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Tag: salary range

  • A Manager Accidentally Leaked Everyone’s Salaries. The Fix Is Simple—But Rarely Done

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    A manager made a terrible mistake and accidentally sent a spreadsheet with the whole department’s salaries to an employee, according to a post on Reddit’s antiwork group.

    The employee then discovered that they were earning $15,000 less than a similarly situated coworker and that even the new hire is making more than they are.

    This is a rotten position for a boss to be in. Sharing confidential information, such as salaries, in violation of company policy, can get someone in real trouble. And having an employee discover that they are woefully underpaid is also a nightmare. You should avoid this scenario at all costs. I will teach you how, and this works every time it’s tried:

    The secret to avoiding bad reactions to accidental salary disclosure

    Are you ready? Because this may be a little bit difficult to set up but once you do, I guarantee you won’t have any problems with salary leaks. Here it is:

    Stop paying people less than they deserve.

    That’s it. That’s the secret. If the poster had received a salary sheet that showed that all similarly situated employees were earning roughly the same, there wouldn’t have been a post, and there wouldn’t have been a problem. 

    So, paying people properly might be a little more complicated than just keeping salaries confidential, so here’s how to keep salaries at the proper levels.

    First, do an audit

    You need to get everything corrected. And that means conducting an audit, at least every six months, says Brenda Neckvatal, a human results professional and author of The Leadership Survival Manual. “If you are monitoring compensation on a regular basis, this won’t happen.”

    Regular audits catch inequities before employees do, and before they hit Reddit.

    Embarrassing (and often illegal) salary discrepancies often happen through error or bad company policies, rather than maliciousness. But when you have a situation where two people doing the same job have some sort of difference in race, gender, or other protected characteristic, it can be hard to prove to a court that you’re just bad at compensation.

    Fix your bad policies

    Bad salaries happen because of bad policies. Some of these policies you’ll want to review, revise, and eliminate could be:

    • Allowing managers to make job offers or promotions without consulting human resources. It’s not that HR has power over what you should pay someone; it’s that they have the knowledge to say, “Hey, we have three people doing this job and they make $X. You’re offering $X+15k, and that will cause internal equity problems. 
    • Limiting the raise you can give to an internal candidate. Many companies have policies that limit an internal candidate to, say, a 10 percent raise. But if you promote them into a position where everyone else is making 20 percent more than they were, you could end up with bad feelings and the loss of a good candidate. Your policy should be to offer internal and external candidates the same amount.

    These two bad policies permeate businesses, stressing the ideas that they save money and gives managers freedom. But it can make for messy situations.

    Then, make sure it doesn’t happen again by changing how you hire.

    Set the salary for the role before you interview

    Don’t go into interviews with vague ideas. Many states require you to post your salary ranges, but I still see ridiculously wide compensation spans. Don’t do that.

    Before you even post the job, figure out what the salary for that role should be. Yes, there can be variances depending on certain skills. Like, for instance, you might be willing to pay $5,000 more for someone who can speak Spanish or has a master’s degree. That type of difference is fine (assuming they will help with the role.

    Take your qualifications for the position and create a grid that you can match your candidates up against. The goal is that, after interviewing candidates, there will be a clear salary that each one would match up to. That’s the salary you offer.

    Don’t negotiate

    Candidates are taught that there is always a little bit more money out there and to ask. But not everyone does, and not everyone does so well. 

    It makes zero sense to pay someone more money because they ask. People should be paid based on their skills. 

    So make your highest and best offer first. People will still try to negotiate, but just say no, this is my highest and best offer.

    What to do if your employee finds out they are underpaid?

    Now, what would you do if you were this Redditor’s boss? Apologize profusely, get the salary increased to the proper level, and provide back pay.

    That’s the right thing to do. Then go back and audit all positions to make sure this doesn’t happen again.

    Check your attachments before you hit send. But honestly, if people are paid fairly, there’s no reason to keep salaries confidential other than tradition.

    The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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    Suzanne Lucas

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  • I Ask Candidates Their Salary Expectations, and I Don’t Feel Bad About It

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    Inc.com columnist Alison Green answers questions about workplace and management issues—everything from how to deal with a micromanaging boss to how to talk to someone on your team about body odor.

    A reader asks:

    You’ve talked about how inappropriate it is for employers to ask candidates about their salary expectations without giving out any info on salary themselves.

    I became a small business owner without having received training in that aspect of things, but learned early on when I am hiring to always ask the candidate their salary expectations before giving any information out about the range I am willing to offer. Why? Firstly, the money comes directly from our pockets and frankly if we can get away with paying $20/hour instead of $22/hour, why wouldn’t we? It also gives us room for raises, bonuses, etc. without taking too much of a financial hit. You always advocate that employees look out for their own interests. Why should that be so different for me as an employer? Maybe we tend to think of employers as big corporations but in our case we’re just hard-working individuals hoping to keep expenses in check.

    The second reason I want that information first is that if I were to give my range, a candidate expecting more might well say, “Sure, that’s fine,” while planning to take the job and keep looking for something else. Frankly, I want to know if they’re likely to be unhappy with that salary! Hearing that they expect more is valuable information for us to have and if I can get it, I will.

    So there you have it from a brazenly unapologetic employer who plans to continue asking the question. (For what it’s worth, we are excellent employers whose staff have been with us for years and seem very happy).

    Green responds:

    Well, I’ll happily tell you why you should stop.

    First, your current practice is likely to lead you to break the law. The Equal Pay Act of 1963 makes it illegal for you to pay a man and woman differently for doing the same work. So if you have a man who negotiated a higher salary than a woman did, and they’re doing substantially equal work, you are violating federal law. The law is clear that it doesn’t matter whether or not they negotiated differently and it doesn’t matter whether or not you intended to engage in wage discrimination; the fact that you’re paying them differently is itself illegal. (There’s an exception if you can prove the difference in pay is due to a seniority system or a merit system.) This is true if the genders are reversed, too — you can’t pay men and women differently, period.

    So if you want to look out for your own interests, ensuring you don’t break the law — with the significant fines and penalties that go with that — is a pretty good baseline to start with.

    Second, there’s tons of data showing that setting pay the way you’re doing disproportionately harms women and people of color, who are less likely to negotiate. I’m sure you don’t want to be perpetuating a system that keeps women and people of color’s wages depressed.

    Third, if you’re worried about losing candidates once they hear your range, then either your range is too low for the market and the candidates you want to attract or those candidates aren’t well matched for the role you’re filling. As the employer, you need to figure out the value of the work to you and to the market, come up with a range that reflects that, and be able to explain to people where they fit into it and why.

    Fourth, you’re far better equipped than your candidates are to know what the job should pay. You’re intimately familiar with the role’s responsibilities, pressures, and challenges in a way an outside candidate never can be. You’re asking candidates to name a number first when they’re not the one with the deep understanding of those factors — which can result in new hires who discover the salary doesn’t match up with the job after they start, which can mean they don’t stick around or don’t go above and beyond in the way they might if they felt fairly compensated.

    And last, the world is increasingly scoffing at employers that operate the way you do, and more and more employers are jettisoning the practice. When you refuse to disclose your budgeted salary range and insist on the candidate naming theirs, you’re sending a signal about your culture that will increasingly turn off your best candidates.

    I think the reason you’re “brazenly unapologetic” about a practice that hurts people is because it’s what you’ve done in the past and you don’t want to change something that you’ve grown comfortable with. But it’s a poor way to operate and at some point will have you violating the law if you haven’t already.

    The times are changing. Change with them — and don’t gloat about doing something that hurts people.

    Want to submit a question of your own? Send it to alison@askamanager.org.

    The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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    Alison Green

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