You may have had a team member come to you wondering why she was paid at the bottom end of the pay range, or another employee claiming she was underpaid. Suddenly, it seemed, no one was happy with their paychecks.
Welcome to the world of salary transparency. This isn’t necessarily a bad thing, as a culture of transparency greatly reduces the likelihood of quitting.
It’s important to understand that, as a front-line manager, you may not have the final say over how your employees are paid. However, if you are prepared and willing to have an open discussion about compensation, you can positively influence employees’ perceptions of your company, your job, and your compensation. The following discusses how the conversation can be guided to achieve the best possible outcome for each participant.
Eliminate conflict
This is relatively new territory for everyone. Your first instinct may be to quickly dismiss the employee’s request with a few sentences, such as: “This is not the time to discuss individual compensation. We will discuss compensation when we meet at the end of the year to discuss performance reviews.” Nor should it be dismissed. Responsibility, saying, “I’m not responsible for compensation.” Instead, stay calm and tell the other person, “I understand this is important to you. Let’s put a meeting on the calendar.” This approach will leave you Take the time to prepare for this important conversation.
self education
In the past, front-line managers did not have to care about the company’s philosophy and practices when determining employee compensation, rewards and benefits. This will no longer be the case with the new pay transparency laws, as you need to be credible when answering pay questions.
An organization’s overall compensation strategy is often determined by a combination of many factors, including the company’s financial health, industry, available workforce, and company size. You can talk to a member of the HR team about how compensation works in your organization so you can be prepared to answer questions about it. HR teams can also help you understand the laws that pertain to the positions they manage. For example, pay transparency laws in some states require employers with a minimum number of employees to list salary ranges, promotion and transfer opportunities for all job openings they post. In some other states, employers are only obliged to release the data if job applicants request it.
establish plantform
When discussing highly sensitive issues such as compensation, where the discussion takes place can play a big role in determining the other party’s response and can directly affect the outcome you want to achieve. If you work in an open office environment, it’s a good idea to book a conference room. If you plan to discuss compensation with remote employees, ask them to find a place to call that will protect their privacy.
ready to answer
By following the guidelines above, you’re ready for an important conversation, so what should you expect in a conversation? Here are some frequently asked questions and suggested answers:
How is my compensation determined? The position has a salary range determined by factors such as skills, level of experience required, title and location (if applicable). Your compensation will depend on the position you were hired for, your education and the value your experience brings.
Why do I not earn as much as my colleagues? Direct comparisons of pay are not always accurate because employees perform differently with different skills and education levels. If you want, we can discuss how to improve your earning potential.
Why do new hires earn more than me? There are many factors that determine compensation, including education, experience and skill level. Please tell me more about your background. If there’s something we’ve overlooked earlier, I’m happy to discuss it with my boss and HR.
What does salary range mean? How does the company determine where my compensation falls on this range? A salary range is the range between the minimum and maximum base salary an organization is willing to pay for a particular job or group of jobs. Your salary position depends on a variety of factors, including supply and demand, your experience and education, and sometimes location, company budget and required skill set.
How does the company determine if my compensation is competitive? What should I do if it is found not to be competitive? We monitor compensation practices in a number of ways, including participating in compensation surveys to ensure we are in line with the market. Where necessary we make market adjustments based on individual circumstances. (Note, before communicating with employees, you must confirm with the HR department and confirm the company’s situation.)
correct expectations
Talking about salary and the value an individual brings to an organization is not easy. But having an open and honest conversation about this can help employees trust managers and even help managers identify opportunities for employee growth. This sets the stage not only for a one-on-one conversation, but for an ongoing one. Related dialogue should continue. Encourage employees to take a moment to reflect on the conversation and to conduct their own research. Make sure to schedule a follow-up meeting to discuss any unresolved issues. Finally, remember that having additional questions is a good thing, because it shows that employees share your desire to solve problems.
By Roberta Matuson | Text
Roberta Matuson is the president of Matuson Consulting and LinkedIn Top Voice in Leadership and Workplace. For more than 25 years, she has helped leaders of well-known companies including General Motors, Takeda Pharmaceuticals, and Microsoft achieve rapid leadership growth and achieve market-leading positions through talent maximization strategies. She is the author of six books, including the most recent Can We Talk? Seven Principles for Managing Difficult Conversations at Work, Evergreen Talent and the global bestseller Book “Suddenly In Charge”.
Chen Zhan | Translated by Liu Jun | Xiao Sun Yan | Edited
This article is from the WeChat public account “Harvard Business Review” (ID: hbrchinese) , author: HBR-China, 36氪 authorized to publish.
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