Shawnee Love   •  
October 11, 2014

Talking about what you are paid is a relatively new phenomenon.  In the past, that kind of information was barely shared amongst family members let alone the guy at the next desk. It was taboo. But Generation Y (aka The Millennials born after 1980 until early 2000’s) didn’t get the taboo memo and have been known to disclose and discuss pay with friends, colleagues and even their friends and followers on social media.

Employees talking about pay causes challenges for companies, particularly when employees don’t understand why someone next to them makes more. And as mentioned in our discussion on compensation for new hires, things can really go sideways if an employee finds out a new hire is earning a much higher wage than what she started at.  To be clear, the wage of the new hire may be right, but if it is perceived to be unfair by longstanding employees, you will have some explaining to do.

Before you take steps to explain, you have to understand it yourself and you must be confident that your pay practices are fair and consistent.

However, in my experience, few companies have a handle on how and why they pay people and how people got to the pay rates they have.  When digging into compensation practices it is common to find mistakes which were perpetuated over time that resulted in unfairness and inconsistency today.

If this is the case in your organization, begin by fixing the problems rather than trying to explain them, because you are damned either way if you tell your long standing employee that you have been paying her wrong. If the person is overpaid, she will not be happy to know she isn’t getting an increase for the next few years. If you tell an employee she is underpaid, she will expect you to fix it ASAP (whether you can afford the increase and even if it will mean minimal increases for colleagues) and she will be annoyed you have underpaid her in the past. (Can you see why pay is considered a dissatisfier in motivation theory?)

Can we help you get your compensation ready to explain to your team?