Tips on Taking the Emotion Out of Pay Conversations

“Pay is personal.” It’s a mantra every manager in your organization should repeat when going into a pay conversation with an employee. There are aspects of pay that might be unrelated to work, and a manager should be prepared for anything. It’s exactly why being prepared with data and facts can turn pay conversations from emotional to meaningful.

At the core of this preparation is an accurate job description that evolves as the employee and the organization change. Let’s look at why this is so important — for total rewards (TR) professionals and organizational leaders — to reduce the friction in pay conversations and where the gaps might be.

Start From the Beginning

Sourcing candidates necessitates that organizations cast the net across career sites, social media and even specialty job boards. The pre-hire job postings used for this purpose are different from job descriptions. Often laden with buzzwords such as “fast-paced environment” or “competitive compensation,” these postings are part of the recruitment marketing process, written by people (perhaps even you) who may not actually know what the day-to-day demands of the job are. Best considered as a job advertisement, the actual work experience can be vastly different from what attracted the candidate in the first place.

Additionally, pay transparency laws require employers to disclose salary ranges in job postings or upon request. States with pay transparency laws include California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts (beginning Oct. 29), Minnesota, Nevada, New Jersey, New York, Rhode Island, Vermont and Washington, as well as the District of Columbia. These laws differ in scope, such as whether they apply to internal roles or external job postings (applicants, employees or both). This adds yet another level of complexity to the talent acquisition process.

Assuming the right candidate is onboarded, their understanding of their job is point-in-time. As the organization scales, reorganizes or goes through merger-and-acquisition activities, the role likely will change and the job may be valued differently. It is at this shifting point that, unless a cogent job description accompanies the employee on this journey, things can go awry.

Job Description Clarity Reduces Conflict

If you ask most employees — even after years with the organization — they will remember the job ad that attracted them to the organization, but not necessarily the job description afterward. In fact, post-hire, research shows only 36% of employees are clear about their actual job descriptions. Going back to our previous example of how change can change everything, the employee who started as an accounting manager in a small company might now be a staff accountant when the company becomes larger. The responsibilities of the job have changed, and the compensation changes accordingly.

As a vital communication tool for employees, the job description gives everyone the ability to understand roles and career paths within the context of the organization. Essential to engagement and retention, having a very clear understanding of what a job entails in the context of the organization’s personal pay philosophy can lay the foundation for more productive discussions. When a pay gap seems too big, employees and managers can brainstorm how to close it with other means of demonstrating value. The same job descriptions also serve as a basis for the tough pay conversations managers and employees will have, especially when the variance between what the market says a job is worth doesn’t align with what the employer will pay.

When the discussion starts off with “this is where we level that role,” managers can change a negative into a positive by pointing to the transferable skills that might put the employee on track for additional opportunities.

Redirect and Retain

The general impetus for pay transparency was to increase retention, engagement and productivity. While there will perpetually be competing priorities, getting pay right by having what’s needed to take the emotion out of pay conversations isn’t optional. Here are some questions to consider:

• Has your culture embraced mandated pay transparency or voluntary pay transparency? Will such transparency increase trust and retention across the workforce?
• When your organization’s employees have access to pay, does it inflate or deflate their expectations?
• Do managers understand the guidelines for how to conduct pay communications? Does it bridge or create disconnects? How can it be improved?
• Regarding pay conversations, are employees relying on Google searches or ChatGPT to determine what they think they are worth?
• Can employees readily access their personal job description, and is it accurate? Does it reflect the current organizational structure and context of their job?
• Do pay conversations create comfort or irritation? Even though it should be expected that some employees need to process the outcome of a pay conversation, do they come back with questions, have enthusiasm for their career with the organization or start “quiet quitting”?

Pay Conversations That Pay Off

What can be the result of these efforts?

• Organizations and TR functions that foster fact-based pay conversations can better align teams with management and allow managers to directly answer employees’ questions on how pay decisions are made and educate those workers about their path for career advancement.
• Organizations that fully equip their managers with well-defined job descriptions, unshakable compensation data and a firm but compassionate perspective that almost no one likes discussing their pay can set forth an entirely different dynamic — one that respects the potential of the employee while protecting the organization’s business objectives.
• Supporting your organization’s managers with contemporary compensation tools and precise market pay information likely leads to better employee engagement and demonstrates a deeper understanding of how personal pay is structured.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Compensation
• Workforce Engagement