Underpaid and Overworked: Steps to Take to Get Pay Right

It is a familiar feeling for various employees: they review their job duties and just cannot shake the nagging feeling that they are poorly paid. They give their job everything they have got, putting in long hours and extra effort. Despite this, their paycheck does not seem to reflect that.

Many employees feel like their pay is not fair compared to their workload and contributions. But is that hunch, correct? And if so, what actions can they take to address it?

Signs an Employee Deserves Higher Pay

Recognizing and rewarding employee contributions is essential for maintaining a motivated and engaged workforce. One critical aspect is ensuring that employees receive fair pay for their efforts. But it is not always easy to determine when an employee deserves higher pay. Diverse factors come into play, from individual performance to market conditions.

Understanding the signs that indicate an employee merits higher pay can help companies make informed decisions and retain top talent.

• Excellent performance and output.

Companies must pay employees who consistently exceed expectations and targets. An employee who takes on extra tasks, mentors others, or implements efficiencies that reduce costs must have higher pay. Regularly exceeding sales targets, improving customer satisfaction scores, or launching successful new products are obvious signs of a valuable employee.

• Loyalty and low turnover.

Employees who have been with the company for years have a proven track record of success and loyalty. Long-term employees develop valuable institutional knowledge and relationships that benefit the company. When an employee has rejected other job offers to stay, it shows their commitment. It also signals that their pay may not match their true value.

• New skills and certifications.

Employees who upgrade their skills show an ongoing commitment to growth and excellence. Additional skills and credentials enable employees to take on more complex work and greater tasks. Investing in new skills is a sign the employee deserves greater pay.

• Morale and motivation.

Paying employees below their true market value often leads to decreased motivation, morale, and loyalty. While small pay gaps may not severely impact motivation, large gaps can undermine an employee's sense of value and appreciation. Getting pay right for valuable employees is vital to sustain motivation, engagement, productivity, and retention. The alternative is often greater costs associated with high turnover.

Keeping pay aligned with the value of key employees is simply good business. It is crucial for companies to ensure their pay plans recognize and reward the efforts of their dedicated team members. The skills, experience, loyalty, and performance of these employees have a significant impact on the company's bottom line. Providing fair pay is a key to sustaining a motivated, productive workforce.

How to Have the Discussion with Underpaid Employees

Navigating discussions about pay with underpaid employees requires sensitivity and clarity. Here are the steps managers can take to have a meaningful discussion with underpaid employees:

• Set a meeting and prepare

When an employee believes they are receiving below-market pay, it is important to address it promptly. Managers must schedule a private meeting and approach it with an open mind. Conducting research on industry standards for the role can provide factual context. Make sure to come prepared to listen to their concerns.

• Allow them to share their perspective

Allow the employee to share why they feel undervalued. Managers must listen to understand their position and concerns. Asking follow-up questions ensures they have the full picture of how the employee came to this conclusion. When disagreements occur, managers must show empathy for their feelings.

• Share your perspective

Managers must explain how their pay is determined and share research to confirm fairness based on industry standards. They must be transparent about the thought process behind pay decisions. Managers must also highlight employees’ strengths and the value they add. Any opportunities for growth that can impact pay in the future must also be included.

• Discuss potential solutions

When deemed deserving, managers must discuss options for higher pay such as a raise, bonus, or extra vacation days. They must explain what the employee needs to achieve for that to happen. When the employee’s pay is fair, managers must revisit in 6-12 months. They can also ask about other ways the company can support the employee. The key is finding a solution both parties are satisfied with.

• Commit to revisiting the conversation

Regardless of the outcome, managers must commit to reviewing pay and career growth regularly. Follow-up meetings can help check progress and discuss new opportunities or salary adjustments. Making pay discussions an ongoing dialogue will help create a fair, supportive work environment.

How Companies Can Get Pay Right

To get pay right, companies need to evaluate their pay practices and adjust as needed. Conducting a pay audit is a good first step, which involves reviewing current pay levels for all roles to determine whether there are any inequities. When certain groups receive below-market pay, the company can adjust to close the pay gap.

Providing transparency around pay scales and salary bands is another major step. When employees understand the criteria used to determine pay, it reduces feelings of unfairness. Companies must clearly convey the salary range for each role. They must outline the factors that determine where each employee falls within that range to help set the right expectations.

Reviewing pay packages helps keep companies on track. Regular evaluations allow the company to make sure pay remains fair and competitive. When salaries have not kept up with inflation or market rates, companies can adjust as needed. It is an opportunity to take another look at pay equity and make any necessary corrections.

Creating a pay philosophy that balances both internal and external equity leads to the most fair and workable solutions. Internal equity means paying similar salaries for similar roles within the company. External equity means offering pay that is competitive with industry standards. Combining these approaches helps motivate and retain top talent.

By reviewing pay practices, providing transparency, and aiming for internal and external equity, companies can get pay right and help them avoid unfair pay issues. When employees receive fair pay, it leads to greater job satisfaction, productivity, and retention. And that will be well worth the investment for companies to regularly review their pay strategies.

Conclusion

Employees who feel underpaid and overworked must not suffer in silence. Doing thorough research, knowing their worth, and being prepared to negotiate is crucial. It is important to remember that the squeaky wheel gets the grease. Employees must not be afraid to speak up for what they deserve. With persistence and courage, employees can attain fair pay and reasonable workload, enhancing job satisfaction.