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August 18, 2011
Compensation Administration: 'I'm Making Less Now' Complaint

In a BLR webinar entitled "Compensation Plans: How to Build (or Fix) Your Compensation Plan in the Next 90 Days," David Wudyka, SPHR, MBA, BSIE, founder and managing principal of Westminster Associates in Massachusetts, addressed the issue of handling complaints from employees about their compensation package.

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One common complaint is, "I'm making less now than my direct reports."

The best way to respond:

  • Confirm the accuracy of this claim before you do anything. If you have a supervisor who's honestly making less than his/her direct reports -- and there's no business reason for the discrepancy -- you could have a serious problem on your hands, especially if the supervisor is in a protected employment class.
  • If pay mistakes were indeed made, fix them as soon as possible. If you can't justify the disparity, this may be case where, indeed, you'll have to come up with more money or better non-monetary benefits to bridge the gap.
  • Point out any extenuating circumstances that led to the disparity. For example, if the supervisor's direct reports earned more recently due to larger-than-usual commission payments, that's a valid reason for the pay differences.

Despite the tough economy, your very best employees will always have plenty of opportunity to jump ship for another job.

Also, your top performers will be the first workers who'll feel a "disconnect" with your organization if their pay expectations aren't met. When asked to gauge how much lower their engagement levels are these days with their employers, employees of all types said 9 percent (in the 2009-2010 U.S. Strategic Rewards Report by Watson Wyatt) -- but, high-performing employees said 23 percent.

Historically, top-ranked employees (along with high-potential workers) have always been the key to the typical company's recovery after tough economic times. So, it's critical that we find ways to hold onto our top-tier employees! Don't feel guilty about focusing on them -- doing so is management time well spent.

David Wudyka, SPHR, MBA, BSIE, is the founder and managing principal of Westminster Associates (www. westminsterassociates.com), a Massachusetts-based human resource and compensation firm that specializes in pay, performance, and productivity issues. He brings more than 30 years of professional Human Resources and compensation experience to the table for clients around the country.

Need help staying on top of critical HR and Compensation issues? See all the webinars BLR has to offer.

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