As a manager, I was always conscious of making sure that our compensation standards were fair and that we were rewarding good work. But one person challenged me, saying that she thought everyone who did the same work should be paid the same salary and that merit increases were unfair. As pay transparency laws continue gaining traction across the United States, managers are increasingly finding themselves in difficult discussions about compensation. Managers need to be well-prepared to handle these sensitive conversations with employees more openly, discussing their pay and questioning their place within the pay scale.
With states like California and Washington implementing pay transparency laws, a substantial portion of the U.S. workforce is now covered under regulations that mandate more openness about pay. This has led to a rise in conversations among employees about their salaries, with many questioning why their compensation may be on the lower end of the scale or why there are disparities between their pay and that of their colleagues.
While these discussions can be uncomfortable for some managers, they also present an opportunity. When handled well, they can lead to a more transparent and trusting workplace culture, reducing turnover and increasing employee satisfaction.
As a manager, it’s iimportant to approach these conversations with preparation and empathy.
- Don’t Be Defensive
It’s natural to feel defensive when an employee questions their pay, but it’s important to approach the situation with an open mind. Instead of dismissing their concerns or deflecting responsibility, acknowledge the importance of the issue and set aside time to discuss it. This shows that you take their concerns seriously and are willing to engage in an honest conversation. - Educate Yourself
In the past, understanding the intricacies of pay structures might not have been a priority for front-line managers. However, with the advent of pay transparency laws, it’s more important than ever to be knowledgeable about your organization’s compensation strategy. This includes understanding how pay ranges are determined, the factors that influence pay decisions, and the legal requirements that may apply in your jurisdiction. By educating yourself, you can provide credible and informed responses to your employees’ questions. - Set the Stage for Success
The environment in which you discuss pay can significantly impact the outcome of the conversation. For sensitive topics like compensation, privacy is key. Ensure that you’re meeting in a private setting where the employee feels comfortable and secure. If the conversation is with a remote worker, ask them to join the call from a location where they won’t be disturbed.
Addressing Common Questions
When discussing pay, employees often have specific questions. Here are some common concerns and how you might address them:
- How is my pay determined?
“Your pay is determined based on a salary range for your position, which takes into account factors like required skills, experience, title, and location. The compensation you receive reflects the position you were hired for, as well as the education and experience you bring to the role. In addition, we also like to reward outstanding performance. That is why we do annual performance evaluations.” - Why don’t I make as much as my colleagues?
“Pay comparisons can be tricky because employees are hired with varying levels of skill and education and may perform at different levels. If you’re interested, we can explore ways to increase your earning potential within the company.” - Why are recent hires making more money than me?
“Several factors, including education, experience, and skills, play a role in determining pay. Let’s review your background together to ensure we’ve considered all relevant factors. If there’s something we’ve missed, I’m happy to discuss it further with HR.” - What is meant by a salary range, and how does the company decide where my pay fits into this range?
“A salary range is the range between the minimum and maximum base salary the organization is willing to pay for a specific job. Your position within that range is influenced by factors like supply and demand, your experience and education, the company’s budget, and in-demand skills.”
Discussing pay equity is not a one-time event but an ongoing conversation. Encourage your employees to reflect on your discussion, conduct their own research, and bring any further questions to your attention. Schedule follow-up meetings to address unresolved issues and remain open to additional inquiries. This continued dialogue helps build trust and shows that you are committed to fairness and transparency.
Nearly everyone thinks they are underpaid. Managers must ensure that salary decisions are not made on a whim and that thought goes into them. Letting employees know how the process works may only make some happy, but your transparency can help.
Dave Edwards Media 