Universally speaking, money is an uncomfortable subject – be it with friends, family or in the workplace. In fact, the “pay” conversation that managers are required to have with their employees might be one of the most dreaded talks of the year!

Managers have the very sensitive responsibility of playing middleman between HR and employees to discuss everything from raises to bonuses (or lack thereof). They have to follow strict guidelines regarding pay, but they also want to keep their teams happy and engaged. So where’s the sweet spot?

1.   Always provide context. According to Office Vibe, 77% of employees believe that pay decisions are made on poor information and 50% of employees believe they are paid below market rate, when they are not. Taking time to explain the “why” behind the number will help put things into perspective.

2.   Be mindful. Pay is a highly sensitive subject, so relaying the wrong information, or even expressing the right information in the wrong way can contribute to your employees losing trust. When you discuss someone’s worth and value there are feelings involved, so managers need to be able to give a thorough explanation.

There is often a huge disconnect between reality and perceived reality when it comes to pay. The consequences of this lack of transparency could be that employees leave your company in search of what they think is better.

Pay is a crucial component of engagement because it’s not just a number; it’s an emotional measure reflecting how valued an employee feels by their employer.” Harvard Business Review