Tips for Talking About Compensation

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According to common wisdom, there are three things you should never talk about in public—religion, politics, and of course, money.

Unfortunately, the taboo against talking about money even extends to not-quite-public spaces, like the workplace. And that’s ironic, because most people assume employment to earn a living, and yet the standard rule is to avoid saying the “m” word at all costs! That’s why many employees find that asking for a raise is about as easy as doing a back handspring.

But employers aren’t immune from feeling discomfort when talking money on the job, either. Even HR professionals cringe at the thought of discussing compensation with employees, be they long-term employees or new hires. That’s because money can be a hot-button issue for some, causing emotional responses that wouldn’t typically be expressed.

Still, having “the talk” about compensation doesn’t have to turn into a whirlwind of chaos. Here are a few tips for easier conversations about compensation in the workplace.

Tip #1. Be prepared

If you’re worried about employees coming to you with wage questions, now is the time to realize this is part of the job. You can’t predict what employees will ask, but you can develop skills for providing them with good responses. Also, know what types of questions you’re authorized to answer and when it’s better to refer the employee to HR or more senior management. For example, what if this individual is a top candidate you’ve just offered a job, and he wants more money? Is it within the scope of your duties to negotiate with him?

Tip #2. Know your stuff

Know the market value of your employees’ jobs, and when they come to you with their salary data, you’ll be prepared with your own. PayScale’s compensation software can help you determine salary ranges or create an employee report when compensation questions come up.

Tip #3. Maintain a positive attitude

No matter what questions are thrown your way, avoid reacting with fear or defensiveness, which will only frustrate your employee and cause him to suspect you’re hiding something. Also know that it’s okay and perfectly good business practice to consult with your boss or HR before answering the employee. In any case, keep an open mind and reflect empathy during the interaction. What is your employee really trying to tell you? It could be that he or she has financial problems or concerns about wage inequalities in the office. Knowing your employee’s motives will help you give the best answers possible, and even if you can’t give the employee the answer she wants, you’ll have maintained her respect by putting genuine thought into your responses.

Tip #4. Ditch the clichés

It’s true. Your employees know when they’re being given the party line, and providing pat answers instead of thoughtful ones is lazy leadership. Also, when it comes to negotiating compensation, people tend to fixate on their salary only, so whatever you do, don’t try and console the employee by saying how “everyone” is feeling the pinch, or worse how you’d like to make more money, too! Keep in mind that offering creative perks is another great way to improve employee satisfaction when you can’t offer more money.

Tip # 5. Don’t try and be a “know it all”

Understand that employees, especially new employees, may not be aware of the benefits they’re entitled to under their total compensation package and may have lots of questions. If you don’t know the answers, by all means refer the employee to HR. Giving the wrong answer will only lead to more problems later.

Tip #6. Follow up

Again, it’s perfectly acceptable to not have all the answers, but be sure and get the answers and bring them back to your employee. And whatever your answer, be ready to stand by it. Chances are your employee will share your answers with other employees, so it’s important to be honest and consistent.

It’s not always easy talking about compensation, but if you heed these tips you’ll have a much easier time of it.

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