No MBA mumbo-jumbo, just stuff that's worked through 30 years of team-building in business and the military.

Tuesday, September 17, 2013

The Challenge of Unequal Pay

It's one of the toughest conversations you'll have as a leader: One team member finds out exactly how much less he's making than another. He's angry, he's hurt, he wonders if he can trust you. What do you do?

There are two good reasons to pay someone more: Either the job he does or the work he does is worth more.

If it's the job, it's usually an easy conversation. You can point to the degree needed for the other job, or the different scale that job has with your company. You can shift the conversation to what the unhappy team member can do to make himself eligible for that other job, or one like it.

If it's the work, you have a tougher job. If you base even part of your raises on merit, you have to tell employees regularly how they're doing. If you've done that, you can point out how the higher-paid team member is doing the things you've already counseled your unhappy member about. If this is the first time the unhappy employee is hearing it, though, your relationship and credibility is going to take a hit, and rightfully so.

The bottom line: If you're talking to your people regularly about performance, and if your pay decisions are fair, you won't have this problem very often.

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