Talking Pay

SUBJECT MATTER | Jul 14, 2017

One of the most important elements of any employer/employee relationship is the topic of pay. It’s often a key point of negotiation during hiring, but also something which remains of obvious interest throughout employment.

It’s important that both the employer and the employee understand the delicate balance on both sides of the desk: The employee is aware of and sensitive to happenings within the company that might affect compensation, while the employer finds a middle ground between rewarding hard work, but also keeping in mind the full array of factors that influence compensation.

Communicating to employees about compensation is one of the most sensitive and crucial aspects of a manager’s role within the workplace, so here are some tips about how to make sure that communication is easy, straightforward and, most importantly, satisfying for all parties involved.

Make sure there’s context for a pay increase: Simply giving an employee a raise, without any explanation, can be frustrating. Even if the reason is something as simple as a cost of living adjustment, don’t leave employees wondering about the nature of the raise, or whether this is a one-time bump. More specifics — about why and how the employee contributed to the company — can help the employee better understand the reasoning behind an increase in salary.

Arm yourself with information: Managers should enter any meetings, whether they are about pay-related matters or not, armed with as much pertinent information as possible. The more questions an employee can get answered in a timely manner, the more efficiently everyone’s time is being used. Providing managers with some talking points can help steer the conversation, anticipate any potential questions, and also ensure there is no confusion on either side of the table.

Offer performance improvement tips: Weaving in ideas or suggestions on how employees can maintain or even improve their performance should be a key ingredient in any conversation about compensation. While it may not be possible to be fully transparent with an employee — “If you do more of X, we can raise your base rate of pay by a factor of Y,” for example — a manager can certainly provide some helpful hints about what sort of initiative can be displayed going forward.

Keep it simple: There can be a tendency to get bogged down in what some describe as “HR speak” when discussing pay, but the conversation between manager and employee will be easier if plain English is used. As above, ensuring managers are entering these sensitive conversations with the appropriate information will likely cut down on a tendency to retreat behind legal-sounding language, which can only serve to confuse employees. When talking about dollars and cents, it’s best to keep things as simple and clear as possible — and that includes the language being used.

Don’t forget to frame pay within overall compensation package: It is easy for employees to forget, particularly in the midst of a conversation about pay, that a salary is only one part of an overall compensation package. Reinforcing perspective about the overall compensation offered can help employees better understand how their salary fits into the grand scheme of things, as well as helping them to understand how their salary is (or is not) competitive with other, similarly-sized companies in the same field. Since it is as easy as searching the internet to find data on pay in the 21st century, companies can only help themselves by being as transparent and comprehensive as is possible during these conversations with employees.

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