How to respond to employees who complain about their employee compensation

There are countless questions and complaints people raise about employee compensation. Be certain you know how to answer them:

I got a 10% raise last year but only 5% this year even though you’re saying I did great work. How come?

Well, 10% is a big raise. My suspicion is that 10% might have come from an employee compensation that was made because they were lower in their band originally. Now, they are being paid closer to market, 5% may be a very aggressive employee compensation. You need to talk to this person about the reality of what the salary range looks like, where they are, or whether there’s another one in it for them some day. And let them have more perspective on where they stand. We need to shift this from a conversation where I just give you things to a conversation about maturity and movement and how a raise fits in context with a larger purpose or a longer term situation.

Why did I only get 80% of my bonus, instead of the whole thing?

This depends on your bonus formula. Hopefully, if you got a formula, you can talk to somebody about exactly where it came from. If 80% came out of the boss’ divine inspiration, it won’t be as much fun to talk about. Then they get into some subjective discussion about employee compensation. But most bonuses are a function of a formula. So, talk about the formula.

Everybody knows what everybody else makes around here. How come I didn’t get as big a raise as the guy in the cubicle next to me?

This person needs to be educated a little bit on the notion that we don’t like you the amount of the increase, we like everything we’re paying you. Don’t look at the amount of your raise as an indication of how much we like you. Look at the total employee compensation.

I didn’t get my bonus because there was no way I could influence results. Why did you set it up that way?

Well, bonuses are kind of an art, not a science. And often times the way we set up a bonus is bonuses are a fraction of profit. Oftentimes, bonuses have a component in them that is broader than just what you personally can influence. And it may be that you don’t get all your bonus even though you personally and your part of the organization did extremely well, the employee compensation formula may factor in how everybody else is doing.

And that can work in your favor in a different kind of year in which your part of the company had a problem, but overall the company did well. But oftentimes, it’s a formula-driven thing – that’s the way bonuses work. This year it may not work for you, next year it may.

This team incentive idea is unfair, “I did great, but all those slackers on my team caused me to lose out.”

Well, again, sounds like this person needs an attitude adjustment. Any kind of incentive or bonus or whatever is a function of some formula oftentimes, depending on other people and sometimes they’ll be pulling you and sometimes you’re helping pull them. In those cases, you need to help pull them.

“I’m one of the best workers around here. I’m in early, I stay late. I’m the one who makes sure the work gets done and now, you’re saying no one gets raises. What’s up with that?”

Well, this is the conversation about employee compensation some of you might have to have unfortunately in the coming months. If your organization is experiencing very difficult times, razor thin margins, extreme competition – if we don’t have the money for raises to pass around, that has to be where it starts. First thing you’ve got to do is run a profitable company. Employee compensation comes second.

I think our performance reviews are rigged. You threw in minor negative feedbacks simply to justify these low salary increases.

The whole pay for performance idea is part of big company lifestyle and that’s a bad thing. Any kind of attempt to tie employee compensation this year to last year’s performance is going to result in a bunch of different kinds of things that appear rigged. If you can take these two things and separate them, you will be much better off.

Edited Remarks from “How to Drain the Drama from Salary Reviews: A Conversation Roadmap” by Gary Markle

Leave a Reply

Your email address will not be published. Required fields are marked *