What to do when your company pays more to candidate lower than your level?

I can totally understand how frustrating this can be for you. I had this happen to a really good friend of mine who joined a startup early on (taking a paycut to do so), and then eventually finding out that later hires were getting paid way more. Unfortunately, this is quite common.

But I strongly advise taking a step back and looking at this situation in a different light, and examine the facts and your assumptions.

Fact:

Your company pays a new hire, who is at lower level, with higher salary (or TC).

Assumptions:

Your company/HR disrespects you or thinks you are not good or thinks you deserve to be paid less for some reason. E.g. they are trying to offend you personally by paying you less ("Play you" in your own words).

This assumption likely doesn't reflect the reality.

The fact of the matter is that each salary contract is an independent negotiation. And negotiation is all about leverage, and how you use that leverage. It's likely somewhere along the process negotiation, you handled it sub-optimally, resulting in a lower pay. No company will ever pay you more than what you bargain for.

Now, this isn't all bad news. Here's a couple good news:

1. Your company was willing to pay a lower level person higher salary. This means they are in fact very capable of paying even higher salary for you. (You likely need to force them to do this with leverage, which we'll get to in a second.)
2. You might not very good at (1) getting leverage in negotiation (2) using that leverage. This is a thing you can improve on! Getting good at this skill will boost your future earnings manyfolds.

At this point, I would ask yourself a few question:

1. Do you like your job and your responsibilities?
2. Do you like the people you work with?
3. Are you learning?

Based of these questions, search deep down to see whether you still would like to stay here.

If yes, your goal is to renegotiate your pay. This can be hard, because right now, you don't have very much leverage. The only leverage you have is that you are going to quit without an alternative. Unless you have a tremendous relationship and/or the company will go down the drain the moment you, I don't think asking directly will do anything. It doesn't hurt to ask though, just keep your expectations in check.

To increase your leverage, you need to a find another company that is willing to pay you at a level you believe you deserve to get paid. Then you need to bring that offer back and ask for a raise. In the process of finding a team that's willing to pay you what you want be paid, you might decide that a new opportunity is better anyway.

Lastly, if there is anything you can do that will decrease your leverage in these negotiations, it's this thing you said you are doing:

Knowing this information, I avoid putting extra effort into the team.

Here's 2 reasons why:

1. You are taking out your own personal frustration on your teammates who depend on you and your effort, and who had nothing to do with your salary negotiation. When you need to find new offers for your leverage, someone will have be your references, some of whom might be on this team. Do you want references who loves working with you or those who don't?
2. You are senior engineer, and you probably know how important these people are to the organization. The more important you are to the company, the more leverage you have in forcing the company to do something you want, because it hurts more for the company to lose such important people. What you are doing is making yourself less important - how will that help you make a case that you deserve to be paid more?

Even if you are feeling vindictive, the best way to take revenge, is to become really really important and quitting at the top. I hope you don't go down the path of revenge though - it doesn't serve you. You can get easily get paid more by leaving and not hurt other people in the process.

Sucks to suck (jk). Here's some things I would tell myself if I were in your situation:

• Put my ego aside and ask what the junior did – it would be easy for me to feel jealous/envious of this other engineer, feel they are undeserving, even distant myself from that junior engineer out of jealousy.. but those feelings and actions do not help me in getting paid more. What would help me getting paid more is putting my ego aside and try to extract as much information from the junior engineer as possible as to what they did differently during their interview/negotiation process.
• Avoid putting extra effort into the team reflects my character – it's easy to 'justify' working with less effort in this kind of situation.. however, I am harming myself the most with this kind of attitude. I am reinforcing the behavior of 1) encounter stimulus, unfair situation 2) put less effort into what I'm doing due to unfairness. Continue this kind of behavior for 10-20 years... not pretty.