Published on June 1st, 2012 by Alan Sklover
Question: Dear Alan, I am being made an offer by another company for a Marketing Director role. The reason I am seriously considering taking this position is that the employer promised me that I will be likely to take the China President role if I perform well at the Marketing Director position.
I plan to ask that a clause be put into my offer letter to that effect that I will be promoted to the China President role in three years.
Have you ever seen this kind of thing happen based on your experience?
Answer: Dear Thomas: Yes, many times. I call them “Try Out” promises. Let me explain:
1. Often, an employer wants to “try out” the employee before giving him or her a position of considerable importance and/or trust. Quite often professional firms – such as law firms, accounting firms, and consulting firms – want to acquire a promising candidate, and intend to give them a position such as Partner, or Director, or President – but first want to “try out” the person in a less demanding, less critical role. This way, the employer can assess the candidate far better – even as to such subjective qualities as personal “chemistry” – before making a rather “permanent” appointment. In large corporations, too, a candidate for a CEO position who has never before been a CEO can be “tried out” as, for example, COO, before being given “the keys to the kingdom.” These are quite common.
Some people believe this is the exact same reason for an “engagement period” before actual “marriage” in personal relations.
2. Because employers in these circumstances seek a “try out” period before making a long-term or permanent commitment, they often decline requests for written commitments to promote, such as in offer letters. Your interest in taking the Marketing Director position is only because you are so interested in the President position, and so you want a written commitment. That makes total sense, and I salute you for your approach. It is the right approach to take, and you should make a respectful request for such a clause. However, in my experience, because many employers want a true chance to “try out” the candidate before making the firm commitment, most will not agree to such a firm commitment for the ultimate position in an offer letter or “Welcome Aboard” memo.
3. Beware of “Words of Intention.” As what may seem to you to be a compromise of sorts, your prospective employer may offer to insert into your offer letter a clause that says something like this: “If you do well as Marketing Director, IT IS OUR INTENTION to make you President within three years.” Beware of such “Words of Intention,” because while they may make you feel comfortable, or make you think you have an assurance, to my knowledge “words of intention” are not binding or enforceable in any legal system. It is the same thing regardless of the particular “Words of Intention” used, which may include “may,” “expect to,” “will likely,” “subject to,” or “our present plan.” Be very careful in your reading of words, phrases and even punctuation marks.
I have written an article on this exact subject entitled “In Hiring Memos, Offer Letters and Employment Agreements, Beware of Words of Intention.” To read it, just [ click here. ]
4. Usually, in negotiating this issue, the best a candidate in your situation can do is to ask for, and receive, an “Alternative Reward.” As I noted above, I agree that you should ask for a clause in your Offer Letter committing the employer to promoting you to President within three years. If you get that, great. As I also noted above, beware of “words of intention,” because they represent a false sense of security. Most commonly, the most effective source of real assurance is what I call an “alternative reward, such as the following:
“In the event, despite our present intentions, you are not promoted to President within three years of this date, for any reason (other than your committed a serious crime or offense), you will be entitled to then choose any of the following, at your discretion: (a) immediate promotion to Vice President, (b) appointment to the Board of Directors, (c) a lump-sum severance payment equal to two times your full annual compensation, or (d) two percent of the common stock of the company, immediately vested.”
Of course, these listed “alternative rewards” are merely illustrations; you can and should come up with your own.
By the way, in most countries, if a prospective groom breaks off an engagement with a prospective bride, the law says that the would-be bride may keep the engagement ring, just like an “alternative reward” for not getting the marriage promise fulfilled. Yes, that is true.
5. Alternative Rewards can serve both as “Risk Limiters” to employees and “Fulfillment Motivators” to employers. From the employee’s perspective, such “alternative rewards” at least make it more palatable – perhaps even pleasant – to be denied what you really want. From the employer’s perspective, such “alternative rewards” can serve to make employers think twice about not fulfilling an assurance, because it is so “expensive,” perhaps even “painful” not to do so.
Thomas, it is this mindful sort of “navigation and negotiation” that can make a career move such as the one you contemplate both more rewarding, and less risky, and that’s what business and careers are all about, no?.
Hope this is helpful to you. Thanks for writing in all the way from Bejing. We hope you’ll spread the word to your colleagues in China about the value of our blogsite.
My Very Best,
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© 2012 Alan L. Sklover, All Rights Reserved.