Even if you're a great boss there are a lot of things you don’t know about your employees.
That's especially true where salaries are concerned. Here's what employees think and feel about their pay... and what the great bosses do:
Pay scales are like a pacifier for a weak boss: falling back on pay scales is often the easiest way out of a difficult discussion about pay.
Pay scales—and pay practices—are important to a company, but they’re largely irrelevant to an employee who, often with good reason, views them as as arbitrary rule.
Saying, “That’s just how our system is set up,” is a cop-out. If the company can’t afford to pay an employee more, smart bosses say so. If they think a certain percentage raise is fair, they explain why. Smart bosses use pay scales to build their budgets, and use reason and logic—and empathy—to explain pay decisions to employees.
Many companies actively discourage staff from talking to each other about their salaries. I know a few companies that require employees to sign agreements stipulating they won’t disclose pay, benefits, etc to other employees.
Doesn’t matter. Employees talk. I did, both when I was “labor” and when I was “management.” Generally speaking, the only employees who don’t share details about their pay are the ones who are embarrassed by how much or how little they make.
Smart bosses never assume raises, bonuses, starting salaries, perks—basically anything related to compensation—will stay confidential. Most of the time, everyone knows everything.
Unless a business is struggling, most bosses only see employee salaries as an item to consider when it’s time to prepare an expense budget.
Employees think about pay all the time. Every time they deposit their paychecks they think about their pay. To a boss their pay is a line item; to employees, pay is the most important number in their family's budget.
(Unfortunately many bosses spend a lot of time thinking about their own pay but rarely apply that same perspective -- and empathy -- towards their employees' pay.)
Smart bosses spend a little time each week thinking about ways they can improve employee salaries and benefits. While they may not be able to make substantial changes to what they pay, they find other ways to improve how they compensate employees: flexible hours, flexible benefits, better developmental opportunities, etc.
Occasionally the job market is a seller’s market, but many new employees are just really happy to land a new job. And since business owners are born cost cutters, it’s natural to hire every new employee for as low a wage as possible.
Then the employment honeymoon wears off and the employee feels the company -- and the boss -- took advantage... and that feeling never goes away.
Smart bosses never take advantage of a naive or desperate employee. They know the gain is never worth the pain.
Plus it’s just wrong.
Here's why. Employees lose if only because they resent justifying a certain pay level; in their view their boss should already know their value. And the boss loses because at some point her or she may have to say, in so many words, “I’m sorry, but you’re just not worth that much.”
Great employees are worth a lot more than their pay. You get what you pay for, so smart bosses pay whatever they can to get and keep the best employees they can.
When smart bosses find great employees they always make their best offer, knowing that if their best offer is too low, there is nothing they could have done.
We all grow accustomed to what we have. A big new house eventually seems normal. The effect of a big raise eventually wears off; eventually, that raise is just pay as usual.
We all want more. It’s natural. Unfortunately no boss can always give more. And that’s okay, because…
People are smart. They understand market conditions, financial constraints, revenue shortfalls, and increased competition. They understand when a company can’t pay top-of-market salaries. What they don’t understand is when they don’t feel fairly compensated compared to other employees in similar positions, both inside and outside the company.
Once pay is reasonable and fair, other things become important: recognition, respect, challenging work, opportunities for development… basically the feeling that their job is more than just a job.
The happiest and most engaged employees feel they work for something more than just money. It’s a smart boss's job to provide that sense of belonging and meaning. Without meaning, employees are stuck simply working for a paycheck.
Higher pay is great... but the effects are fleeting.
Smart bosses know that respect, recognition, and a sense of real purpose last forever.
What about you? What do you wish you could tell your boss about your pay?
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