Dealing with employee salary issues

Tor Goldfield, director of PR agency Blue Rocket, explains how to handle salary issues ethically, while making your staff feel they are being appropriately rewarded for their achievements.

Without doubt, one of the most contentious elements of running a business is that of employee salaries. Why, then, have I lost count of the number of people who complain to me about their salary situation and their suspicions, or often outright knowledge, that others at the same level receive more?

Similarly worrying are those who haven’t received a pay rise in years, despite the ever-increasing cost of living, and who don’t feel able to discuss the issue with their boss for fear of coming across as ‘money-grabbing’. While most of us aim to find a job that fulfils us emotionally as well as financially, we all deserve to be paid a fair wage.

In reality, when handled from an ethical standpoint, salary requests need not be the bane of your life and the cause of upset to your team.

The starting point is to do your research and find out the average pay for someone in a similar position elsewhere in the country. If you can’t compete on this level, for whatever reason, think about offering a range of non-financial benefits that will prove equally as attractive. People are increasingly concerned about their work/life balance, so initiatives such as flexible working, duvet days, charitable involvement or a great holiday package can help to swing the balance in your favour.

You may also wish to consider a bonus or profit share scheme in addition to a basic salary. In this way, everyone is aware that their success is directly linked to that of the company and their role within that growth.

Once the foundations are in place, it’s important to agree and publicise the pay structure for each level. This may be a flat pay band for each job description, or could include a level of flexibility that is dependent on people’s performance. If you choose the latter route then you need to provide clear guidelines as to what’s required to achieve the highest salary for each position. Wishy-washy excuses won’t cut the mustard here and neither will continually moving the goal posts.

Decide whether you will run an annual or purely progress-based pay rise system (or both); then implement a regular appraisal structure where people are fairly evaluated against their job description and personal objectives, agreed between the employee and their manager. Appraisals should include feedback from colleagues at all levels – known as a 360 degree process – to ensure they are not being judged purely by one person who’s view will be very subjective. This approach will also weed out those people who present a positive impression to their senior managers but fail to show the same respect to more junior members.

Maintaining open levels of communication at all levels, combined with clear expectations, will ensure that everyone knows where they stand and the conditions upon which their next pay rise will be based.