Ask any manager which task fills them with the most dread, and it’s likely to be that of addressing an employees’ complaints about their pay.
The reason is simple. Salary is an incredibly emotive topic in the workplace, and as soon as someone thinks they’re being underpaid, they’re likely to make a beeline for their manager. If that manager happens to be you, knowing how to deal with such encounters will ensure the issue doesn’t become any more significant than it needs to be.
Word spreads quickly in businesses, therefore it’s important that you address instances of employee disgruntlement related to pay as quickly and efficiently as possible. Regardless of whether or not your efforts result in a rise, they need to follow some tried-and-tested methods.
Firstly, let’s consider the most common ways employees come to the conclusion that they’re being underpaid.
They find out online
We now live in a world where salary information is never far from one’s grasp online. Wage comparison websites, job listings and discussions on social networks such as LinkedIn and Facebook are all capable of bringing someone to the conclusion that they’re not paid enough.
This is particularly troublesome because if the internet is famed for one thing, it is a difference of opinion and questionable sources of facts. For example, a common mistake made by many is to assume that a stat relating to the median wage for their job role is directly relatable to their position within a company.
Median wage statistics can be incredibly misleading because they don’t refer to averages. Typically, they represent the point at which half of the employees earn more and half earn less and are therefore an indication of wages that can be earned once someone is well into a career.
If a new starter finds information online relating to their job role that appears to indicate they’re paid below average, it might be worth pointing out that the figures they’re looking at are unlikely to represent starting salaries.
They learn from coworkers
Many people will keep their exact wages close to their chests. In the UK in particular, talking about how much you’re paid can be seen as highly inappropriate – arrogant, even.
Others will take great pride in providing an insight into their earnings. Water cooler discussions or group email replies are sometimes the perfect breeding ground for discontent over wages, and it only takes one revelation of a salary that is higher than the rest for all hell to break loose.
As the manager or HR professional, you can fan the flames by offering justifiable reasons for any discrepancies in pay. After all, in the heat of the moment, people are unlikely to take the following into account:
• Responsibilities. Despite having the same position within the company, certain employees might have been given responsibilities above and beyond their colleagues
• Tenure. It isn’t unusual at all for people who have been with the company longer to receive a larger pay-packet due to incremental increases over the years.
• Knowledge and experience. With long tenure comes increased experience and job knowledge, which is commonly rewarded with larger pay or bonuses.
Dealing with employees who are unhappy with their pay
Despite your best efforts to highlight any genuine reasons for pay discrepancies, the above tactics might not be enough. Once someone has declared themselves underpaid, it often requires a significant HR effort to bring them back on side and resolve any ill-feeling.
We think there are ten ways you can do just that:
1. Gather the facts
It might be tempting to immediately take the employee to one side and outline how wrong they are about their wage, but it’s important to first take a step back and gather the facts.
Who have they spoken to? How has their career and wage progressed thus far? Speak to everyone who can give you an insight.
2. Gather market data
Chances are, the employee will be ahead of you on this, therefore you need to do some market research of your own.
As previously noted, it pays to be wary of information found online pertaining to wages, but a hunt through the job sites and – if appropriate – discussion with partners within the industry who could give you an insight into their wage structure will provide you with invaluable information for the employee meeting (see number 4).
3. Speak to those above you about the salary budget
If you’re not in charge of the salary budget, it’s time to speak to those who are.
That might mean approaching the board of directors or head of HR, but do so confidently – you need to get an idea of how flexible the budget is, should you deem a pay rise appropriate.
4. Meet in private with the unhappy employee
It’s time to get the lowdown from the person in question. Arrange to meet with them in private (off-site, if you feel that would benefit) and hear their side of the story.
Start by letting them talk – ask them to tell you exactly what the problem is regarding their salary. Listen, and make detailed notes.
5. Explain how the business arrived at their current wage
Having spoken to those in charge of the salary budget, you should now have a fairly solid idea of how the wage structure is formed. You should also know how the company arrived at their current wage.
Be honest and tell them exactly how it is – smoke and mirrors at this stage will only make things worse.
6. Explore further – is there anything else wrong?
Sometimes, complaints about wages can point to deeper issues. A personal problem or fractious relationship with another employee might be the real reason the employee in question is so unhappy.
Be brave and ask what’s really going on – you might be surprised.
7. Promise to follow-up
Every employee meeting should end with a promise on your behalf to follow-up. That might mean a pay rise, but, equally, it could just be to reaffirm the facts and confirm that the business believes they are correctly recompensed for their contribution.
Set a date there and then for a follow-up meeting with the employee.
8. Review your research – are they right?
Remember – the employee may well have stumbled upon an unfair wage discrepancy. Businesses make mistakes, therefore if something has gone wrong within the wage structure of the business, it’s important to put it right, swiftly.
Check your research again and combine it with what you’ve learned from the employee. Do they have a point?
9. Hold the follow-up meeting and outline the plan
By now, you should be able to attend the follow-up meeting armed with a plan.
Whatever that plan is – outline it honestly and avoid skirting around tricky issues. If the answer to the question “can I have a pay rise” is a solid “no”, point out clearly why, and explain that there will be opportunities for increased pay in the future, providing the employee follows the path set out in front of them.
Write up your notes following the meeting and deliver them to the employee as confirmation that the plan is now in action.
10. Check-in regularly with the employee thereafter
There’s no getting away from the fact that the above steps will take up a significant amount of time on your behalf. It can, therefore, be tempting to put it all down to experience and move on, and while you should certainly do that to a degree, it’s important to remember that the job isn’t quite finished.
In fact, it’s never finished, because the process that follows the last meeting is simply one of an employee continuing their journey. Providing you’ve followed our guide and treated the concern with the respect it deserves, you won’t have burned any bridges. On the contrary, the employee should be fired up and willing to show you what they’re made of.
Just make sure you check-in with them regularly to assess how positively they’re approaching the challenge and find out whether or not there are any lingering concerns.
Discussions over pay discrepancies will always demand significant amounts of management and HR time but follow the guidance in this post, and you’ll avoid the subject of salary causing significant problems for the business.