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 to equip your managers with the tools they need to navigate these conversations successfully.
Here are five things you can teach your managers to prepare them to talk pay:
1. 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 teach some managers is that it’s okay for employees to ask for more money. (Even if a manager is 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 have put a lot of work into obtaining budget for increases or they’ve gone to bat to award a higher raise or a promotion. They may have even delayed hiring or forfeited a pay raise of their own to distribute it among their team.
These managers probably need a reminder that their team is not 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 know of any managers 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 is not getting the information they need or the manager feels they can’t answer the employee’s questions. Train your managers to prepare (as best as possible) for that discussion by providing as much information as you can about the following factors:
o The market strategy, competitive set or target market percentile for pay for their roles
o The pay ranges for those jobs and how they were determined based on the market strategy and/or internal equity
o Each employee’s position in the pay range and/or their pay compared to market and how it was determined
o Potential for additional pay increases or promotions (how can this person earn more money?)
3. Listen more than you talk.
The 80/20 rule is cited often and it’s 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. Help your managers become stronger listeners — it’s an art that’s worth practicing, and it will benefit them in all kinds of situations.
Additionally, help your managers understand that if they 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 are still thinking about what they didn’t get to say.
4. Get curious.
There is a lot to be gained by training managers to “get curious” when it comes to tough compensation conversations. They 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 is 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.
Coach managers to avoid “why” questions; they can come across as accusatory. Instead lean towards phrases like “tell me more about that” or “what about this pay range feels inaccurate to you?”. Encourage managers to ask open-ended questions instead of yes or no questions.
5. Be ready to have a follow-up conversation.
There is 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. Empower your managers to call for a follow-up conversation, especially when there are outstanding questions or things to reflect on.
Where managers often feel ill-prepared for discussions about pay is when they feel a responsibility to have all the answers. It’s highly likely that a comp conversation will prompt questions that the manager doesn’t have the answers to off-hand, from what other positions in the company they are 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 question from an employee may prompt a manager 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. Show your managers how to recognize when a conversation has ceased being productive and is making them or their employee feel overly frustrated or psychologically unsafe. Let them know it’s not only okay, but even preferred that they take a step back and suggest a follow up or continuation of the conversation, maybe even with HR involved.
Training managers to talk about pay is a huge component of creating a comp culture that inspires engagement and performance. Get started with these five tips and let us know if you need help — training managers is one of our favorite things to do!
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What’s your biggest challenge when communicating compensation? We want to hear from you. Tell us your thoughts in the comments.
Nice summary of how to handle comp. conversations. I will probably use some of this as part of my kick off meetings with the management team before we roll out reviews and salary reviews.