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I recently acquired a division of a company where the employees had not received pay increases of any kind for two or more years. I was pleased to be able to make reasonable, if not generous, increases for all employees in conjunction with annual reviews.   All the employees we "acquired" were selected as being top performers, so there was a narrow range based on employee performance.  We even gave small increases to those who had recent promotions.  To my chagrin, all of our non-management employees have blabbed about their compensation to everyone else, resulting, as any resonable person would expect, in all kinds of unhappiness and hurt feelings (bearing in mind that we have pay ranges, and everyone is well within their range).  One employee resigned over it, although I think we may be better off on that one.

How should I approach our workforce about this?  The managers of the group are planning to address it with feedback to individuals in their O3s.  Should I take any further action to the group at large? Or ignore it and let it blow over (as all comp news, good or bad, does pretty quickly)?  We have a pretty young workforce, but they are all college graduates, some with graduate degrees.  Do they truly not know any better?  What am I missing?

This is the first time I have found myself inclined to write, but I am caught by surprise with the magnitude of this problem!  Thanks for your thoughts on the matter!

Denise

uwavegeek's picture

Check with HR, but management is not allowed (i.e. against the law as of ~2014) to discipline or punish employees who discuss their salaries with each other.   Something to do with the fact that it is to the company's advantage to keep employees in the dark in regards to what equivalent positions are paid.   Primary thrust here is to reduce the gender gap in wages.

http://www.npr.org/2014/04/13/301989789/pay-secrecy-policies-at-work-oft...

I would review the cast 'Annual Reviews and Compensation' to get an overview of how it works (at least in the companies that I've been at).  You can base any discussions with employees based on this framework.

Having said this, if your company is grossly underpaying high performing people, they may well figure it out sooner or later and leave.   My guidance is to get in front of this, understand where  your folks are based on the market averages and use this to make a case for adjustments should they be needed.  Being proactive on this and getting buy in from HR can go a long way.   I myself sucessfully lobbied for two promotions that required special budget allocation using this very method.

 

Good luck,

Neil

dpandrews's picture

Neil,

Thanks for the article!  Fair point.  To be clear, I'm coming from it as a "tearing down the team" issue. The comp is reasonable for the industry and we're pretty transparent about it.  We've got the comp in pretty tight bands, which are published (although I don't klnow that people have paid close attention to anything other thn their own number), so it's not like there is even much range.  They are fussing over pennies and single percentage points in merit increases.

Also, I'm the owner, so there's no one to lobby.  We gave careful consideration to doing as much as we could for our employees, so it's disappointing to have this kind of reaction.  Doesn't really motivate me to stretch so much in the future.

Honestly, I'm just disappointed.

Denise

pucciot's picture

You can also note in that article link

"Estlund also says that the law doesn't protect "mere griping" about pay, which would not rise to the level of "concerted activity" as outlined by the law."

You can give feedback about how things are discussed while on the job.

 

So, the employees are free to talk about salary off the clock - and in a constructive way.

But, you can ask an employee not to tear down the team or bad mouth the organization.

You most certailnly can give FeedBack, if you word it carefully and correctly.

I have done this before.

I have tried FeedBack such as :

"When you use phrases like 'that's why I get paid the big bucks" in a sarcastic way, it hurts the morale of others around you..."

"When you gripe and complaign about salary at a staff meeting, it throws us off track, (it is off topic) (or hurts morale) (or makes other team members uncomfortable) ... "

"When you insult your wages and blame "them", it is also reflection on me, as your supervisor, and such insults create no positve effect on your results or mine ..."

---

If they challenge you --- --I've had a direct tell me "that's censorship"  I told him nope - that he is free to say whatever he wants -- and that my role is to tell him what is good performace on the job.  I most certainly can prescibe some of the things he says while on the job.

You can say --

"Gripes, insults, complaints, and blatant sarcasm tear down the team and the organization.  I consider that poor performance"

"You are free to talk about whatever you want off the clock.  Just not while working and not in open meetings not dedicatedd to that topic,"

"You can talk about and have a civil and constructive discussion about your salary with me and you co-workers during one-on-ones, or in the break room, on the clock in a meeting that is about salary, or in your off hours  -  and I stress civil and constructive discussion, please.

Good Luck.

TJPuccio

mrreliable's picture

It's a losing battle to or control conversations among employees. If they're not smart enough to know that discussing their compensation with other employees can only hurt them, there's not much you can do.

I've had these discussions. I suggest to my directs they keep their compensation to themselves. Otherwise they risk having a bunch of other employees pointing at them saying, "It's unfair that he makes more than I do." That can only put downward pressure on the direct's ability to advance in compensation. 

Discuss the direct's performance and compensation with them and give some suggestions for improvement, and give them some information about how and when compensation can be adjusted.

I learned how to deal with this issue when I coached youth sports. Parents would approach me and say their daughter should be the starting catcher because she has a better arm than So-And-So. I'd nip it in the bud and make it clear I was glad to discuss their daughter's situation, but not in the context of whether she was better than So-And-So, just as I wouldn't run their daughter down if the situation was reversed.