Finding the words to talk about pay

Originally published on HernerConsulting.com.

Once, as a manager, I told someone how much they were getting for their promotion by scribbling a number on a piece of paper and sliding it across the table. Once when I was interviewing for a job, I accepted the offer at face value without negotiating for more. I didn’t negotiate for more anything – more days off, more salary, more upside, more flexibility, more anything. It wouldn’t be so ironic if I didn’t teach people how to talk about pay for a living.

But I’m not alone in fumbling for words when it comes to talking pay. Recently I’ve had two separate colleagues ask me how to negotiate specific pay situations:

One was applying for a new job and wasn’t sure what he could ask for. Together, we priced his job and skills, looking in the right market. I coached him about what words to use to make his ask. He came back to me three or four times over the course of a couple of days with questions. Ok – they offered me lower than I want; how much higher can I ask without losing them? Ok – I think I’m ok with pay, but how do I ask for more flexibility? Ok – I think I’m ok with PTO, pay, and flexibility, am I missing anything I should be asking?
The other friend was preparing for an annual comp review. Working in a small organization with a tight budget, she was convinced she’d be getting a three per cent increase tops. She asked me to help calculate how many PTO hours would roughly kick the three per cent increase up to the five per cent she believed she deserved.

Both colleagues are trained facilitators, highly adept at enabling better conversations about complex and potentially charged topics. But as you can see, there are often times when words fail us.

Here are a few things I’ve noticed:

Pay conversations are very personal, and sometimes have conflict

I can’t think that I’m the only one who has calculated (and calculated again) before heading into a comp review. “If I get this much, it’ll take me three months to save for my next trip, but if I only get that much, it’ll take me five months…”

Employees are doing that all the time. Pay has very personal implications for the livelihood and lifestyle of our employees. That means that when it doesn’t go the way they want, they may get upset. There may be overt conflict in the forms of tears or yelling. Or, worse in my opinion, employees may just shut down and begin the job hunt. It’s better to know they’re unhappy than to get their notice a few months down the road.

What can you do? Most of it has to do with preventative and ongoing actions along the way. Make sure employees are clear about expectations for the job, what success looks like, how they’re measuring up against those expectations, and if possible, how the company is doing. Any of these factors can make an increase go sideways. The longer managers try to avoid the conflict of a potentially difficult conversation, the longer that difficult situation can escalate to a full-on, needs intervention, conflict.

Let’s face it, employees rarely get as much as they think they deserve. That said, if you can explain the rationale for the increase to the employee, that may help mitigate some of the response. At this point, it’s likely that every dollar earmarked for increases is accounted for. There’s not a whole lot of surplus in the budget. Help your employees understand how pay is prioritized. Some organizations try to make pay as formulaic as possible to avoid any potential conflict. Buffer has it down to a science, but even they can’t turn everything into a number. There’s always an element of discretion in pay, so make sure that your discretion matches their discretionary effort.

Talking about pay can be uncomfortable

For both managers and employees, talking about pay can be uncomfortable. While pay transparency has been increasing in prevalence over the past few years, we’re not there yet. That means most of us haven’t yet had enough practice to feel skilled in talking about pay or total rewards yet. While some organizations have had managers sharing the compensation news with employees, for many, that honor is saved for directors, leaders, or even the HR team.

What’s that mean? Get some practice. Say the words. If you’re the one sharing the news, say it out loud once before you share it with employees. If you’re coaching managers at your organization to share pay information with employees, consider sharing talking points and even talk tracks for some of the more difficult conversations. According to PayScale’s Compensation Best Practices Report, only 19 per cent of organizations are very confident in managers’ abilities to have tough pay conversations with employees. Help them out. The first time a manager has to deliver bad compensation news, they shouldn’t be feeling out the words as they go, they should know how they sound because they’ve practiced … a lot.

Sometimes we need the words to say

Back to the situation with my colleagues. Both are great speakers and great writers. When they came to me for help, I gave them some tried and true steps and options. I hesitated to throw out phrases that they might use during their conversations since they’re both so articulate. Both thanked me and asked for more examples. I was surprised for a moment, obliged, then realized that words can be hard when it gets personal.

When situations are charged, and compensation is high up on the list of charged situations, sometimes our words leave us. That’s where having specific talk tracks, examples, and practice can help. What might that look like?

“As we’ve been discussing, the market has been moving really swiftly for your job. As a result, we’ve decided to give you a market-based bonus for your job. On your next check you’ll see $X, and you’re still eligible for a merit-based increase in January.”
“As we’ve been discussing, while the market has been holding fairly steady for your job, your skills aren’t quite where we’d want to see them. We talked about X, Y, and Z things you can do to improve those skills. At this point, we’re not able to do an increase for you. Let’s keep checking in about your progress. In fact, can you throw something on my calendar in two weeks?”
“Thanks for bringing me that report from X. It’s really helpful to see this information. I’d like to take some time to really digest this report and check with our HR folks so we can make sure we’ve priced your job right. I’m going to set up a meeting for next week, after I’ve had a chance to review the report. In the meantime, can you make a list of just the top three projects you’ve completed in the past year? I know you’ve done much more than three, but that will help me prioritize what matters most for the job, as well as calibrate and see where you are relative to the job description. I’m looking forward to talking more next week. And thanks again for all that you bring to the team.”

Organizations are trying to decide what kinds of information they want to share with employees about pay, how they want to share, who should say what to whom and when. Meanwhile, employees are making up their own stories about what matters. They’re checking data online, and when they do they don’t always have all the facts about the organizational priorities. What’s more, while we’re figuring out how best to approach pay communications, employees are quickly learning how to negotiate. And while some organizations feel like they’re on the defensive, this is the perfect time to step forward, define the comp plan priorities, and practice using your words.

Mykkah Herner has over a decade of experience developing strategic compensation programs to ensure retention, motivation, development, and attraction of the right talent. He specializes in linking performance with compensation, navigating organizational change, and improving employee experience to drive better business results. With a Masters in Organizational Development from Antioch University, Mykkah seeks to simplify both compensation plans and the communication around them.

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Finding the words to talk about pay

Pay conversations are very personal, and sometimes have conflict

Talking about pay can be uncomfortable

Sometimes we need the words to say

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