You might think that once a candidate has signed their offer letter, their salary questions are over. But even after you've sorted out an employee's starting salary, managers should expect to answer salary and bonus questions throughout their tenure at the company. With more access to salary information than ever, employees expect transparency around pay, and not just when negotiating their contract, but at every step.
Below are 6 types of questions your employees might ask about compensation, and how to answer these salary questions.
1. "How is my pay determined?"
With the shift to remote work situations due to the pandemic, workplace transparency has become increasingly more important to employees. They expect their companies to be forthcoming and communicative, and this naturally includes information around salary and pay.
"This question can be scary to hear if a company isn't transparent with their pay model," acknowledges Scott Samuels, an HR Manager at Business.org. The fix for that shouldn't be a big surprise - "make the pay model transparent if it isn't," Samuels says.
Typically, salary is determined by factors including title, skill set, seniority level, and location. If that's the case for your organization, you shouldn't be afraid to share that with your employees. An example of how to answer this question would be: "There is a salary range for this position, and we offer candidates the salary that most closely matches the job role, as well as their specific education and experience" or any other relevant qualifications, recommends HR Analyst Laura Handrick of FitSmallBusiness.com.
2. "Am I being paid fairly?"
When asked this question, you might be tempted to immediately say "yes" to avoid any requests for salary adjustments, but it's best not to say that unless you're certain that's the case: "If they are truly underpaid, I will let them know that I think they can be earning more. I provide details on where I think they should be salary-wise. I never promise a particular salary, of course, but I will always negotiate on [their] behalf," says Carrie McGrath, Partner/Manager in the Search division at talent acquisition firm WinterWyman.
That being said, if you've looked into it and know that they're being paid fairly, you can say something like: "I think you are making a fair salary for your background and [based on] what I'm seeing in the market," McGrath recommends.
3. "Why don't I make as much money as [coworker]?"
Savvy employees will do their research to find out how much their coworkers are making, by either looking on Glassdoor, or even sharing salary information amongst themselves. If they discover a discrepancy between what they earn compared to their colleague, they may become frustrated or upset.
If this is the case, it's best to bring the focus back to the employee in question, and not their coworker, says Samantha Lambert, Director of Human Resources at Blue Fountain Media - "redirect the conversation to focus solely on the individual at hand."
For example, you could reply with the following: "If you are unhappy with what you are earning, then we can set up a meeting to discuss your salary," she says. Then, you can assess individually whether or not the employee is being paid fairly, and if any salary adjustments need to be made, without an apples-to-oranges comparison amongst employees. It's also important to highlight that direct comparisons between employees are not always accurate; even if they are in the same position, they join the company with different backgrounds, and perform at different levels.
4. "Can I have a salary increase?"
The answer to this depends on the performance of the employee, the timing of the question, and the financial health of your business. If the employee is a strong performer, the timing is right, and your business has been given the green light to provide raises to deserving employees, then it makes sense to have a formal conversation about what kind of a raise (if any) is merited.
If this question is asked during an inopportune time, it's okay to be honest about that: "Our advice is to be open and explain budget and profit," shares Jesse Harrison, founder and CEO of the employment law firm Employee Justice Legal Team. You could say: "a raise is possible after a probationary period and yearly performance reviews, but if our firm isn't growing, we won't be able to justify a raise," he adds.
On the other hand, if the employee isn't performing up to snuff, you should let them know in a formal conversation or in a performance evaluation. Let the employee know what they still need to work on before they earn a salary raise or promotion, and discuss concrete steps for how you can get there. If your company isn't already conducting performance reviews, put a process in place for all employees, including remote workers. This could set the standard for when employees can expect salary increases.
5. "What can I do to get a raise/promotion?"
If an employee doesn't get a raise after asking for one, or if they want one but aren't ready to formally ask for one just yet, it's likely that you'll encounter this question. Since this type of question can come up at any time, it's helpful to have an answer ready.
Specific criteria for raises and promotions will vary by company, but Harrison recommends sharing something like: "Satisfactory job performance, of course, and showing that you are elevating us, are two characteristics we consider."
That being said, it's important to make sure that you're not overpromising, cautions Harrison: "Employers should be aware that making and breaking verbal contracts, promises of long-term pay, and guaranteed statements can be grounds for a lawsuit, and thus [managers] should be extremely careful with their wording."
6. "Why is my take-home pay different from my annual salary?"
If you have a first-time or entry-level employee, they might be curious about why the number on the paycheck doesn't equal the salary on their offer letter. Assuming there are no errors in the offer letter or in the employee's paycheck, this is usually a result of taxes, 401(k) contributions, and various other payroll deductions.
If this question comes up, simply share information about taxes with your employee. For example, you could say: "Your take-home pay will be specific to the tax forms you fill out during orientation. You will control/claim your own allowances, but you won't be able to get an exact snapshot into your take-home pay until you submit the forms and receive your first payroll," Lambert suggests.
If they still express concerns, you could direct them to websites that provide take-home pay estimates and calculations, she adds.
Salary conversations are rarely easy, but by preparing in advance for some of the most common questions employees will ask, you'll set yourself, your organization and your employees up for success. So don't wait until you're asked the question to research responses; prepare now for any salary questions that might come your way.
Your people notice when there is pay inequality at your company. Use Glassdoor's free pay audit tool to analyze compensation at your company to determine if and where pay gaps exist. To get involved in the conversation around pay equality on Glassdoor and start managing and promoting your employer brand reputation, unlock your Free Employer Profile today.