Do you know how pay works at your company?

The answers are blowing in the wind…
The answers are blowing in the wind…
Image: Reuters/Marcelo Del Pozo/File Photo

It’s rare for companies to provide much transparency about how they make pay decisions, often out of paranoia about what will happen when everyone has this information. It reinforces a culture of ambiguity. In my years working in human resources, I’ve found that this typically leads to a culture of ambiguity, which hamstrings not only employees trying to request a raise, but the team leaders who field their requests. Too often, managers are put in the impossible situation of weighing in on a process they don’t control and know little about.

 To prepare for the inevitable moment when an employee wants to talk about raises, managers should make sure they can comfortably answer these 10 questions about how pay works at their companies (and it can’t hurt for non-managers to understand these dynamics as well). 

  • What is the company’s compensation philosophy?  
  • Who determines that philosophy (executive team, compensation committee, etc.)?
  • What do we invest in our employees as part of their “total rewards,” such as benefits and bonuses?
  • Do we pay at, above, or below market rates overall? How does this differ across the organization? 
  • When and how often do we give raises? 
  • How do we determine what’s allowed for raises across the company—that is, are raises based on revenues, specific company-wide performance goals, or individual goals?
  • When was the last time a job analysis (confirming what the role is) or a job evaluation (confirming what it should be paid) was done for your department, team, or roles you manage?
  • For each employee, you’ll also want to be armed with this information:
  • What is their classification/band and the corresponding salary range?  
  • Where are they in the salary range?  
  • What is their raise history?
  • What is the company’s stance on pay transparency? (New York State and Colorado already have passed mandates for employers requiring transparency)
  • How large is the organization’s pay gap for women and people of color?

If you can’t answer these questions, ask your organization’s senior leadership or human resources department for a meeting so they can fill you in. Because these topics can be tricky, be sure to take good notes and summarize what you learned back to them in an email to ensure you’re passing along the correct information to your team members. This preparation will go a long way toward ensuring more productive pay discussions when the time comes.—Anna Oakes

Five things we’re reading this week

Some job postings in China are specifying that covid survivors need not apply. Chinese authorities have gotten wind of this employment discrimination and have promised to curb it.

Design in the UK is still largely a man’s job. Some 77% of the country’s estimated 1.6 million designers identify as male.

How New York City eateries are pulling off Restaurant Week. At a time of record inflation, the summer tradition is even more challenging than usual.

Google’s new smart glasses won’t make you look like a creepy cyborg. The tech giant’s second attempt at the smart glasses market will be far more powerful than its first.

Corporate greenwashing is getting harder to spot. Let Quartz show you how to identify it.

30-second case study

Starbucks recently announced it is closing 16 US locations, including two that are unionized and one that had scheduled a union election. It closed another unionized store in June, citing concerns about the coffee shop’s faulty grease trap as well as problems with staffing. Chipotle, meanwhile, says it’s closing a location in Maine that had recently announced plans to hold a union election—the first of the burrito chain’s restaurants to attempt to organize. 

Neither company is tying its actions to labor organization efforts. Starbucks cited concerns about crime and other community safety issues, while Chipotle attributed its shutdown decision to chronic under-staffing at the restaurant. But labor history suggests there’s good reason to wonder whether companies have ulterior motives when they decide to close stores during or after organizing drives. 

Sure enough, Starbucks and Chipotle workers affected by the closures have filed unfair labor practice charges with the National Labor Relations Board, arguing that the closures are both retaliation for organizing and an attempt to discourage employees at other locations from unionizing.

The takeaway: The reason closing stores has been an historically successful union-busting tactic is that workers usually want to keep their jobs. If they can be convinced that they have to choose between unionizing and their livelihoods, many will decide to give up the union fight.

But Joe McCartin, a history professor at Georgetown University and the co-author of Labor in America: A History, says the calculation may be different for the young workers powering the Starbucks organizing campaign and other big service-industry union drives, who seem “willing to take more risks than blue-collar workers in the 1970s.”

Back in the ‘70s, he points out, a manufacturing job was the ticket to a secure middle-class life. “If it had wages and benefits that couldn’t be matched, people were reluctant to take a risk,” McCartin says. “I’m not sure that’s true for these workers.” Between student debt, higher housing costs, and rising but frequently still inadequate wages, today’s young people are less likely than older generations once were to feel they have a path to financial security. That also means they have less to lose by unionizing—which means corporations might find that familiar scare tactics aren’t as effective as they used to be.

That said, it’s expected that the NLRB, which is understaffed and has a large case backlog, will take a while to process the complaints. So companies looking to discourage union activity by closing stores may calculate that they can at least attempt to achieve the desired effect well before they get in trouble, if they do at all. “The nature of our labor law now, it actually makes financial sense for companies to break the union law, stifle the drive, and be found guilty,” McCartin says. “The most they have to do is pay these employees back wages minus whatever they’ve earned in the intervening time” if they found other jobs after the closing.

Read more in Quartz senior reporter Sarah Todd’s recent article: Are Starbucks and Chipotle union-busting by closing stores?

Editor’s note

The Memo is taking a well-earned sabbatical! This weekly newsletter won’t be published in August. Instead it will be busy taking stock of its life and perhaps dabbling in music lessons or a foreign language while spending fewer hours on social media. See you again in September, refreshed and ready for our next phase.

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