Talking About Money at Work, an HR Guide

Pay is a deeply personal issue for everyone. Dissatisfaction with pay can make a huge impact on employee engagement…and how likely they are to stay at your company. Employees can easily search for salary information online, or ask friends working at your competitors about their pay and benefits.  With so much (mis)information swirling around, you’re going to need a plan for the next time an employee asks to talk about their salary.

“What did you earn at your last job?”

While this question is OK in many states, it’s important to know that at least 11 states and 9 counties or cities have banned asking candidates about pay history including California, Oregon, New York (city, and other counties), and more. This question is getting scrutiny because of the widespread attention on the gender pay gap, with women earning about 82 cents for every dollar a male earns. Lawmakers believe that when a company decides how much to pay a candidate based on what they earned at their last job, rather than the value of their skills, it may perpetuate a gender pay disparity job after job. Not everyone agrees banning questions about prior pay will help, but it’s a growing trend so here are some things to keep in mind:

  • Ask “What salary do you hope to earn in this role?” instead;
  • Candidates can volunteer their own prior pay information, as long as you didn’t ask them for it in any way;
  • External recruiters have the same restrictions as employers, so if the firm you work with provides pay history be careful that they know the law in your state;
  • You should be ready to provide the pay range for posted positions to candidates;
  • Always acquaint yourself your specific city, county or state requirements on what you can and cannot ask.

“Why does that new hire make more money than me?”

The intense competition for talent drives starting salaries higher and higher.  You may find that new hires require more compensation than experienced employees who have been with your company longer. Pay disparities between new hires and existing employees need to be addressed before they become a problem. You’ll get this question most often from employees who participated in the interview process and may have overheard the pay range for the new job. Unfortunately, this question is often asked by your most loyal, and longest tenured employees.  Here are some tips to manage this conversation;

  • Don’t panic – The employee might be upset and that makes pay conversations especially uncomfortable. But they aren’t mad at you;
  • Help them understand – The talent market is extremely competitive and starting salaries have to attract the right talent to the company. But the company may have merit, market adjustment plans and incentive programs in place to reward the teams who are already here and that the company wants to keep all employees competitive;
  • Make them feel valued – Listen more than you talk; give them a space to share their frustrations…it might have nothing to do with pay after all;
  • Follow-up with their manager – Let them know the conversation happened; encourage them to address legitimate pay concerns legitimate through a market- based adjustment, a merit process, promotion or other compensation levers.

“Why do I make less money than my coworkers?”

Discussing pay is somewhat taboo, but in many states, it is a protected activity for employees. In reality, you can’t prevent employees from asking and sharing pay information with each other, so you do need to be prepared when these questions come up:

  • “I found my job on a salary survey online and I’m underpaid” – Many salary surveys online are “self-reported” and people reporting aren’t verified. This data isn’t very accurate, and best practice is to verify benchmark salary information with 3 legitimate surveys;
  • “My friend works at a competitor of ours and makes more money” – Total compensation is made up of a many factors such as; base pay, bonuses, incentive pay, benefits, even free food in the office. Be prepared to share your company’s pay philosophy and help the employee understand how your company determines total compensation pay.

“My manager promised me a raise this year.”

Undoubtedly HR plays a critical role in compensation, but it’s too big a job for HR alone. Managers and supervisors should be the first person employees go to with questions about their pay.  Managers need to understand what to say, and what not to say.

  • Teach managers how to defer employee questions they aren’t sure about by saying “that’s a great question, let me find out more and we’ll talk again next week.” It’s OK not to have every answer immediately, just be sure the follow up happens!
  • Make sure managers are prepared to explain when and why employee pay decisions are made, managers need to feel involved in pay decisions and empowered to discuss pay changes with their employees and not push responsibility for pay decisions back onto HR or upper management;
  • Give managers tools to help them with compensation discussions such as: a written compensation philosophy, pay ranges for the roles on their team, job descriptions, performance tools like individual development plans, etc.

Every conversation about pay with employees is a chance to create a sense of fairness and transparency with your pay practices. When it doubt, listen and help them feel heard; then address their pay concerns with their manager and discuss an action plan if you both agree one is needed.

Megan Coen – Vice President, HR Technology Consulting

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services

Leveraging Podcasts for Career Growth

An easy way for leaders to learn and to keep up with workplace trends in 2019 is through podcasts.  Most podcasts are free of charge, though donations are welcome.  They usually run an hour or less, making them easily digestible during a commute or a walk.  Below are a few podcasts we find interesting:

Ashley Milne-Tyte hosts The Broad Experience, focusing on the experiences of women in the workplace.  She covers a range of topics and offers sage guidance about managing your career and the impact decisions you make at work can have on your life and whole being.  Always encouraging women to strive for professional achievements, Milne-Tyne and her guests shine a light on some of the factors, internal and external, that can be limiting and offer strategies to address and overcome them.  Topics this year have included resilience, transparency, loyalty and negotiation.  These podcasts provide encouragement and mentoring from a host of seasoned professionals.

In author and speaker Mike Robbins’ podcast: Bring Your Whole Self to Work, Mike interviews interesting and influential business leaders who share insight about approaching work from a different perspective. One of his themes is embracing authenticity, and his podcast encourages the listener to gain specific insights and techniques for being sincere at work, finding courage and fulfillment in your career and ways to influence your teams along the same path.

Recently Robbins hosted a conversation with Patrick Lencioni, the author of bestselling book, The Five Dysfunctions of a Team. The two discuss the importance of team culture and how to cultivate a healthy team atmosphere in an organization.  Robbins engages quality guests and his style is that of a livelong learner who is always interested in improving his own work as well as supporting others in their professions.

Startup is a documentary podcast that offers insights into the entrepreneurial side of business.  Take a peek into the real world of startups addressing questions such as: should I seek venture capital; avoiding co-founder disagreements; or should we sign a lease?   It’s not all about apps or sushi delivery via drone; one recent set of episodes looked into what it’s like to start a new church in America.  For someone who loves documentaries, this is a fascinating look into one aspect of what’s going on in American business today.

Podcasts will keep you current and interesting while making a commute or household chores fly by. These short presentations can bring stimulating topics and career growth through workplace stories, strategies and motivational influencers – delivered right to your phone without having to go to a seminar or crack a book.

Amy Kelemen, SPHR – Sr. HR Consultant, Director of Professional Services

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services