An employee brings a salary report to their manager and says, “According to this, I should be making $10K more.” How to proceed? A few things to note first:
- There’s a lot of conflicting information online. Not all data sources are created equally.
- Much of the online salary info is packaged for business use and has a compensation strategy applied to it. It’s typically not intended to be a reference for employees.
- Absent the compensation strategy (and the objectivity that an employer would have), the employee may choose entirely incorrect parameters for pricing themselves.
Where to Start
The employee obviously has concerns about their pay, so have managers start the conversation by expressing appreciation for the employee’s contributions and then move right into explaining the company position. That position: We’ve done a salary study and have an established compensation strategy, and that’s how your pay was determined.
Depending on transparency level, the manager can/should give more details on the company compensation plan, and then wrap up on a positive note focused on the future. What can they do to be eligible for an increase next time around? What can they do to move to the next level or job in their job family? And so on.
Get Specific: Use Data
It’s so important for those talking about comp to bring their own data to the conversation. When employees see that the company is taking a disciplined, scientific, data-driven approach to compensation, they will respect the process. It’s when decision-making is ambiguous that employees reach the wrong emotional conclusions.
Having rich, well-organized data that you can present to both employees and managers is really critical in helping them have confidence that you’re paying attention, that you care and that there’s more to it than just random attribution of a figure.
An employee report is an especially helpful piece of data for comp conversations.
An employee report can cover:
- Company compensation philosophy
- Range, position in range and range penetration
- Wage trends
- Market data
- Pay percentiles
- Total comp (things other than salary)
These are all great springboards for discussion.
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