Salary Disputes? Here Are 3 Things Business Owners Should Know


You’re both lucky and unlucky if you haven’t encountered these salary disputes. The former because it means your employees are happy, and the latter because you have no experience handling this kind of problem yet. At one point, somebody will ask you to justify their salary or ask for a raise. How you manage this concern will have a significant bearing on your relationship with the rest of your staff and the company’s success as a whole.

This is especially true during the pandemic. You need your key employees fully engaged and satisfied with their work to keep your business operational despite the crisis. If you want to handle salary disputes like a true boss, then here are three facts you need to bear in mind.

Your Initial Response Matters

Business owners and managers can rarely anticipate when employees will approach them with concerns over their pay. When they do, it’s reasonable to feel irritated and defensive. Money isn’t the easiest topic to talk about, particularly when it’s the form of compensation. Regardless if you feel that this concern is valid or not, you have to be ready with a response.

The ideal answer entails a clarification of why you cannot resolve this dispute at once. Depending on the specific issue raised, you may have to talk to your accountant and the relevant people in your leadership team. Think about it: if you don’t hold off a decision and agree to a salary raise, this can trigger a domino effect and create unrest within the workplace. The same often applies to turning down this request or invalidating the dispute.

Anticipating this event by preparing a calm and reasonable response is your best move to avoiding the classic disgruntled employee.

Let the Right People Step In

business meeting

If you have a human resources department, you’ll have easy access to all the employee records needed to settle this dispute. If this is a task you outsource, however, then you’ll have to make sure you have a good understanding of the third party’s methods and access to the files you need. It’s not unheard-off for certain HR and accountancy tasks to be outsourced nowadays. Payroll services for small businesses are a great means to cut back on costs without compromising your back-office work quality. You’ll want to be sure that when you need their insight on certain disputes, they can give you a clear explanation for computations, deductions, and similar concerns.

Another important person is the employee’s direct supervisor. He or she can give you a good perspective on why the request or issue was raised and whether it’s valid.

Determine the Value

No matter the specific salary dispute, you’ll want to have a good assessment of the value the employee brings to your company. The process is not the same for every department, as there are jobs that bring measurable value and jobs that don’t. Your sales team, for example, will be easier to assess than your administrative or marketing staff. It’s best to look at their current output instead of being swayed by the prospects of potential. You’ll want to work only with what’s tangible and not the promise that the employee can bring more value later on.

You determine this when the value they bring exceeds their compensation. It’s a good idea to have your leadership team coordinate with HR to have a method to track an employee’s value. This way, you can give them the raise they’re due before they even ask for it.

In case your perspective and that of the concerned employees don’t match, ask them to validate their side. Perhaps they can make a compilation of documents and records that prove their productivity and accomplishments. Offer to send a list of data you want to see and make yourself approachable. Simplifying this process for your employee will keep it from feeling like you’re going on the offensive. Emphasize that you’re willing to consider anything they think you overlooked in your evaluation. You must make every effort to see eye-to-eye so that you see where both parties are coming from.

Always Take Time to Listen

Making your employees feel heard will always help in keeping the resolution process peaceful. Take time to listen to them and be sincere about it. Should their request be denied, then you can rest assured that there will be no ill feelings getting in the way of your work.

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