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What To Say About Pay?

Over the years that The Centre Group has conducted employee opinion surveys, pay is rarely one of the most favorable categories. In fact, if it is, it probably means a company is paying too much.

On the other hand, pay can be a source of discontent. In most cases, it is not the amount of pay that is the problem as much as a lack of understanding about or lack of confidence in the pay system. Why? Perhaps the company doesn’t have a pay system; they address pay matters one event at a time. Perhaps management is reluctant to say too much about the company’s pay system either because they don’t know or feel ill-equipped to answer any follow-up questions.

At times it’s true, companies don’t pay competitive salaries and the way employee pay is set is inequitable and irrational. That is not a great combination for building trust and employee commitment.

More often than not, many companies research market rates for comparable jobs and establish and follow policies to ensure internal pay equity and fairness. Even so, they may get low marks because employees are unaware of the efforts that are being made on their behalf. The story is not getting told.

What are the keys to effective communication about pay? Starting with the premise that a company wants to build trust and strengthen employee commitment, here are some questions about pay that all managers and employees should be able to answer:
  • How is my job rate or salary range determined?
  • How does the company keep my pay competitive with the market?
  • How does the company define “competitive” in the marketplace?
  • Will my rate of pay or salary range ever change? Why, or why not? How?
  • How can I earn more money?
  • How does my performance affect my pay?
  • What causes some jobs to be paid at a higher rate or in a higher salary range than others?
  • What impact will my longevity with the company or in my job have on my rate of pay?
  • What about cost-of-living?
  • How often will I receive a pay increase?
If you put this information out there for employee consumption and train your managers and supervisors to field pay-related questions, you won’t be put on the defensive if a valued employee comes to you with the news that she has been offered a huge pay increase to perform the same job somewhere else. When you have a solid, well-researched system in place, you can congratulate her for her good fortune and stay true to your compensation administration principles.

--Joel Myers, The Centre Group


Posted: 3/28/2012 10:00:00 AM | with 0 comments




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