Improved Leadership. Competitive Advantage.

Few things can tear apart a team or organization faster than pay problems. Understandably, most leaders don't like to deal with pay issues since they often invite conflict, defensiveness, and hurt feelings. But, make no mistake, the pain is much worse by ignoring or waiting. Here are some guidelines in dealing with pay issues.

  • Be proactive and transparent. We know of one organization that sends the HR department around on 'town-halls' to cover 100% of the workforce. Their goal is to educate all personnel on the logic and procedures governing pay raises (or lack thereof). They do this annually before the annual bonus or pay raise is officially announced. Doing it before is always better than doing it after.
  • 24-hour rule. When a subordinate voices a pay issue, acknowledge it, preferably in person, within 24 hours. It shows that you care. When we ignore pay issues or 'kick them down the road', we send a signal that we don't care about the person. There are few things, by the way, more personal than a person's livelihood.
  • 72-hour rule. Once a pay issue is voiced, engage necessary stakeholders such as HR, to get an answer within 72 hours. Again, preferably, deliver the news face-to-face in a private setting within the recommended timeframe. Respect confidentiality. Even if the answer is not a desirable one for the employee, they are still owed an answer. Most people are conflict avoiding and despise, if not hate, these types of conversations. That being said, it is our leadership duty to do the difficult. This conversation must occur.

A compelling force behind union drives is not the amount of pay that employees receive or don't receive. Rather, it involves how pay is managed and communicated. Commit to transparency behind pay decisions. Most importantly, treat an employee's pay concerns like they are your concerns. Resolve them completely and immediately. Failing to do so will erode your culture.

To learn more about how you can manage pay better and how to deliver courageous pay decisions, call Robin Bichy, an ELP founder and principal, at 703.999.5676.