HR MANAGEMENT - How to Deal With Employees Who Are Unhappy About Pay

by Wanda Thibodeaux, Demand Media

Compensation is one of the major ways companies attract and keep employees. When a company no longer can provide a salary that satisfies an employee, its best for managers to deal with the employee's unhappiness directly. Doing so means that the company can present an argument to the employee for why salaries are at their current level. If the employee comes to understand the company's position, he may be less likely to vent his grievance to other employees and subsequently turn the workplace atmosphere negative.

Step 1

Gather market data verifying that the rate earned by the employee is competitive given the current market and the skills the employee has. Printing off job postings or asking human resources representatives from similar companies for examples of current rates are both easy ways to get information.

Step 2

Contact members of the accounting department, and request copies of the current employee budget.

Step 3

Get in touch with the human resources department. Request copies of the employee's performance reviews for the past year.

Step 4

Schedule a one-on-one meeting with the employee who is unhappy.

Step 5

Go to the scheduled meeting. Talk to the employee about what pay he feels is appropriate given the current market and his contribution to the company. Write down his key points, and summarize what he has said so he knows you've been listening and accurately recorded his argument.

Step 6

Review the documentation you've gathered from job postings, other companies and the accounting and HR departments with the employee. Point out areas in the documentation that conflict with his statements but also acknowledge whatever accurate assertions the employee has made. The idea here is to close the gap between what the employee perceives about the company or industry and what actually is true.

Step 7

Explain in detail how the company came to its salary decision and what the employee could do, if anything, to earn a bonus or salary increase. Tell the employee what you could offer in lieu of a salary hike, such as the option to work from home occasionally or coverage of some educational courses or training.

Step 8

Offer to put a note in the employee's file that you and the employee discussed the salary issue, so the employee feels confident that compensation concerns won't be swept under the rug.

Step 9

Provide positive feedback for the employee whenever it is appropriate. Being unhappy with pay sometimes is symptomatic of feeling underappreciated on the job, so recognizing the employee's talents and efforts may help him feel like the positive work atmosphere compensates for pay that is a little low.