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What Can You Do If Employees Are Discussing Their Pay?
November 18, 2019
What Can You Do If Employees Are Discussing Their Pay?

Let’s face it. People will talk money whether it is discouraged or not.  Feelings of jealousy may take hold, and employees may draw false conclusions about why the numbers line up the way they do. Not all employees will calmly rationalize that varying levels of experience or skill sets — or job performance, training, industry experience and tenure with a company — are all factors in an employee’s salary.

What can you do to mitigate the concerns that individuals will have upon hearing how they may or may not compare to their co-workers?

Ensuring there is a culture of open, continuous feedback about performance, job objectives and personal goals will guide an employee’s understanding of what affects their pay.

Provide Open Communication Surrounding Compensation

Rather than sharing individual salaries of all employees, talking points for conversations could include the following:

  • Explaining the salary range for the employee’s current position
  • Outlining the maximum earning potential in the position
  • Explaining key performance indicators for the minimum, midpoint and maximum of the salary ranges
  • Outline specific objectives that an employee can do in order to have a salary increase or be promoted

Employees want to feel as though they are paid fairly for the work they do. Since they may be discussing salaries anyway, helping them understand what affects their pay should help them better understand.

Pay people fairly in the first place

By setting up your own compensation plan, you should be able to see whether your compensation is based upon the right factors.

Firstly, review your compensation and make sure your salaries are competitive. You may also choose to conduct internal surveys that monitor your company’s general climate, employee engagement and compensation perception to ensure these are being perceived correctly.

When you have new employees join, it should be easy to determine their salary based on a number of factors, not just opinion or previous salary.

Have a Compensation Strategy

Ensure you have a compensation strategy to be able to provide a clear framework for how pay decisions are made. Your compensation system should include alignment of company policies, job descriptions as well as standards within the industry.

Pay equity is incredibly important and so by being more transparent with how compensation works in your organization will help eliminate inequality.

Once you determine how and what you’re going to pay employees for specific work, that information should be documented and used by hiring managers. While you want to empower them to be involved in salary decisions, those decisions should be made in line with the compensation strategy. If the salary for a particular employee will move away from your policy, you should clearly document the reasons for the exception.

Compensation can be a challenging topic and it is recommended to have your compensation strategy reviewed to ensure that you are paying employees fairly. Contact Essential HR today to discuss what we can do for you.

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