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Advice / Succeeding at Work / Management

What Good Managers Need to Know Before Talking Salary With Employees

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Conversations about pay can be tough—especially when they involve disagreement or confusion around pay, or the reasons for a pay decision, or the perception of pay inequity.

For these difficult discussions, it’s important that managers are equipped with the tools they need to navigate these conversations successfully.

Here are five things managers need to know to prepare them to talk pay:

1. Understand It’s Okay for an Employee to Ask for More Money

Many managers spend a lot of time trying to avoid situations where employees might ask for more money. This may or may not be subconscious—and I’ve been guilty of it myself. Overall, it seems to come from a place of wanting to avoid being asked for something you can’t provide.

Managers often put a lot of personal stake in being able to “provide for” or “take care of” their teams. While that mindset is a whole other topic, the truth is, the first thing you might need to know is that it’s okay for employees to ask for more money—even if you’re not in a place to give it.

On the other side of the spectrum, some managers get offended by this question when they know they’ve put a lot of work into obtaining budget for increases, or they’ve gone to bat to award a higher raise or promotion. They may have even delayed hiring or forfeited a pay raise of their own to distribute it among their team.

But you need to remember that your team isn’t necessarily aware of all this, and that’s okay. It’s not typically appropriate to lament to an employee about all the hard work you put in to get them an increase.

(Note: If you’re starting pay conversations with “If only you knew how hard I worked to get this for you,” nip that in the bud right away.)

2. Prepare to Explain the Decision-Making Behind an Employee’s Pay

When a compensation conversation “gets tough,” it’s often because an employee isn’t getting the information they need, or the manager feels they can’t answer the employee’s questions.

Be prepared (as best as possible) for that discussion by providing as much information as you can about the following factors:

  • The market strategy, competitive set, or target market percentile for pay for their roles
  • The pay ranges for those jobs and how they were determined based on the market strategy and/or internal equity
  • Each employee’s position in the pay range and/or their pay compared to market and how it was determined
  • Potential for additional pay increases or promotions (how can this person earn more money?)

3. Listen More Than You Talk

The 80/20 rule in conversations is an ‘“oldie but goodie” for a reason.

If a conversation about pay with an employee is “going south,” it’s oh-so-important to understand where the employee is coming from and what their concerns are, and to ensure they feel heard.

This means not rushing to judgment or defense if an employee is expressing concern or dissatisfaction with their salary or pay rate. Become a stronger listener—it’s an art that’s worth practicing, and it’ll benefit you in all kinds of situations.

Additionally, understand that if you interrupt an employee’s statement or question about their pay to defend or explain the decision, that employee is only half listening to that response. They’re distracted because they’re still thinking about what they didn’t get to say.

4. Get Curious

There’s a lot to be gained by learning as a manager to “get curious” when it comes to tough compensation conversations. You might be surprised or feel taken aback to see an employee expressing dissatisfaction about how their job is benchmarked, the range for their position, or their earning potential—and this is a great opportunity to dig into the employee’s perceptions of their pay.

Do they feel there’s a different or more accurate market benchmark for their role? If so, what is it? Are they of the opinion that they should be paid higher in their range due to tenure, performance, or experience? Open up a dialogue to understand their perspective.

Also, try to avoid “why” questions—they can come across as accusatory. Instead, lean toward phrases like, “Tell me more about that” or, “What about this pay range feels inaccurate to you?” Ask open-ended questions, instead of yes or no questions.

5. Be Ready to Have a Follow-up Conversation

There’s a reason this tip is last, and it’s because most tough pay conversations are going to need follow up.

More often than not, a tough talk about compensation results in questions that need answers or thoughts that need further consideration. Call for a follow-up conversation with your manager, especially when there are outstanding questions or things to reflect on.

Where we often feel ill-prepared for discussions about pay is when we feel a responsibility to have all the answers. It’s highly likely that a comp conversation will prompt questions that you don’t have the answers to off-hand—from what other positions in the company they’re eligible to apply for to what the pay range for other jobs in the department might be.

In some cases, the answer may be, “We don’t disclose that information.” In other scenarios, simply hearing the question from an employee may prompt you to do more research and share more compensation details with the whole team.

It’s also important to call for a follow-up if the discussion is getting heated. Recognize when a conversation has ceased being productive and is making you or your employee feel overly frustrated or psychologically unsafe. It’s okay, even preferred, to take a step back and suggest a continuation of the conversation, maybe even with HR involved.

Talking about pay is a huge component of creating a comp culture that inspires engagement and performance. Get started with these five tips!

This article was originally published on PayScale. It has been republished here with permission.