Having Difficult Conversations About Pay – It’s Difficult, But It Pays Off

“We can’t afford to give you a pay increase this year.”

“Your work performance hasn’t met expectations, so you aren’t receiving a salary increase this year.”

These are hard messages, both to deliver and receive. Many times, we keep constructive feedback, “bad news,” and other information to ourselves because we are concerned about navigating the potential reaction(s) others may have about what we share.

We ask ourselves questions like “will I make things worse?” or “what if it negatively affects our relationship?” Discomfort and challenging emotions can rise in the acute moment when the interaction occurs. In the long-term, it may be just the message they needed.

Let’s think about this another way. Consider having something in your teeth and spending your day with people you care about, and whom you believe care about you, but no one says a word about the food in your teeth all day. How would you feel about that?

What about your organization not having the funding for pay increases this year? You would likely find this information important to know as an employee.

Delivering difficult news and having difficult conversations is difficult because we feel there is something to lose. Perhaps it’s our reputation, relationship, or something else that we highly value. You are not alone with these feelings! Ultimately, avoidance of any potential for conflict may sound like the better idea at the time, but conflict deferred is conflict multiplied.

Radical candor, recently updated to compassionate candor, is based on the concept of “care personally, challenge directly” as coined by Kim Scott. Compassionate candor suggests that being direct with your expectations and/or observations is the compassionate way of showing someone you care about them by allowing them to have information that will help them somehow.

The need for directly communicating important information to others becomes especially relevant in performance and compensation conversations. Going back to our negative predictions that we will lose something or damage our relationship by delivering a difficult message, studies show we tend to overestimate the negative reaction of others, referred to as impact bias.

Not all performance and/or compensation conversations need to be or will be difficult to have, but there are some which start as more challenging than others right off the bat. For example:

• Business missing revenue targets
• Lost contracts or slow-down in available work
• Organization downsizing
• Poor performance of a direct report
• Lack of funding for pay raises
• And so many more scenarios

Ultimately, humans prefer certainty to uncertainty. Keeping this in mind, here are some tips and additional advice to help difficult conversations go a little bit smoother:

1. Understand the person who you are delivering the news to and the nature of your relationship with/to them.
2. Understand why the message is what it is and why it is being delivered to this person now.
3. Practice what you will say and say it out loud.
4. Practice it again.
5. Avoid attacking or focusing on personality – have specific examples of behaviors and factual examples to support your message so it is able to be heard by the other person.
6. Lead with empathy – care personally about the person you are speaking to and challenge them directly. Say what you mean and mean what you say.
7. Explain or share relevant context to help the person understand the decision and/or where to go from this point in time.

Consider this: If you plan for or expect the worst-case scenario, what about planning and hoping for the best-case scenario too? It’s only fair to consider both sides. And then, find out for certain.