The Devastating Effects of Salary Compression on Employee Engagement (Part 2)
By James T. Stodd, SPHR, SHRM-SCP
October 19, 2015
This post picks up with a continuation of a fictional account called “Marissa’s Story”, the first chapter of which was introduced in Part 1 of this series on Salary Compression and Employee Engagement.
Marissa’s Story (Continued)
A week later the sense of “inequity” and “unfairness” was still bothering Marissa, so she made an appointment to speak with Marge Simms, the Human Resource Manager. Upon her arrival, Marge happily greeted Marissa and asked her to make herself comfortable in Marge’s office. After all, Marge was very aware that Marissa was one of the clinic’s top nurses, and she naturally had concerns about anything that would bring Marissa to the HR Department.
After some small talk, Marissa began to replay the lunchroom conversation she overheard between Alison and Johanna roughly a week before, including the part where Alison and Johanna openly discussed their annual salary. At that point, Marissa could see Marge’s cheerful demeanor and complexion change as her face became more serious, even tense. After replaying that conversation, Marissa acknowledged that this matter had been bothering her for over a week, and knowing that is was unhealthy to let it fester, she decided to make this appointment with Marge to discuss it. At that point Marissa became quite blunt and asked, “So, is it true? Do Alison and Johanna get paid more than me?”
It was clear from Marge’s demeanor and expression that she was caught in a very uncomfortable position. Of course, to acknowledge the truth (that Alison and Johanna were in fact being paid more than Marissa) would just be throwing gasoline on an open flame. Moreover, she didn’t want to say anything that would imply or convey the “a nurse…is a nurse…is a nurse” attitude held by some members of the executive team who established salary policy…that wouldn’t be good!
So, rather than answer Marissa’s question directly, Marge responded first by reminding Marissa that salaries are “confidential” and that she was not at liberty to discuss what other employees are paid. Marge also went on to say how glad members of the Weyman management team were that Marissa had chosen to come to work for their organization, how pleased they were with her performance and growth, and that they have done their best, within existing policies, to recognize and reward her for her ongoing dedication and excellence. At that point, it was clear to Marissa that she was not going to get a straight answer, or a satisfactory resolution, from Marge.
During the next couple of weeks Marissa continued to serve her patients to her normal standards of excellence. But somehow the passion she previously had for her work significantly eroded knowing (or at least believing) that her superior education, experience and performance were not fully appreciated by Weyman management. Then one evening, Marissa finally responded to one of the online nurse recruitment ads that the Marsh Clinic (Weyman’s chief competitor) had been running, and she had previously ignored. Marsh was a newer organization that did not enjoy the longstanding reputation that Weyman had built over many years of service to the community. Nevertheless, the Marsh Clinic had been growing rapidly over the last several years, seemed reputable, and was well regarded as an employer by a couple of Marissa’s former classmates. “Why not”, Marissa thought, “what could be the harm?”
The next evening Marissa received a call from Marsh’s nurse recruiter, and an appointment was made for Marissa to meet with Rachel Jackson, the Marsh Director of Nursing, the following week. That interview went very well; so well, that at the close of the interview Ms. Jackson extended Marissa an offer to join the Marsh staff with a $10,000 raise in salary above what she was currently being paid at Weyman. And while Marissa had loved her work at Weyman, had made many friends, and enjoyed many fond memories, she couldn’t ignore this opportunity. In particular, she couldn’t ignore the fact that Marsh Clinic seemed to fully appreciate the superior education, experience, and high standards of care that Marissa brought to the table.
As stated in Part 1 of this series, the individuals and organizations portrayed in this story are fictional, and are not intended to reflect in any way upon any individuals or organizations that may share the same names as those used within the story. However, this fictional account does illustrate circumstances and scenarios that are played out in real life hundreds of times each day. That is, that both Marissa and her employer (Weyman Surgical Center) are victims of what is known as “salary compression,” which occurs when salary increases for existing staff do not keep pace with the realities of the market.
Salary compression inevitably results in perceptions of “inequity” that drive changes in the behavior of those who experience the inequity. Those changes are always focused on rectifying the circumstances, beliefs, or perspectives contributing to the “inequity” being experienced. In Marissa’s case, some of those changes were “internal” as her feelings about herself, and her place of employment, changed. Initially Marissa relished in the accolades that she received from management (and her peers) for her nursing excellence, and felt very proud of her accomplishments and situation. Once she experienced “inequity” however, those good feelings were replaced by feelings of being disrespected and underappreciated. Her opinion of those in leadership also changed toward the negative.
Outwardly, Marissa was driven by the perceived inequity to take a course of action designed to rectify the inequity she was experiencing. The first step was to appeal to the Human Resource Manager hoping for either information that would dispel the inequity, or action that would restore a perception of equity. Neither of those having occurred; Marissa elected to look for work with another organization, perhaps out of anger, but surely with the hope of restoring her perception of equity. So much for talent retention!
Equally important is what Marissa did not do. She did not hold back on delivering excellent patient care. Her love of patients, and her commitment to excellence, would not permit her to do that. Nor did she engage in any behavior that would undermine or retaliate against those (Alison and Johanna) who were on the receiving end of the perceived inequity. But it’s important for employers to understand that often much of the undesirable behavior we see in the workplace, including interpersonal strife, a lack of cohesiveness and cooperation, undermining or even sabotaging the apparent success of co-workers, and even legal claims against the employer, while grossly inappropriate, are often motivated largely by the internal drive to restore equity. Of course, Marissa chose the more “professional” approach.
In Part 3 of this series we will address what employers can do to “prevent” or “fix” salary compression and the perceived inequity that often follows.