Document solid business rationale for all salary increases and cuts — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Document solid business rationale for all salary increases and cuts

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in Discrimination and Harassment,Human Resources,Leaders & Managers,Management Training

Employees who discover their colleagues are making more money for doing the same work often conclude that there can be only one reason—discrimination.

Next stop: an attorney, who will try to confirm the pay bias by comparing the employee’s paychecks with his co-workers'.

That’s why you have to be proactive, consistently keeping good records that show why you’ve made every compensation decision. You can’t rely on remembering the reason several years from now.

Recent case: Leroy Hill, a black male, lost his job when a big project he was working on ended. He sued for race and sex discrimination, alleged that two co-workers—a white female and a white male—performed the same job but had been paid more.

The employer was ready with a documented, business-based reason for the pay disparity. The white co-workers had come to their supervisors with job offers. So to retain them, management raised their wages.

The court said that was enough proof that the pay differences weren’t based on sex or race, so it dismissed the case. The court noted that Hill never sought extra money after receiving an outside job offer. If he had, he might have received an increase, too. (Hill v. Emory University, et al., No. 09-10350, 11th Cir., 2009)

Final note: Make it routine to note the reason for every pay increase at the time the decision is made. Do the same thing for any reductions in pay, benefits or working conditions.

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