In the first year of my leadership career, I messed up a really important interaction. I learned from it and I’ve grown significantly since then, but I still look back and cringe at the avoidable outcome.
I utterly failed to advocate for an employee when she asked about adjusting her compensation.
This employee, a supervisor that reported to me directly, approached me to inquire about a raise, feeling that her recent increase in responsibilities and good performance warranted it. I was in my mid-twenties, had just taken over this department, and didn’t know this employee particularly well. So I deferred, saying I would think about it and talk with HR about it. I really wasn’t sure what else to do.
I called HR and was told that the company typically didn’t pay increases until annual merit raises. Well ok then, that’s that. I called the employee back in, said “the company doesn’t pay increases until annual merit raises” and told her we’d discuss again then. I remember distinctly receiving a blank stare, a curt “ok”, and then she left.
Our professional relationship chilled significantly after that encounter. I later found out that she was advising people not to go to me to discuss salary issues because I “didn’t care”.
Awful.
A career spent leading others means a career spent building relationships. For most of us, our first lesson in management is that people don’t do anything just because you’re the manager. Our authority comes from buy-in: people buying-in to the fact that we’re “in charge”. We start with a small amount of credibility and trust and are tasked with building up that trust and credibility through authenticity, competence, and advocacy. We then work to maintain that credibility.
I’ve seen nothing more corrosive to trust than to have a capricious attitude about how people are reimbursed. I learned the hard way in my novice years, and have seen this mistake repeated over and over again by inexperienced leaders. Managers are repeatedly told that people don’t decide whether to leave or stay at a job because of money. This is mostly true. What they don’t tell you is that people will absolutely leave a job if they feel like they’re in an environment where the leaders don’t respect and protect their ability to earn a fair salary.
I damaged the credibility and trust my supervisor had in me by not asking more about that employee’s situation, asking myself: “do I think this employee deserves a raise”, and taking personal ownership of the situation.
Regardless of your level of management, you’re going to have influence over compensation for your employees. And here’s the thing: there are no rulebooks for how to compensate people. Yes, you’re going to have an HR department that sets some broad guidelines for compensation, but these are boundaries, not a playbook on how to effectively address compensation questions. Ultimately, you’re responsible for developing rules for when it is or is not appropriate for your employees to receive raises, advances, bonuses, or other types of incentives. You can’t delegate these decisions because your employees depend on you to advocate for them, and part of advocating for them is addressing their individualized concerns. Over the interceding decade in my management career I now use a straightforward system for ensuring I’m handling compensation intentionally: a) have a system b) be vocal c) be consistent, d) be compassionate f) advocate fiercely.
Have a system
You need to have established norms for how you approach compensation. You need to be knowledgeable on what tools are on or off the table. Can you pay out bonuses? How much are you allowed to adjust someone’s pay unilaterally? Can you pay out advances? Exactly what tools are at your disposal and what precedent has already been set by the company or your predecessor. In my current role, pay changes for my employees require the approval of my superior. If one of my employees comes to me to discuss compensation, I have a good understanding of the tools that I’m comfortable using and I discuss with my superior my thoughts and reasoning. Then, regardless of the outcome, I fully explain my perspective to the employee, as transparently as possible. Your team will want to know there’s a “why” behind your norms, even if they disagree.
Be vocal
Once you’ve established a consistent system, be vocal about it and how you came to your conclusions. Seek input from your peers and direct report regarding their philosophies and approaches to compensation. If you’re in upper management and your employees are also managers, then ensure that you are on the same page with them regarding what your norms are. I’ve had many occasions where managers on my team make a compensation decision that I didn’t agree with simply because I poorly explained my stance and worldview on the topic. To avoid this, I take every opportunity to discuss compensation and regular practices during annual merit increases and when unique compensation situations arise. And when people do engage you about pay, be vocal about the norms you’ve established. Again, even if they disagree, they’ll appreciate your transparency.
Be consistent
Keep track of the decisions you’ve made around compensation and why you made them. Involve your HR team as often as possible and walk your thinking through with an impartial judge (peer, someone in HR, etc.) to ensure you’re clear-headed and not letting a bad day/week affect your decisions. Your employees talk, and if you’re uneven about who gets compensated for what, people will find out. If you’re perceived as being inconsistent in your compensation practices, you might find yourself on the wrong side of a lawsuit and likely completely destroy one of your employee relationships.Trust me — you’re going to find yourself tempted to make payment decisions based on your respective implicit biases. Protect yourself!
Also, if you pay out bonuses for performance, be sure you have clearly defined criteria that are as egalitarian as you can make them across your entire team.
Be compassionate
This is both the easiest step to follow and the one I see many managers take for granted. If an employee comes to you to discuss pay, always listen and try to understand their perspective. It’s important not to act impulsively and not to pre-judge the situation. If you’re too quick to respond, too quick to go with your gut, the employee won’t feel like you heard where they were coming from. Regardless of the specific situation, be sensitive to how anxious everyone is around discussing their salary. Anyone who goes to their boss to discuss salary is always at their most vulnerable and most defensive. Set a good example by being a good listener and showing a sincere interest in your employee’s perspective. If anyone on your team feels like you didn’t sincerely try to understand their perspective, you’ll never earn back the lost trust. Imagine it was you in their position. Anyone who’s ever had to ask for a raise can relate to how physically anxious it can make someone.
Advocate fiercely
Lastly, be dogmatic about advocating for your team. If there are company pay practices that are not in your direct control, but will have an impact on your team, speak on behalf of your employees. There will be key discussions in your organization where you’re the only voice your employees will have. If your employees don’t believe you’re going to promote their interests then you’ll be perceived as agreeing with the policies or actions that aggravate them.
A large part of my growth as a manager and leader continues to be from making mistakes and learning from them. The steps I’ve listed above came from several small and large errors around this issue. Leading others means embracing aspects of your own imperfection, so don’t beat yourself up if you aren’t 100% sure you’re handling compensation conversations in the “perfect” way.
The goal is not to be perfect, the goal is to be conscious of the fact that you’re trying to handle these conversations in a way that allows the employee to feel heard and respected.
Next time one of your employees approaches you about compensation, reflect on one of the points listed above and try to really nail that aspect of the conversation. Explain your thinking thoroughly, ask questions about your employee’s thinking, or advocate fiercely to the final decision maker. As long as you feel like you’re making steps in the right direction, you’ll do okay.
Good luck out there.
-Patrick