuss in person if you want 🙂



What to learn from this

I use this email thread with my team to show them a number of things. Trust me, this is not for anyone to copy it or imitate my style or type of reaction. I am aware that I can be a bit direct in situations like these, and a lot of people prefer someone who will be more diplomatic in the way they express disagreement. I know that this is not necessarily a perfect example of written communication in terms of style or grammar, but my learning point here is different.

I wanted to share with you the kind of arguments you can use when an employee or candidate has a request regarding their salary that you disagree with.

You first look into equity, the person’s individual profile and history, past reference points, as well as values and principles. Then you make your recommendation.

My email is shown here to give you a view as to how you can struture your reply and advice.

See how I have :

  1. explained why I am giving a negative response (all the bullet points)
  2. given context and alternative solution (the paragraph about “I’m not trying to stop business”)
  3. copied the final decision-maker (Ahmed, the manager) so that my message goes undiluted to him because, for many (good) reasons, the HRBP may not represent my ideas as strongly as I do. It’s always best to communicate directly especially when your decision is potentially blocking someone’s plans yet you have been contacted by an intermediate not by the final decision-maker.
  4. also extended my hand to discuss it with Ahmed in case he wants to further negotiate. If he does, he will speak to me and see me as a peer that you can seek advice from, not as a subordinate making an irrational decision that is impacting his business negatively.

Yes, it takes longer to write a structured email like that, rather than a simple “the current offer is in line with market and we will not change it”. But this kind of answer gives value to the HRBP, who can use it in his discussions with both Joe and Ahmed.

It positions you as someone who is there to support the business and can think of different solutions to a problem.

And most importantly, the manager then needs to have a strong argument if he still wants to increase the package, because there is now a rationale behind the current offer we’ve made. So the manager also learns that HR is not doing things in a vacuum, and that being a line manager is not enough by itself  to overrule an HR decision – he needs to have a business case for it. By making the manager step up his game, you make him consider HR as a worthy partner, not just a gatekeeper.

I am sure a lot of my readers have faced similar situations. Are there other tips you recommend ? Please share them in the comments section !


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  1. Samina Anwar says

    Hi Sandrine,

    I like the experience you have shared with us as it is no doubt a learning point for of us C&B professionals. I have faced a similar situation many times in my dealings with comp issues and try to justify the range proposed for the role, more or less in a similar manner by providing concrete evidence of how and why in terms of the local company pay philosophy, structure and the ranges applicable.

    What I like most is that you keep these one off special cases for internal mentoring / coaching exercises for the team and HRBPs and use such incidents for learning & development perspectives. Well Done and keep up the Great Work with interesting articles!

    Best Regards,

    • Sandrine says

      Thanks a lot Samina for your words of encouragement. When I started my career in Compensation & Benefits, many years ago, unfortunately I did not have a C&B boss nearby to help me navigate some tricky situations and I know I wished at the time there could be someone to guide me with a simple 5-minute discussion. So now I try to provide that to my team members if I can.
      I am glad that you think this is useful for them, and also that there is value in my posts !

  2. Good one Sandrine. I completely agree! I find it amusing on how line managers don’t mind paying more and go over budget than having a difficult conversation.

    I understand line managers’ eagerness to get someone on board soon, but what they forget by agreeing to such demands is that such behaviour is acceptable within the organisation/team. This will only turn into a bigger problem once they are on-boarded and start demanding new things frequently.

    You rather be firm now and set an example that you will not tolerate such behaviour than suffering later for countless demands one might have.

  3. Hi Sandrine,

    Excellent training points from a real life situation, and thank you for sharing.

    I can relate to the situation you have outlined. Before sending an offer out to the candidate, I discussed the offer with the HOD or Line Manager including any scope for further negotiation . We found this to be a win-win. But if the tone was as offensive as ‘Joe’s” message, we would also refer to the company’s code of conduct and core value of “Respect in the Workplace’ for non-negotiation and withdrawal of offer. Keep up the good work!


    Hi Sandrine , it is really great to read such case studies that ignites your thought and expand your knowledge horizon..I would like to see this from an employee perspective also ..If I would have been an employee , the reaction would have been the same ..I feel that all along I was deprived of all the benefits by putting me through an agency and now company want to hire me because I am competent and may be better than the team members..the very of thought having deprived of benefits which your peers were getting inspite of less competent and merely beacuse they part of the orgainsation can really make some one frastuated and respond with tone not what is expected …I think probbly understanding that and approach the situation can make the outcome different

    • I agree Arun, being treated differently because one is a contractor is quite difficult, especially of the person remains a contractor for a long time.

      I believe there are 2 main aspects to this “difference in treatment” ”
      1 – for legal reasons, a person working on site but who is not an employee of the company (for example a contractor, agency employee, interim worker…), cannot be included in official company communication and email distribution lists, can’t be eligible/included in performance appraisals and the company’s salary review process, can’t attend all internal company events, etc… Otherwise, in many countries, the person may be re-classified as employee, on the basis that he/she is treated like an employee
      2 – often, when it comes to salary, the company doesn’t know how much the agency is paying the person. The company only knows how much the agency charges them for the services. So yes, often, the contractor/agency employee ends up being paid less than the company employees they are working with on a daily basis. Unfortunately this is not something that the company can do much about, because it doesn’t have authority to make salary decisions about another company’s employees (in this case, the agency).

      In the case I’ve described, the agency was charging a large amount of money for the services delivered by the person. When we offered him the job, we made a fair offer, in line with the market and in line with his colleagues. And, we had negotiated the content of the offer with the person. We had a fair offer, both internally and externally (internal equity and external competitiveness).

      The employee demanded a 22% extra salary increase, on top of the 15% we were already offering. Not only this would have put his pay outside of market and internal values, but his position was “take it or leave it”…. which was wrong. We (company) could have kept him through the agency, which wouldn’t have improved his personal situation, and would have continued to cost us dearly – a lose-lose situation. And if it was true he could have made the extra cash by taking on another job, why hadn’t he done so already ?

      I contend that we did take into account the employee situation by making an offer which was fair internally and externally. We did not try to get the employee for “cheap”. We increased his salary while at the same time reducing our cost. And this gave us the opportunity to also fully integrate the person into the company’s processes, events and communications.

      Eventually, it is the person’s right to decide whether they want to accept the offer or not. As long as the company has done its best, this is how hiring negotiations go….

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