Compensation · Building a team

Company policies about employees talking about compensation?

Gabe Ripley Owner, TattooNOW, Off the Map Tattoo, and Tattoo Gathering

February 25th, 2016

The title is pretty self-explanatory. I have employees talking about compensation and one is suggesting the coworkers are getting unfair deals . I usually err on the side of transparency but this employee is attempting to drive a wedge between a very talented artist and our company. I'm revising our company policies as we speak and wonder if it is worth including a clause about employees not discussing compensation or just trusting the organization... Maybe everyone is being treated fairly so anomalies like this will ultimately sort their way out? Or is it the policy that fixes this issue?

Thanks in advance

Peter Accorti Director of Sales Engineering at Resonate

February 25th, 2016

Personally I think a policy is a bit of a stretch here.  If people want to talk they'll talk.  A policy of, "trust the company" also strikes me as a bit odd.  First it's not really a policy but a belief.  I don't see how it's enforceable or anything like that.  I do wonder if you have a problem employee though.  I don't think you need a policy to talk to a person about divisive behavior.


Dale Cook CTO at Voxy

February 25th, 2016

If you are in the US you cannot prevent employees from discussing their salaries - it's illegal to do so on a Federal level. That said lots of companies have these clauses but they are unenforceable, and reprimanding or firing an employee because of it can, and probably will, cause you trouble.
This seems much more like issue of management and no amount of policy setting will fix this.

Martin Omansky Independent Venture Capital & Private Equity Professional

February 25th, 2016

Employees will talk anyway. Transparency, therefore, is best policy. Sent from my iPhone

Joe Albano, PhD Using the business of entrepreneurialism to turn ideas into products and products into sustainable businesses.

February 25th, 2016

Employment policies are tricky and influence your culture in more ways than you might imagine. The point is that although you MAY be able to do it - consider the bigger question: Is it a good idea to do it? 

If you are in the US you may want to read:

Beyond that, policies like what you are suggesting may do more harm than good, inhibit discussions that you want to have happen, drive workers away, and imply that you have something to hide.

Leadership means handling difficult relationships, challenging conversations, and hurtful feedback. What is your organization doing to increase its capabilities there? 

John Seiffer Business Advisor to growing companies

February 25th, 2016

You can't fix every problem with a policy. And I'm not sure from your description what the cause of the problem is. No matter what you do you can't please everyone. 

Curtis Guilbot Executive Agile Coach

February 25th, 2016

Gabe, both Peter and John make excellent points, and I echo them.  I've also run a company with a similarly disgruntled employee, and we took very specific steps to remedy the problem.  But your challenge is twofold:  dealing with the current employee in question, and also setting up preventative measures (not necessarily policy; it could be cultural change, staff training, 1x1s, etc.).  As founder/CEO, your time is valuable, and you must decide whether this employee's talent is worth all the time and aggravation it's costing you.  If it is, that is, if you find him critical to the business, then you may have another issues, which is proper staffing/training of your organization. No single employee should cause you this much disruption. For resources, Herzberg wrote the seminal work on employee motivation; Dan Pink's book Drive is an easy-to-read distillation of scholarly research.  Clearly something more than salary is troubling this employee; if you cannot get at the heart of his concern quickly, then I recommend you backfill the post and cut bait.  If you'd like help with these problems of growth, reach out to me.  I'm happy to help, Gabe.

Stefan Pagacik Innovation Catalyst | Impact Platform Development, Finance and Human Capital Advancement

February 25th, 2016

Gabe, I really think you have answered your own question. You have identified the staff member as being disruptive and a problem for your other staff members. Despite the fact that this staffer is 3000 miles away, it is incumbent upon you to take action as directed by your employee handbook (you do have one, don't you?). There should be something in your handbook that addresses employees who are disruptive to other staff members. At the very least, you should have a one on one with this employee to find out his/her true motivations for being disruptive and to find a solution, be it probation or termination. I don't think compensation is the sole problem here. There is something else going on. You need to find out what it is and address it quickly. If this employee has a manager, you need to include him/her in this discussion. I don't think a policy regarding discussing compensation will either be effective or necessary. You can however have a policy of discussing sensitive internal company information that includes but is not limited to: compensation, intellectual property, customer information, documentation, financials, etc... Hope this helps and best of luck. Stefan

Randi Brenowitz Principal at Brenowitz Consulting

March 18th, 2016

There is no way to stop people from talking about their own compensation.  It's their business and they are free to tell anyone they want.  The only solution here is to have an equitable compensation policy and stick to it.  Once you make an exception for someone who is leaving, or someone who "needs" the money  more, you set yourself up for problems.  On the other hand, some jobs and some skills simply pay more than others and that is how it is in the world.  You can defend that.

The question I would ask is why this might be happening - do you have a disgruntled employee? do you have a culture that does not instill trust? have the employees had reason to mistrust management? The long term solution to your issue is to build a culture of trust within your organization.

Alexander Lau Lead Programmer/CEO of Robotic Potato Games

March 18th, 2016

Gabe Ripley:
All of your ideas are terrible. STOP.
This is not a situation you can fix with rules or flexing your 'boss muscles'. By trying to 'assert your authority and end the talking' you are just digging a very deep hole for yourself.

You need to address this issue on an individual level by talking directly to the employees or employee in question.
Why are they saying that the pay is not fair? Is there anything you can do to fix it? Is your pay fair according to market standards? If so, give them links.

Is it not fair? Then reveal the arrangements you made. Tell them why you paid someone what you did.

In the end, you need to tell them they are paid what they are paid for X reason- and if X reason is not good enough, they are free to go. And if they are there temporarily until something better comes along, that you understand and would appreciate a warning if they do decide to leave. 

If you're being reasonable on this, it should be fine. On the other hand, you might have someone who is a troublemaker, and it might be best for you to just get rid of this person. Someone who is a rumor monger/bully might be causing other problems in your business as well.

Gabe Ripley Owner, TattooNOW, Off the Map Tattoo, and Tattoo Gathering

February 25th, 2016

I don't mind as much them talking about their deals with us, but sowing the seeds of "Your deal isnt fair". I did read up a little more and it seems a company may be able to stop them from chatting about it on company time, but I am not looking to curb the talking about their compensation, as much as being divisive and splitting the staff off from the company. The co workers are comfortable and think our arrangements are fair, so it doesnt seem like damage is being done, but the location is 3,000 miles from our HQ, so it is tough knowing a team member is actively calling our company unfair...

I would agree then that policy wont work, and dealing with the employee about the negative behaviors is the solution. Our company has grown, and quite a few problems have come out of our lack of a "no romance in office" policy, and so now that we are tightening things up will have one. The company has grown quite a bit so knowing what things need to be policy and what needs to be managed is crazy.

Also thank you for your insightful answers.