Behind the Glass Wall, Part III

Part II of this series showed how truth travels with stress, and how trust underpins what owners express to employees. Part III asks a harder question: what do we owe each other once the numbers are set?

Strangers at the table

Imagine two climbers on a glacier, roped at the waist: if one slips, both may fall. Or two rowers in a shell: pull out of sync and the boat spins; pull together, and they slice through the water with ease. Two people in a marriage both win, or they both lose. There is no third outcome.

Now imagine the partners in each of these pairs openly negotiating on the explicit value of the other in the relationship, in dollar terms. It’s absurd, predictably inflammatory, and well... just off-putting, especially in light of how much each depends on the other.

Such is the situation between employees and the companies they work for. Two strangers size each other up across a table, estimating what the work will be worth, how the person will interact with the culture, and what the person and the company will become as a result of their participation. They commit to a salary before either side has seen a single day of actual work. The guess calcifies into a contract, and both parties spend the next year discovering how wrong they were.

A salary is nothing more than a stab at the proposed value exchange between employee and employer, agreed to at a point when the future dynamics of the relationship are cloudy at best. We agree on a number and take a leap of faith. Further, the initial negotiation locks both participants into an adversarial mindset that only loosens over time with the development of mutual trust. How should we align our thinking in this context?

Worth is a guess

For brevity and immediacy, in this section I will adopt the first person when referring to owners, and the second person when referring to employees, noting the obvious fact that I was once an employee (and am not an owner now), and you may be (or will become in the future) an owner.

One of the most oft-repeated complaints I’ve heard over the years is “why don’t you just pay me what I’m worth?” This presupposes that I don’t think I’m already doing that, but there are many potential answers to this question.

There is no single “market value” for your salary. The market will pay a wide range of values for your set of skills. Additionally, one company may be able to extract more value from your work than another, making you more valuable to them (note that this doesn’t mean they’ll pay you more).

Consider two potential salaries: one from company A and a lower one from company B. If all else were equal, you’d likely choose the higher salary at company A. But all else is not equal:

• you might not ever find company A

• company A may not be hiring

• company A might want you to work longer hours

• part of the job at company A might be relatively unpalatable to you

• you may have to travel a long way to get to company A’s office

• you may prefer the culture at company B

• your boss at company A may be a nightmare to deal with

• your growth prospects at company A may be limited, especially if you’re placed in a unique or niche role

You want to be paid “what you think you’re worth,” or maybe even a bit more than that. I want to pay you “what I think you’re worth,” or maybe a bit less than that. Your idea of what you’re worth will often not match mine, because our internal assessments of you don’t match, and because different people value things differently.

It’s really fun when both of us feel like we got away with murder. Remember that IKEA advert where the shopper yells out “START THE CAR!” because she feels like the cashier made a mistake in totaling her bill? You secretly enjoy the feeling of making out like a bandit when it comes to your compensation. I don’t blame you. For my part, I enjoy the feeling of finding a great jacket on a 20% sale. This doesn’t mean I wouldn’t buy the jacket at regular price, but who doesn’t like a good sale?

By definition, any salary you accept will be more than the least you’d have been willing to accept, and less than the most I was willing to pay. And it’s probably going to be more than what I think I could have negotiated, and less than what you think you could have, due to our respective FOMO on the deal that “could have been.” We’ll both feel this more acutely as soon as we agree on a number. But exhaustively optimizing the number is not constructive. We’re each trying to make progress by getting most of what we want.

Your salary should be somewhere in the overlapping intersection of our ranges, or else some change (welcome or otherwise, from either party’s perspective) will eventually ensue. If you accept an offer near the lower end of your range or below, you’ll eventually leave. If I ever agree to pay you more than the upper end of my range, eventually you’ll be laid off. Both of us can make value determinations independently, so in a sense there is no reason for either party to fret about the number before or after an offer is accepted. We can agree to disagree, but a contract is a matter of choice and agreement. The best outcome in this dance is for both parties to try to get compensation off the table as a point of discussion, because it has been set at a mutually acceptable level.

Image Generated by Gemini

Hiring managers are incentivized to fill open positions now, and are willing to pay a premium to get it done, especially if there is a short-term problem they need to solve. The same is true in reverse if the candidate needs the income now. There’s a time value to solving problems sooner rather than later.

Note, however, that this pendulum is self-correcting. If the employer is overpaying (from their perspective) to get you to sign now, they’ll likely try to rebalance in the future by restricting your annual increases over time to recoup those losses, or to get you back into their target range for your role. If you capitulated due to financial stress, you’ll likely later argue that you need to be paid more, even if you’re not bringing more value to the company, and you’ll continuously scan for better opportunities now that the pressure is off.

To feel good about an offer means you should know ahead of time the minimum salary you would accept, and I should know the maximum I would be willing to pay. It’s the same thinking that makes a good investor in the stock market — your entry/exit position prices should be clear in your mind before you begin, or you’ll be dangerously swept up in the emotion of price swings, buying high and selling low.

Internally committing that we will each be happy to accept a salary proposal that respects our internal number helps us to manage our emotions. Employers have more practice with this because they hire many people, so some mental prep may be more useful for you. It also prevents unnecessary resentment from being carried forward and unleashed in the future, generating the stability we both want for the relationship over the long term. We can stop talking about money and get down to business.

Moving the needle

Once the initial number is set, another (annual) struggle begins. Salaries tend to rise over the long term, but this only makes sense to the company if the employee is concurrently becoming more valuable to the company over that time frame. The simple fact that an employee has been working for some time at the company does not increase their value. Here’s what does:

• becoming more efficient at the same job

• increasing the quality of your work in a way that matters to clients and colleagues

• taking on higher-value responsibilities that currently have no home within the organization

• taking on a management function, raising the value of all the people you manage and removing worry from owners and leaders

• contributing to the life and culture at the company, giving the community a more positive day-to-day experience

• in the consulting business, being able to convince a customer to pay more for your time; more generally, improving the ability to raise prices on a product or service as a direct result of your work

If you can reasonably show that any of these is true, then you have the basis for a salary negotiation. Good employers will usually be completely fine to pay the increase for your additional contributions. Conversely, if they can’t see that value, they won’t want to pay the premium.

“Tenure” is weak as the sole argument for an increase. Employment law already attempts to quantify the financial debts owed for the tenure provided, so it’s a good idea to be familiar with your region’s treatment of them (your employer certainly is). “Inflation” is another weak argument for an increase, as both parties experience it concurrently.

Sometimes people threaten to leave because they believe themselves to be worth more on the market. This may be true, but it doesn’t necessarily mean they’re worth more “where they sit.” In fact, many regularly overestimate their worth to their current employer, and underestimate their replaceability. The choice of a middling or low performer to leave the company is often a relief to the employer. It removes the need for an uncomfortable conversation and a possible severance payment, and presents an opportunity to hire a better replacement.

It’s also true that many employers have no idea of the potential value of their employees, because they either don’t know their workers well enough to unlock it, or they have an incomplete mental model of what is truly valuable to the business. It behooves you to regularly assess the additional value you add to an organization, and make this plain in the input to your performance reviews. If your employer simply isn’t listening, then a change is in order.

Employees with a scarcity mindset may assume that the company “simply doesn’t want to pay more so that they have more for themselves” and are somewhat suspicious that they’re being taken advantage of. I concede that owners with a scarcity mindset may indeed fulfill those expectations. But I’ve regularly seen the exact opposite occur at Jonah Group and at other companies where I’ve been privy to those conversations.

If you’re vastly outperforming others in your salary peer group, the company will likely give you bigger increases to get you back into what they believe is the target range for the value you bring. If there is a large gap to be bridged, though, employers will often do this in two or three “hops,” because they predict that this will give you a better overall “experience” with respect to how your compensation is progressing. The downside of this is that it doesn’t maximize your financial return, but there’s a balance here: a very large increase all at once soon gets taken for granted, and the much smaller one that ensues in the following year makes you wonder what you did wrong.

An employee’s decision to stay, or an employer’s decision to continue to work with an employee, should be based on a mutual appreciation of facts, of which salary research, responsibilities, and intangible contributions should all be represented. Neither party should be sheepish about discussing these openly with the other. A discussion about worth can raise the temperature, but grounding it in facts and shared understanding of them can also lower it. A decision to continue working together should be good for both parties. Ending the relationship can also be good for both parties.

The hidden ledger

In my experience, people tend to focus too squarely on the base salary negotiation. Decisions on value are usually much more nuanced than that, because intangible value can be vast.

For the employer, this shows up as your proactiveness, positivity, energy, leadership, and cultural participation, among other things for which the company is the primary beneficiary. Similarly, the intangible value associated with the organization’s environment and culture (belonging, social opportunities, purposeful work, culture, career development, training opportunities, etc.) accrues to the employee. They are often the unexpected dark horse of the compensation equation, whose appearance is a quiet, welcome surprise.

The value of intangibles often eclipses the error bars associated with the base salary, and stretches the acceptable base salary range significantly.

Owners have broad data associated with a wide variety of hires and working arrangements, allowing them to better calibrate the value of intangibles they give and receive. They also understand comparative performance and salary dynamics because they spend time comparing the relative performance of their staff members to assess increases and bonuses. Finally, they know how easy or difficult it is to find people to fill certain roles, because they are continuously engaged in that practice. Over time, they develop an intuitive understanding of how to hire and manage toward long-term health and ROI.

Employees usually understand the intangible value they may receive, but don’t necessarily consider how the intangible value they contribute can affect their compensation. This puts them at a disadvantage during salary negotiations. Additionally, unemployed candidates are often caught in a crucible of stress from having to secure their meal ticket. This may give rise to a mindset that the employer’s “power position” in the negotiation is heightened, leading to poor results.

One antidote is to prepare a list of questions for your prospective employer — not just to show you spent time preparing questions, but because open conversation helps to put you on a more level mental playing field. Thoughtful questions also help employers muse about your intangible value to the organization. Ask about the company’s approach to overtime (not simply their policy), and relate your own. Ask about the extra-curriculars that happen within the company, implicitly showing an interest in the culture. Perhaps talk about something you’d like to do to improve the community and ask if there is space for that within the organization.

Some intangible benefits have real financial costs. Beyond the items on your offer letter, employers fund premium tools, celebrations, training, office infrastructure, and swag. I’ve always thought it should be more obvious to employees that such investments come from the same pool as the year-end bonus. When employees petition for these benefits, that money isn’t magically fabricated — it’s subtracted from what’s left over at the end of the year. If the company spends more on benefits or intangibles now, the bonus pool shrinks later, albeit disproportionately for owners, whose bonuses are larger. Understanding this trade-off helps both sides prioritize investments that actually move the needle.

If I can’t pay you more but want to, I’ll try to highlight other things that provide you with additional intangible benefits, such as the value of being part of the community, because I want you to join or stay. Another tool in the box is to pay you with variable compensation, in the hopes of having a better chance to retain you if we do well, but to limit my exposure to loss if we do poorly. I’ll try to design this so you’ll be paid more than your minimum if we do well, but less than my maximum if we do poorly. If you leave anyway, I’ll feel crappy for days, and I’ll blame myself for not being able to convince you to stay.

Intangibles can help make up for the perceived compensation deficit on either side of the base salary. Owners who are proud of what they’ve built will generally pay more for people who improve the value and health of their company, despite the salary range suggested by the market for that role. Conversely, employees who enjoy and appreciate their work culture and environment will generally accept less than what they could get on the open market, especially in the short term. Treating each other well thus improves the stability of the relationship, which is good for both parties.

Contractor envy

Employees often wonder if they’d earn more as a contractor. This is true on a per-hour basis, but the higher rate isn’t simply a premium; it’s hazard pay. What you receive in stability, community, and growth is what they’re trading away.

Contractors do their own sales work, assuming the risk of finding new work after every project. They don’t incur the cost of pensions, health benefits, payroll taxes, bonuses, performance reviews, or the time spent coaching and helping to guide their careers. And they suffer a direct loss of revenue due to work shortages, sick days, training, and vacations.

Contractors also often miss the deeper connections and huge social benefits of being “part of the family.” Many contractors view themselves as “hired guns,” offering specialized skills over a fixed time frame to the highest bidder. They fulfil their commitments so that they can get paid and tip out the door. Both sides understand the deal.

A choice of full-time employment states a simple preference for community and predictability. Don’t confuse an hourly rate with a relationship.

The empty room

Take a walk outside myself
In some exotic land
Greet a passing stranger
Feel the strength in his hand
Feel the world expand

-Hand Over Fist, Lyrics by Neil Peart, 1989

Even with a stranger, a handshake can be a poignant moment of connection. This Neil Peart lyric captures the essence of that human interaction. We feel an expansive energy, piercing through our own margins into the unlimited.

Remote work created the empty room, both literally and metaphorically. It has really put a negative dent in how we experience and express our work relationships, slashing our intangibles in the process. In my view, this transition has ruined company culture in many ways. Some examples:

• young people don’t get coached and mentored

• employees don’t develop an implicit understanding of how to be valuable, which they’d normally get through regular light-touch professional interaction

• owners no longer feel the social value of interactions within their companies, and thus don’t spend as much time designing for good culture

• employees don’t experience this value directly either, and are less focused on participating in the culture

• remote work chips away at our patience with one another, in the same way that a thin piece of glass separating two drivers induces road rage as a valid response to a minor traffic transgression

• in aggregate, we care less about each other, because we simply don’t interact in person

Remote work also introduces greater instability in the employer/employee relationship, as the lost intangibles no longer provide the salary “buffer” they once did. The compensation equation can more easily become unbalanced, resulting in more frequent layoffs and resignations.

One of the in-office rituals I really enjoyed was handing out bonus cheques. For me, it was a poignant moment of celebration. It meant we did something valuable together, and we now got to share in the spoils. I got to say “thank you” and shake your hand for working so hard. I felt like a benefactor. I also received my bonus cheque, which I was just as delighted to receive! One of my partners would sign my cheque, and I would sign his. We’d also shake hands.

This simple ritual strengthened the bonds of our community, which was one of the primary reasons I invested my heart and soul in building a company in the first place. With remote work, it has completely disappeared, alongside many others. Financial recognition has obvious value, but the older I get, the more important the community reason becomes, relative to the bonus reason. If you last long enough on this planet, it eventually becomes the only reason.

Care and service

You may take this with a grain of salt, but my partners and I cared deeply for our employees, and always sought to make this clear wherever we could. We linked bonuses to company performance to strap ourselves to the same mast. We spent large sums on celebrations and social events, understanding that a little appreciation goes a long way. And we provided work time flexibility, trusting that people would weave work into their lives in ways that were optimal for them. Each year we acted on suggestions from staff about how the company could be improved, which resulted in office improvements, longer vacations, overtime pay, and pension matching.

Whenever a valued employee left the company, it really stung. Their value to the organization would disappear, but I would also experience a much more visceral loss. Managing your career is a struggle, and of course everyone has the right to make decisions that are best for them. Emotionally, though, sometimes it could feel like a rejection of our efforts to show them that we cared.

In ruminating on the loss of a valued staff member and feeling sorry for myself, I once asked a trusted employee, “What do you expect from the company for agreeing to continue working here, and what should I expect from you for hiring you and continuing to employ you?” He responded, “Just pay me my salary, and you can expect me to put in my hours.”

Picking up my jaw from the floor, I implored him to repeat himself with further context, which he did. It turns out there was a vast chasm between what he and I thought we owed each other, with his expectation being more transactional. He was quick to add some of the things he appreciated about working at Jonah, but didn’t necessarily expect.

The gap may be partially generational. There used to be a notion in the zeitgeist that our companies should “care about us” if we’ve “served them for years.” Let’s ignore for the moment that “care” and “service” are sufficiently abstract as to make them less-than-useful concepts with which to understand each other’s expectations. The big lesson here for me was that we should expect mental models of “what is owed” to diverge widely.

In a bygone era, the relationship between employee service and employer care may have been more concrete, implicit, and understood by both parties. I still see news stories about tearful employees after a mass layoff, who relate feelings of betrayal over the abrupt ending of the relationship after “so many years of service.” It’s heartbreaking, but also flies in the face of my trusted colleague’s expectations.

For better or worse, these concepts are no longer implicitly baked into our working arrangements, nor are they anywhere to be found in our employment agreements.

In recent decades, both employees and employers have drifted more toward explicit self-interest, with both sides regularly electing to sever the relationship when it no longer suits. The chicken-and-egg question of which came first doesn’t matter anymore: the era of gold watch retirement parties is dead, and in the large, both parties played a role in killing it. “Job-hopping to get ahead” and “layoffs to streamline costs” can both be viewed as either necessary or opportunistic.

Photo by Nicolás Pinilla on Unsplash

We should realize that companies are motivated to keep people stably employed for at least the simple financial reason that they can amortize the hiring, training, and acclimation costs over a longer period of time. It’s true that some companies don’t value the intangibles, like the long-term cultural benefits of long-standing employees, but when they make layoff decisions that discount them, it becomes their loss as well.

“Care” arises from an appreciation of the intangibles offered by either side of the relationship over the long term. I still believe this appreciation can be intuitively felt and acted upon, as ethereal and unexpressed as it may be.

Not only are they difficult to quantify, however, but it can feel somewhat gauche for either side to trade on them in a compensation context. What should we do about this?

The unselfish edge

In any negotiation, most people focus exclusively on the value they can extract from a transaction, as opposed to the value they can offer their counterparty. I used to be like this, assuming that both parties would be responsible for representing their own needs.

However, exclusive attention to your side of the ledger without also considering what the other party might gain is a mistake. It emerges from a scarcity mindset — a baseline internal “program” that assumes that we must grasp after scarce resources (in this case, money) to improve our lot. Both candidates and employers can suffer from this. Indeed, it’s emblematic of the IKEA bandit’s thinking.

A scarcity mindset doesn’t just narrow the deal; it narrows the relationship. When you enter a negotiation focused on extraction, you signal that it’s a zero-sum game. The other party can feel that, and they respond in kind. You start working at the company, instead of with it.

Growth stalls because both sides start protecting themselves instead of investing in each other. The employee stops proposing ideas that might make the company richer but don’t benefit them directly. The owner stops funding training or stretch assignments because they’ve decided the employee is a cost to control. Discretionary effort — the extra mile that drives innovation — evaporates.

Trust erodes because every interaction becomes a transaction. A culture budget gets cut. Annual reviews become battles instead of calibrations. Bonuses become negotiations instead of celebrations. Small betrayals don’t dissipate; they accumulate.

Eventually, the organization becomes a collection of individuals guarding their own interests. No one takes risks. No one shares information. No one commits beyond the contract. And when the next downturn comes, there’s no reservoir of goodwill to draw on. You’re all strangers at the same table.

The “law of attraction” has no mystical basis; it simply works because you notice and gravitate toward the things your mind is already focused on. I didn’t really see baby strollers until my wife and I had a kid. Then they were everywhere.

Photo by Phillip Flores on Unsplash

If you negotiate from scarcity, expect your counterpart to do the same. A scarcity mindset expects and attracts those with the same mindset on the other side of the transaction. You may even land a job, but shouldn’t be surprised if you end up working in a transactional, adversarial, “every man for himself” culture. At the very least, over-indexing on salary is off-putting, especially early in the conversation. Everyone knows that a number needs to be set, but you’re signaling (perhaps unintentionally) that this is all you care about.

Consider the reframe from the beginning of this article: both parties win, or they both lose. Think about the benefit your future employer would get from hiring you. This opens a thread that is more likely to lead to openness, intrigue, and reciprocity in the hiring manager. Some good questions in this vein might be “How would you define excellence in this role? What’s really impressive to you?” Or “If I’m hired, I also hope to be able to contribute to the company community and culture. Beyond the baseline expectations for this job, how else would you hope that employees contribute to the company at large?” You’re not fishing — you’re showing you care about getting this right. That signals investment beyond your paycheck.

Owners practice the unselfish edge by naming what they’re offering beyond salary, before the candidate asks. Volunteering information about bonus structures, culture investment, and the potential for equity all signal that you see the relationship as more than a cost line. Candidates feel that, and are more likely to respond with the same openness.

One approach here is to ask your prospective employer, in the abstract, what process they use to integrate the intangible value provided by their employees into compensation. Even if they can’t quantify, listen closely for a reasoned response. I’ll admit I’ve never heard this question in my entire career, but I’d have been impressed if I had, especially since I had a good answer for it.

The answer should paint a picture of how care and service are related in the employer’s mind, which might generate some trust that they will try to value them in real terms when the time comes. It also begins to set shared expectations appropriately. It will be obvious if they haven’t thought about this at all, telling you that you’ll likely be exchanging salary for time.

After the handshake

Compensation starts with a guess. Two strangers estimate each other’s worth before either has seen a day of actual work. That number matters, but it’s not the whole show.

The real work happens after the contract is signed. Intangibles (stability, community, growth, mentorship) become the buffer that lets both sides invest in long-term value rather than fighting over small salary discrepancies. When employers name these explicitly, and employees recognize that value, the relationship stops being transactional and becomes mutual.

The unselfish edge isn’t about altruism. It’s about recognizing that your counterparty’s success is tied to yours. Ask what hidden benefits your employer gains from hiring you. Name what you’re offering beyond the job description. Employers who do the same, volunteering information about bonus structures, investing in culture, and compensating for intangibles, are building the trust that makes money conversations easier over time.

Here’s how to move forward:

• Know your minimum before negotiating; accept anything above it without resentment, then stop obsessing.

• Inventory your contributions — culture impact, client relationships, and stretch assignments — and bring them to compensation discussions.

• Frame negotiations around shared gain, not extraction. Ask “How do you define excellence in this role?”

• Weigh the full package: salary, bonus, culture, stability, and growth. Don’t optimize for base alone.

• Understand the trade-offs. Salary increases, culture investments, and bonuses all draw from the same pool. What’s spent now is subtracted from what’s left later.

Replace “am I getting enough?” with “is the total exchange balanced?” That’s where trust lives.

Part IV will unpack equity: the point where the reframe stops being a mindset and becomes a contract.

Next in this series: Part IV — Betting on Each Other

Text written and spoken by Jeremy Chan — a human being!

Voiceover Music generated by Suno

Podcast Music from #Uppbeat

https://uppbeat.io/t/soundroll

License code: