Complaints about pay: how to handle wage concerns

Whether it’s office gossip at the water cooler or misleading information on the web, your employee thinks they’re being short-changed. So what do you do? We’ve put together a step-by-step guide to help you handle the situation like a pro.

Salary is an incredibly emotive topic in the workplace, and as soon as someone thinks they’re being underpaid, they’re likely to make a beeline for their manager. If that manager happens to be you, knowing how to spring into action will prevent the issue from escalating. Word spreads quickly in business, so it’s important to address instances of pay-related-disgruntlement as efficiently as possible. Regardless of whether your efforts result in a pay rise, they need to follow some tried-and-tested methods.

Causes for concern

Let’s start by looking at two of the most common ways employees conclude they’re underpaid.

Online: A web of misinformation

We now live in an online world where salary information is never far from our grasp. Wage comparison sites, job listings and discussions on social media can all lead someone to feel they’re not paid enough. A common mistake here is assuming a statistic relating to the median wage for their job role directly relates to their position within a company. Median wage statistics can be misleading because they don’t refer to averages and don’t take tenure into account.

If a new starter finds online data suggesting they’re paid below average, it’s important to note that these figures likely don’t reflect starting salaries.

Co-workers: The latest at the rumour mill

Water cooler discussions and group chats can fuel wage discontent, and it only takes one revelation for all hell to break loose. Despite the frustration, the Equality Act 2010 protects employees’ right to discuss salaries. Employers are prohibited from imposing clauses or policies that block salary disclosure, and it’s unlawful to hinder discussion for gender pay equality.

Common reasons for pay discrepancies

As the manager or HR professional, you may be able to take the heat out of the situation by offering justifiable reasons for any discrepancies in pay. After all, in the heat of the moment, people are unlikely to take the following into account:

• Responsibilities. Despite having the same position within the company, certain employees might have been given responsibilities above and beyond their colleagues.
• Tenure. It isn’t unusual at all for people who have been with the company longer to receive a larger pay-packet due to incremental increases over the years.
• Knowledge and experience. With long tenure comes increased experience and job knowledge, which is commonly rewarded with larger pay or bonuses.

Seven steps to handle wage concerns

Despite your best efforts to highlight any genuine reasons for pay discrepancies, the above tactics might not be enough. Once someone has declared themselves underpaid, it often requires a significant HR effort to bring them back on side and resolve any ill-feeling.

Here are seven ways you can try and restore the peace.

1. Gather the facts
   Take a step back, gather the facts and do some market research of your own. Who have they spoken to? How has their career and wage progressed thus far? Speak to everyone who can give you an insight. A hunt through the job sites and discussions with industry partners regarding their wage structure will provide you with invaluable information.
2. Speak to the necessary people about the salary budget.
   If you’re not in charge of the salary budget, it’s time to speak to those who are. That might mean approaching the board of directors or head of HR but do so confidently – you need to get an idea of how flexible the budget is, should you deem a pay rise appropriate.
3. Meet in private with the unhappy employee.
   It’s time to get the lowdown from the person in question. Arrange to meet with them in private and hear their side. Start by letting them talk, listen intently, and make detailed notes. You’ll now have a good idea of how the wage structure’s formed so be honest and tell them exactly how it is – smoke and mirrors will only make things worse.
4. Explore further – is there anything else wrong?
   Sometimes, complaints about wages can point to deeper issues. A personal problem or fractious relationship with another employee might be the reason. Be brave and ask what’s really going on – you might be surprised.
5. Follow up.
   Every employee meeting should end with a promise on your behalf to follow-up. That might mean a pay rise, or it could just be to reaffirm the facts and confirm that the business believes they are correctly recompensed for their contribution. Set a date there and then for a follow-up meeting with the employee.
6. Review your research – are they right?
   Remember – the employee may well have stumbled upon an unfair wage discrepancy. Businesses make mistakes, so if something’s gone wrong within the wage structure, it’s important to swiftly put it right. Check your research again and combine it with what you’ve learned from the employee. Do they have a point?
7. Hold the follow-up meeting and outline the plan.
   Attend the follow-up meeting armed with a plan – outline it honestly and avoid skirting around tricky issues. If you conclude the don’t warrant a pay rise, point out clearly why.
   Explain that there will be opportunities for increased pay in the future, providing the employee follows the path set out in front of them. Write up your notes following the meeting and deliver them to the employee as confirmation that the plan is now in action. Be sure you check-in with them regularly to assess how positively they’re approaching the challenge and find out whether there’s any lingering concerns.

Summary

Providing you’ve followed our guide and treated the concern with the respect it deserves, you won’t have burned any bridges. On the contrary, the employee should be fired up and willing to show you what they’re made of. Discussions regarding pay discrepancies will always demand significant amounts of management and HR time, but follow the guidance set out above, and you should be able to avoid the subject of salary causing significant problems for the business.