‘I am not paid fairly for my job.’ What should you do now?

It has happened to most of us – disgruntled, demotivated employees come up to us complaining that they are being paid below the average market rates.

They have asked around, read through online salary data and possibly also attended job interviews and/or received job offers. And, your reaction? Usually you are taken aback by the person/s bringing forth their complaint. So what’s the best approach to  handle these situations?

First of all, it is important to give space and time to the employee to speak out their concerns.  It is equally important that we listen and understand their arguments. Reacting out of instinct, in a defensive manner, will not help the situation.  Don’t react immediately and don’t trying to defend your position. As we listen, we need to try to understand where and what is causing all this – why is the employee unexpectedly feeling this way now? What has triggered this change? Is it just a salary issue or could it be that that there is more to it? It is also important that we ask the employee for more information that can help us understand more the situation and concerns.

Compensation is not likely to be a straight-forward discussion. You need to explain what the company’s compensation policy is (assuming the company has one in place). Explain what the company’s market position is,  and how it positions itself vis-à-vis the going market rates. You also need to be explain how and on what basis compensation decisions are taken. This should be done in a transparent manner. Adopting a secretive, half-truths approach will only create fear and possible resentment.

Avoid jumping to any conclusions.  You need to research and validate what you were told by the employee, before replying or committing.  If you do not have a compensation plan in place, then it is crucial to kick off the process. The market study should be done for all the different levels/jobs within the company. Through this process the company can confirm whether the salaries being paid to the different levels are in line with the current market rates or not. I will be talking more about this in the coming weeks. At this point, it must be emphasised that it is important that the process mentioned here above is not done just for the position pertaining to the employee that has steamed off his concerns. It should be carried out in tandem with other positions, as this exercise will help you better comprehend your overall pay posture in the market.

Compensation is a sensitive and personal issue affecting the individual and the company. So respecting one’s sensitivities is crucial, especially if we need to communicate that we cannot accede to the pay rise request. Don’t beat around the bush – be frank and direct. Explain why the request for a pay raise cannot be taken on. Treat the person with respect throughout the whole process and DO acknowledge and respect the employee’s courage in speaking out. Remember, there could also be other alternatives to pay increases that might be of interest to the employee (example, flexible hours).

Needless to say, you can never make everybody happy all the time. Some employees will fail to understand why the company cannot accede to their pay rise request, irrespective of all the explanations and your good intentions. Some people will quit for the better pay offered elsewhere. But also remember that the ones who understood you and have stayed on, are most likely the people who understand your company’s pay posture, who are committed to succeed and who take pride in what they do.

About the author

Maria Bartolo Zahra is Managing Director and HR Advisor at SurgeAdvisory. She has over fifteen years of human resources and business advisory experience.