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Rank’s Invisible Impact

You have a constant surveillance system in your head that you aren’t even aware of. Moment-to-moment, you are assessing where you stand in relation to the people around you. This thought process plays out in team meetings (whether you speak up, challenge comments, or smile and nod with what’s said). It unfolds around you (colleagues have the same mechanism) every time there is a salary discussion with employees and bosses. We evaluate where we rank against others, maybe against people that aren’t even in the company. When change occurs, our reptile brains send out an alarm. We feel anxious, though the reason why is often below awareness. This older part of our brains is on the hunt for signs of threat, rejection, and status loss. The shift is subtle and often invisible.

Consider this study:

The majority of people state they would rather make $90,000 a year when their brother-in-law makes $70,000 than earning $120,000 a year when their relation makes $150,000. This is the kind of research finding that can make an economist crazy. It ties to the fact that satisfaction with life factors is never a fixed or factual thing, but instead a result of the basis of comparison. Who are you comparing yourself to? Those above you or those with less?

It’s echoed in studies of Olympic winners revealing that those receiving a silver medal are less happy than those who get a bronze prize. People coming in second see how closely they missed first place and downgrade their results. Those winning bronze know they nearly missed the podium altogether. They compare down and are grateful they won a spot at all. The silver medal is of course a higher award than the bronze, but study after study bears this out. (For instance, having blinded evaluators review the pictures of second-place and bronze winners and rate them on a continuum from unhappy and disappointed to thrilled. Consistently the third-place winners appear much more elated).

These findings point consistently to the fact that we humans are deciphering our rank every minute and deciding how well we are doing. We don’t evaluate the award (or pay or title) we have objectively, but instead how well we are doing compared to our designated peers.

Think of an employee in a lateral job move:

The pay is the same and the title untouched. After the job shift, he or she spirals and acts as if it was a demotion. Why?

Likely they perceived their status dropped. Maybe they used to be the tenured engineer in the group and now they are the middle of the pack. Perhaps they used to lead a team of ten and now they have no direct reports. Both tenure and span are rank symbols, as are technical expertise, product sexiness, role in a new venture versus legacy project, and organizational visibility. When one of these areas is impacted, engagement goes down—even when their title and pay are the same.

The way to plan for this is to evaluate the subjective changes that result from the change—whether or not they seem material to you as boss. We need to look well beyond compensation to things like reporting relationship (is there a new layer added between them and a top executive?), go-to status, institutional knowledge, office location, office size, turf, project importance, new peer-group talent, and favoritism within the new team. Viewed through this lens, “lateral” moves often have net loss, and the rank take-aways drive anxiety.

Sarah expands on this topic further in our video.

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