Compensation discussions are a chance to ensure employees feel seen, heard, and valued.
By Anne Lackey
The moment your employees start comparing notes about their pay is the moment your compensation strategy truly gets tested. It happens. Whether triggered by new state laws requiring compensation ranges in job postings or through hushed conversations in break rooms, pay transparency can either spark positive change or erupt into workplace unrest.
Manager reactions matter. How they handle these sticky situations significantly impacts employee satisfaction and retention over time. Many managers rely on carefully crafted scripts – explanations about salary variations, budget constraints, or market competitiveness. But this approach often falls flat because compensation isn’t just a transaction; it’s deeply emotional and intensely personal. These conversations carry the weight of ambition, anxiety, identity, and self-worth all at once.
So, what actually works? The most effective managers don’t rely on rehearsed lines. They listen, respond authentically, and ask thoughtful, open-ended questions without rushing to conclusions. Hotel owners and operators who want to build trust around compensation need to make a fundamental shift: Stop controlling and start getting curious.
The Conversation Behind the Conversation
Begin with a different mindset. Compensation conversations aren’t about defense but discovery. When an employee brings up pay, there’s usually more beneath the surface than just dollars. Maybe they’re feeling undervalued, overworked, or overlooked. Perhaps they just saw a colleague’s promotion, a competitive job posting, or chatted with a friend in a similar role who earns more.
A manager’s job isn’t to shut this conversation down with policy. Rather, their job is to open it up with genuine interest.
Try this simple question: “Is there anything in particular that prompted this today?” It’s an invitation to share. It shows the employee their concern matters and helps you understand what’s really happening. Is this rooted in confusion? Comparison? Deep frustration? Have they found a new opportunity elsewhere? Understanding the “why” behind the question lets you respond thoughtfully instead of reactively.
These conversations branch in many directions. The best ones stem from real inquisitiveness. Ask, “How are you feeling about your role overall?” This widens the lens. It shifts focus from a specific number to the broader picture. You might discover things you never anticipated – an employee feeling stalled in their career path, disconnected from their contributions, or uncertain about their standing within the team.
Listening Beyond the Numbers
When you hear something like, “I just feel like I’m doing more than what I’m paid for,” resist the urge to explain away their concerns. Don’t defend. Dig deeper. This is when curiosity becomes your best tool. Instead of justifying pay decisions, try saying, “Tell me more about what that looks like for you. What responsibilities have you taken on that feel beyond your role?” These questions demonstrate respect. They signal that you’re an advocate, not just a gatekeeper of the budget.
Sometimes these conversations reveal uncomfortable truths. An employee might actually be underpaid. Their questions about discrepancies might be completely valid.
When this happens, the most powerful response might be: “You’re raising a good point, and I want to make sure we explore this thoroughly. Let me follow up and get back to you with a clear picture.” Then do it. Investigate what’s possible and return with a real plan to address their concerns in whatever way is available.
The Emotional Currencies Beyond the Dollar
As business owners, you might fixate on dollar signs and forget about the range of emotional currencies that make employees feel truly valued. Money matters – of course it does – but it’s rarely the complete story of workplace satisfaction.
Think about the diverse needs swirling through your hotel daily. Some people crave autonomy, while others want guidance. Some thrive on public recognition, while others prefer private acknowledgment. New challenges energize certain team members and overwhelm others.
The most successful leaders know that compensation encompasses everything that makes an employee feel valued for their efforts. This means developing a diverse portfolio of emotional currencies to meet your team’s varying needs.
- Words That Affirm and Transform
Among your most powerful currencies? Simple words of affirmation. Your employees’ work represents a massive portion of their identity in the world. When they feel pride in your hotel and their contributions to it, their sense of self strengthens.
Train your managers to regularly express why your business matters. Share specific examples. How have employees improved guests’ lives or strengthened the community? A hotel owner who appreciates their staff’s value reinforces their employees’ individual identities in powerful ways that money alone cannot. - Growth as a Form of Investment
Stagnancy kills job satisfaction. When employees feel they’re treading water professionally, no amount of money creates lasting fulfillment. That’s why opportunities for growth and development serve as essential emotional currency in your total compensation package.
This isn’t just about formal training programs. It’s about creating an atmosphere of constant mental engagement with problems and potential solutions. Share thought-provoking industry articles. Ask for opinions. Engage in real conversations that matter. - The Time Currency: Respecting Boundaries
As business owners, many of you never stop. You likely think about your hotel or portfolio of properties constantly. But your staff can’t – and shouldn’t – maintain that entrepreneurial intensity alongside you. They have specific responsibilities, not the entire operation, on their shoulders.
One of your most valuable offerings? Respect for time and boundaries. Pay employees to be “on” during work hours, then respect their right to be fully “off” when the workday ends. There’s understandable cynicism about companies claiming, “We’re a family here.” A genuine family-like culture shows respect toward employees’ actual families by protecting personal time. - Merit-Based Incentives: The Currency of Fairness
Have you ever worked somewhere where good work went unrecognized while the unproven received perks for no apparent reason? These scenarios destroy motivation for thoughtful workers. That’s why transparent, merit-based incentive structures matter so much.
Consider giving employees two versions of key performance indicators: One establishing baseline expectations and another showing what constitutes exceptional performance. Reward those who take on greater responsibilities. Don’t take their efforts for granted.
When you establish clear KPIs for rewards, your staff understands the rules of the game. Create diverse reward options for those who excel, letting them choose what motivates them most – additional vacation time or increased earning opportunities, for example.
The Investment That Pays Off
Compensation conversations are human conversations. They demand the full range of human tools: Curiosity, clarity, compassion, and courage. Scripts offer starting points, but they should never be endpoints. True connection happens when managers show up with questions and genuine interest that make employees feel understood and valued.
As a hotel owner, create conditions where these conversations can happen productively. You and your managers require more than policies and spreadsheets – you need the mindset and skills to navigate emotions and keep discussions constructive when things get uncomfortable.
Real connections form when compensation conversations become two-way streets. When you approach with curiosity and work to understand what lies beneath the surface, you build trust. It transforms from a mere paycheck discussion into a meaningful exchange where employees feel seen, heard, and valued for everything they contribute.
That’s how you keep your team intact even in the most competitive environments.
Anne Lackey is the co-founder of HireSmart Virtual Employees, hiresmartvirtualemployees.com, a full-service HR f irm helping others recruit, hire, and train top global talent. She has coached and trained hundreds of people in creating successful businesses to be more profitable and to create the lifestyle they desire. She can be reached at anne@hiresmartvirtualemployees.com or at meetwithanne.com.
Image: fidaolga/stock.adobe.com
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