Your employees are your business, so ignore the following truths at your peril:
1. Policy, schmolicy: Employees talk. Many companies actively discourage staff from talking to each other about their salaries.Never assume raises, bonuses, starting salaries, perks—basically anything related to compensation—will stay confidential.
2. They think about their pay a lot more than you do. Unless your business is struggling, to you employee pay is a one-off market research activity or something you consider when it’s time to prepare your expense budget. Otherwise checks get cut, people get paid, and it’s business as usual.
3. They’ll let you take advantage. Occasionally the job market is a seller’s market, but most new employees are just really happy to land the new job. Never take advantage of a naïve or desperate employee. The gain is never worth the pain.
4. They don’t care about pay scales. Pay scales are like a pacifier to a big company. Falling back on pay scales is often the easiest way out of a difficult discussion about pay.
5. When you negotiate, you both lose. Why? Employees lose if only because they resent justifying a certain pay level; in their view you should already know their value. You lose because at some point you may have to say, in so many words, “I’m sorry, but you’re just not worth that much.”
6. No matter how much you pay, it’s not enough. We all grow accustomed to what we have. A big new house eventually seems normal. The effect of a big raise eventually wears off; eventually, that raise is just pay as usual.
7. Reasonable pay is okay. Employees are smart. They understand market conditions, financial constraints, revenue shortfalls, and increased competition. They understand when you can’t pay top-of-market salaries. What they don’t understand is when they don’t feel fairly compensated compared to other employees in similar positions, both inside and outside your company.
Respect, recognition, and a sense of real purpose last forever.
via Inc.