The Importance of Communicating Context around Pay

By hrlineup | 27.01.2021

Money is always a touchy subject even if it’s with your spouse. So you can only imagine the anxiety that surrounds the pay conversation in the workplace. As a manager, you need to be sensitive when acting as the intermediary between employees and HR during pay rise and bonus discussions. Strict regulations have to be adhered to but also, you need to keep your team engaged and happy.

To have fruitful compensation conversations with employees, you need to learn how to communicate. Remember, it’s not what you say but how you say that matters.

To start us off, let’s find out why context is so important.

Importance of context

Sharing context with your loved one helps to put everything into perspective. Moreover, it explains why they get what they get. Aside from this, everyone wants to know the thought process behind the value someone places on them.

Last but not least, it helps the individual negotiating the pay understand why they are offering the number and not anything higher or lower. Without this understanding, the manager will be out of sorts.

Given that pay is a tricky subject, you cannot afford to pass on the wrong information or worse still, pass on the correct information but in a wrong manner. This could end up with lost trust among the employees.

In the workplace, the pay is directly related to one’s value. As such, feelings are always involved and managers need to offer thorough explanations to manage the situation.

Factors to Bear in Mind When Communicating Pay

In this portion, we’ll look at how to discuss pay with your employees. As a manager, if you haven’t gotten proper training for this, you should request for an in-depth explanation and thought process behind the figures. This will make a huge difference in your communication. Moreover, you should learn the following.

The company’s philosophy on compensation

Every company’s compensation is tied to their goals and core values. As a manager, you should answer any pay questions along these lines to ensure continuity and cohesion in the company. Some of the topic that might arise include:

  • Why did I get an ‘X’ amount as a bonus?
  • How much percentage pay rise do I get next year?
  • Why did I get ‘X’ salary?

The more context you offer while answering these questions and show consistency wit company values the more content your team will be.

Market pricing

Understand how your company compares to others in the market. This explanation can be the difference between retaining your employees and losing them. You can explain how the company comes up with the pay ranges, how they ensure they are competitive throughout the years, what other companies they use for comparison, and whether they are leading the pack.

Explain how the company approaches salary changes

Before communicating salary increases to employees, you should check in with the HR for guidance on how to guide the conversation with the employee. If you have great talent, this discussion can help you retain them.

Have your HR train you on how to:

  • Communicate a pay raise to an employee
  • Handle bonus communication to employees
  • How to provide context

As you prepare yourself to handle this discussion, remember to create a connection and show that the numbers have not been randomly pulled from a hat. While employees are not willing to settle for less pay, they feel more valued when they understand why you pay them ‘X’ amount.