Shawnee Love   •  
October 23, 2014

I commonly get asked how to prevent employees from talking about their compensation.

In my opinion, that sentiment is futile. The more you try to keep pay secret, the more your people will think you are hiding something and want to talk about pay even more.

However, there is something you can do.

Do a good job of explaining your compensation program!

That’s it, but if that was easy, we would all probably be doing it.  Before you can explain your compensation program, you need to understand it yourself.  And once you understand it, you must be able to clearly explain i.e., defend it.

Hint:  If you can explain it to a teenager, you are ready to explain it to your staff.  I am not implying that your staff are equivalent to teens.  However, teens have little experience with compensation at work, and you have to be really good to explain any topic to individuals with little knowledge or experience in that arena.  Teenagers are a good test case for that reason.

Once you are ready to explain it to your staff, there is one more huge step.  It is time to ensure that:

Everyone in your company is in alignment with your defined compensation program and there are good reasons for exceptions.

That means an organizational review and don’t be surprised when you find a few people with pay rates that are out of whack with your espoused program without good reason.  The “Right” wage at any given time is a moving target because:

• it is affected by many variables, and
• decisions on pay perpetuate over time.

As a result, even the most diligent company may find itself with a pay rate that is too high or too low after a few years of sound decision making on wages.  Don’t beat yourself up on the outliers, but do correct them before you go in front of your company and explain your compensation program and practices.

If you make the effort to go through these steps, you are ready to discuss compensation with your staff.  Call a meeting, present your program and be open to employee questions about it.  (I suggest you invite them to ask you personal questions in private to model confidentiality about individual wages.)  Do all of this and you will find that more employees start coming to you with their compensation questions instead of their colleagues.  While you won’t eliminate talk about wages, you have definitely reduced the angst and confusion which goes a long way towards making it a boring topic for your people around the water cooler.

Have you tried this approach? How did it work?