Employees complaining about pay? How to respond – and keep morale high

What’s one of the most difficult problems you deal with as a manager? Salary complaints. 

It’s a sensitive subject that often isn’t even fully within your control. Yet it’s critical to handle it delicately, as this affects everything from an employee’s morale to his or her living standard. And it’s just as important to deal with the situation as soon as possible.

Woman checking email

You want to keep communication flowing by handling pay complaints with professional tact that won’t kill morale.

Here’s how to respond when they say ….

 “People at other companies in the same position make more than I do.”

There aren’t any two companies in the world that have the same salary requirements – so tell your employee this.

There are a lot of things to be considered in salary ranges, including work output, budgets and overall profitability.

And as you know, location is key. It pays to remind your employees that, if someone is living in a higher cost of living area, he or she will likely get paid more.

This is a great time to spell out other things your company offers that your competitor doesn’t – such as bonuses (almost everyone offers these) or flexible schedules. It’ll remind the employee what she does have, rather than what she doesn’t.

“I had a great performance review. Why the skimpy raise?”

Take a look at your company’s current raise practice. Is the pay pool pretty small? Is your company still recovering from a down economy? As a manager, you see all this happening but your employee doesn’t. Spell it out for him, so they don’t take it personally.

Regardless of the reason, it’s best to be open and honest. Explain it thoroughly and let the person know you went to bat for him to get him as much as possible. See if you can offer something else to satisfy him, such as a work-from-home day.

“I can’t make ends meet with my current salary.”

This is a tough because no matter how hard you try or what you say, you can’t solve it. It’s not in your power – or your company’s – to make salary decisions based on one person’s financial requirements.

Your only choice: Suggest the employee gain certain knowledge or skills that would help her reach a higher pay scale. Work with the employee to help her discover those opportunities and map out the career path. You don’t want to leave her without direction.

“But so-and-so makes more than me.”

You know salaries don’t need to be the same in order to be fair – but how can you explain that to an employee?

Take a moment to consider what goes into deciding a salary: skills, education, experience, performance, etc. Keep your explanation universal while avoiding comparing this specific employee to another.

If the person drops the “D” word (discrimination), it’s time to listen very carefully. An employee might feel he or she is doing the same job as another employee, yet is getting less pay because of age, race or sex.

As soon as the conversation ends, go to HR. Discrimination accusations can bring a lot of complicated legal issues to the front. You don’t want to try to solve this problem with a quick explanation. Get HR’s opinion before moving forward.