4 minutes
When employees complain about pay
Does anyone ever think they are paid enough for the work they perform? Probably not many. Still, there are certain people more prone than others to be the ones complaining that they aren’t paid “fairly.” They don’t leave and find other employment; they just don’t relent on the topic, no matter the size of their last increase.
Sometimes it is commercial loan officers who can find a larger financial institution that will pay more if they believe they can bring a book of business. Sometimes it is investment officers who compare their jobs working for a community bank or credit union to Wall Street. Sometimes it is the technology group that tries to hold other less tech-savvy executives hostage with the intimidation of their expertise. Occasionally, it is an executive who is positive no one understands all the responsibilities he or she has.
Is the Complaint Legitimate?
When an employee brings a compensation complaint, it’s important to know if their point is valid. Having access to enough surveys to feel confident that the position’s salary range is up to date and appropriate to the industry, geographic location and asset size is the first step to confidently and firmly establish a market pay rate.
The minimum of the salary range is typically 80 percent of the midpoint and the maximum is 120 percent. For example, if $100,000 is the midpoint of the range, the salary range is $80,000 to $120,000. If the complaint is legitimate, take the recommendation and data to the person at your credit union, most likely the head of human resources, who has the jurisdiction to authorize a corrective action.
The credit union will want to ensure that it is following its own compensation philosophy. Consequences of doing nothing include the high cost of turnover and exposure to accusations of discrimination.
Transparency Leads to Accountability and Trust
But if the complaining employee’s salary range is up to date and accurate, take the time to explain your industry survey sources and methodology. If you don’t feel you have that type of solid methodology behind your salary ranges, you have no defense. Explain where in the range the incumbent is paid and what it would take to be valued closer to the maximum. Sometimes the problem isn’t that the range is wrong, but that the entire range isn’t being used. There is a 40 percent spread in the range between the minimum and maximum: use it to reward for performance, tenure or to reduce exposure to losing harder-to-recruit positions.
Smart Employees May Counter With Their Own Survey Data
If an employee brings data to a salary negotiation, check the source. It may be from other industries that use similar job titles. Make sure those titles—and the job descriptions—match up to how the job is used at your credit union. Keep in mind, the least reliable surveys are online surveys completed by individual employees.
Another common strategy for trying to increase the range is to argue that the current title is wrong. At one new client’s office, the IT director wanted to change the title core processor specialist to “software developer.” Another client calls an employee who provides end user support, a network engineer, whereas other companies call that same position an IT Specialist II. This can have consequences down the road when salary survey data shows that network engineers earn more than IT specialists.
The human resources department should have the final say on salary ranges. The cost of caving and allowing for disparate treatment is too high on employee morale. On the other hand, the cost of paying too low in the market and having a higher turnover will soon get HR’s attention.
At some point, the conversation must end. Tell the employee how much their contributions are valued. At a small to medium sized company, there are limited career paths to take, as well as a limit on how much a position is worth. Explain credit union-provided benefits and variable pay, or incentive, plans. Finally, when all is explained and on the table, let them know, with no uncertainty, that the conversation about base pay is closed at this time and mean it.
Christie Summervill is CEO of BalancedComp, LLC, Wichita, Kans.
Photo credit: Dollarphotoclub.com/ Nomad_Soul
