Thoughts??

[firefightn15]

Employee comes to me and says that after the last raise (4months ago), he was given .75 an hour more than the rest of the employees (I checked this out with HR and he's right). This employee has been here the least amount of time but gets credit for finding this out and telling me. Now I'm in a bind because the others know what he makes. The way I see it, I need to do one of three things:

1. Explain to him that I appreciate the fact that he was honest, but that I need to bring him back down to scale with the rest to be fair with the others.

2. Bring everyone else up .75

3. Explain that I appreciate his honesty but that I need to lower him .25 and bring the others up .50 to keep everyone (8) at scale.

Any other ideas?

[5bass]

Fire 'em all and hire a new crew at minimum wage.

Seriously though, number 3 sounds fair enough if your company can afford it. People need a little extra loot these days.

[preach4bass]

Have a meeting and explain the situation to EVERYONE.  Then, tell them how you've decided to handle the situation.  Any of your three options sound fine, but just let EVERYONE know what's going on.  If you communicate with them they'll respect you.

[firefightn15]

Thanks guys; honestly FBL if I went with your first thought, I don't know if I would be able to run fast enough.  I'm not quite as agile as I used to be. ;D

[hjerk24]

He should be commended and as a Boss I'd be very proud that he was honest. To have an employee like that is very commendable, and I'd imagine he's a valuable asset to your business.. With honesty like that he should be understanding that he belongs where everyone else is accordingly based upon your details. Easy to say, but harder to go backwards as the employer. If you could bring all up .50 and him down .25 that'd be cool, but if financially not dooable, then righting the mistake is the way to go, and to keep peace.

Let us know how it works out.

[J Francho]

#3 is probably the right choice, but isn't  this an HR issue?

[moby bass]

#2 first, if possible.  if not, then option 3, If not possible.  last resort is option #1.  But the employee is still to be commended. 

[fourbizz]

Option 1 = free

Option 2 = $210 a week more

Option 3=  $160 a week more

If fifty dollars a week is worth knocking the guys pay for his honesty, then go for option 3, if it is not, go for option 2.

[firefightn15]

#3 is probably the right choice, but isn't this an HR issue?

Except for the fact that I am the one that set their wages and rate the performance of each, it is an HR issue.  The issue I will have is on the floor if HR doesn't get it right, so I feel responsible in getting this righted.  In talking with her, I found what had happened was that when the raises were put into the system, this individual accidently was grouped in with a different department.

[Big Mike in Fl]

this is why employees should not know what each other makes (I know, everyone knows what everyone makes in reality) first, I'd find out if there is a valid reason for his higher pay rate (more initiative, more experience, more education etc etc), if not (mistaken increase), then I'd look at adjusting everyones salary accordingly (option 2 preferably, but if not, option 3), if there is a good reason for him making the pay he does , I'd leave things as is and explain to everyone the reasons behind this (turn it into a motivation for the other employees to do a better job, which will directly affect their pay) also explain that from this point forward, there is to be no farther discussion on everyones pay.

An employees wage is a contract between that employee and the company,and should be strictly confidential.

EDIT: change all my his', to hers... didn't realize it was a woman till after I read your last post.

[Long Mike]

If your company is doing really well and the budget is flexible, then option three would be the best solution.  On the other hand, in this economy, option one is probably the best recourse.  The big problem seems to be with HR.  Find out who the bonehead was and make him/her come to your department and explain the stupid mistake.  It's been my experience that HR establishes the guidelines for salary increases (for example, 4% for your entire department.)  It's up to the department manager to allocate those funds to each individual.  Perhaps 6% to the better performers and 2% to the less productive.

[Lund Explorer]

Employee comes to me and says that after the last raise (4months ago), he was given .75 an hour more than the rest of the employees (I checked this out with HR and he's right). This employee has been here the least amount of time but gets credit for finding this out and telling me. Now I'm in a bind because the others know what he makes. The way I see it, I need to do one of three things:

1. Explain to him that I appreciate the fact that he was honest, but that I need to bring him back down to scale with the rest to be fair with the others.

2. Bring everyone else up .75

3. Explain that I appreciate his honesty but that I need to lower him .25 and bring the others up .50 to keep everyone (8) at scale.

Any other ideas?

Only option #1 works.  This employee brought it up because they knew it was a mistake.  The other employees supposedly know it was an error, and most likely figure you are going to fix it.  If not, they would be up in your office complaining.

Best case - The employee accepts it, and life goes on.

Worst case - The employee gets mad and leaves.  In this economy, they may be fairly easy to replace.

One of the very hardest parts of being "The Boss" is dealing with employees.  A fair employer (and you must be if the issue is bothering you) wants to try to do what is right for all of their workers, while still making a livable earning themselves.  In good times, employees should be rewarded for their extra efforts.  In hard times, everyone needs to shoulder part of that burden.  The best reason for any employee to get a raise is because they took on more responsibility or learned extra skills your company needs.  Fair employees understand these concepts.

It really sounds to me like all of your employees are fair minded.  And I figure they are waiting to make sure that you will be fair about this as well.

So my suggestion is to go with option number one, with just a slight change.  Maybe add a bonus check to each of the other employees to cover the mistake.  Maybe holding an employee meeting to explain the error and how you are planning to deal with it.  But before that meeting, try to figure out a set of goals the employees could meet to get that $.75 raise.

Of course all of this is just an opinion.

[cart7t]

1. First, why is this employee even talking about his pay raise to begin with.  It's just not the norm and in some companies, against policy.

2. Are the current employees on a pay scale?  New hires are often hired in at the lowest scale and the furthest from the top cap of a given pay scale.  Many companies have a non-linear pay raise plan in place.  The closer you are to the top cap of your total, potential pay scale the less money you're capable of receiving come raise time.  If this employee was at the bottom of said pay scale, his potential to receive a higher raise is more than other employees who are currently being paid a salary or hourly wage closer to the top cap.  Overall the tenured employees are still making more than the new hire.

3. Some companies have an arbitrary pay raise system that allows only a percentage of total employees at a location the ability to receive more than the standard raise the company is giving to 90% of the employees.  In other words, in a given work place with the company only giving 2% raises this year, only 1 employee can be deemed worthy of a 6% raise and one of a 4%.  Then it comes down to how management wants to make that arbitrary decision as to who gets the better raise.  That could be based on merit or as trivial as favoritism.

4. Before dropping his raise, find out all the facts first.  The best cure to turning a motivated employee into a non-motivated one is to take away a pay raise after he's already received it.

[Uncle Leo]

I really do not know the skill set required for these folks nor the criteria for placing them in a wage scale. This is how you need to approach this.

1) Understand the wage scale, is it based solely on time in service, hopefully not, or based strictly on skill set then performance based, preferred method.

2) Once the wage scale is understood this may allow for a better understanding of why this man is paid more or why he is overpaid.

3) It his skill set dictates that he should be paid more perform a special performance review with the the co-workers. Set goals for them to strive for and a time period to accomplish these goals. If the goals are met it will be a win-win situation both for the co-worker and the company in a monetary sense. Have HR clearance for this. If not then truly the only problem you have is to hold this co-worker accountable for his pay scale. Being paid more means his performance in all disciplines exceed all expectations, as this mistake is not yours this is the best way to handle this.

In the past I have been faced with these types of situations and have handled it in this manner. In the end everyone benefited.  At times it meant that some were replaced but for the most part this was a good team building exercise and paid dividends. Handled correctly this will provide an outstanding outcome.

Make sure these goals are SMART Goals.

S= Specific

M= Measurable

A= Attainable

R= Relevant

T= Timely

Hope this helps Brian.

[firefightn15]

Thanks for all the input guys, each comment has given me different takes and enough to chew on for a couple of days.  I'll let you know how it ends up.

[ilovefooffur]

I'd go w/ #2.  Tis the season.

[SmokeRise1]

Option #4  Find out who is responible for disclosing all 8 employees wages and make him figure out a resolution.  If all employees aren't satisfied with his plan, deduct .75 from his wages. 

It won't make everyone happy, but it will discourage individuals from comparing their wages.

[firefightn15]

Option #4 Find out who is responible for disclosing all 8 employees wages and make him figure out a resolution. If all employees aren't satisfied with his plan, deduct .75 from his wages.

It won't make everyone happy, but it will discourage individuals from comparing their wages.

No disclosure on management's part, just 2 employees sharing payroll info. :

[Tin]

The New England way of doing things...

Lay everyone off, hire all illegal immigrants for nickels and dimes. Several companies have been caught doing this including one that employed over 100 last year. They are using the "tough times" reason to lay off then bring back illegals. 

Seriously, I like #2, if it is not possible, go with #3.

[hjerk24]

Any updates yet?

Kinda curious here.

[firefightn15]

Yup, I actually decided on what to do yesterday.  This company had a bit of a rebirth back in February with new ownership.  I've talked with this employee and explained that I was glad he made the choice to bring this to me and that it showed good character on his part.  With that, I have decided to consider this a bit of a fresh start being that the new fiscal year is at our doorstep, and bring the others up 50 and him back 25 so they are all on an even field for now.  When the time comes I will talk with the crew and explain what I have done as well as what I expect from them. 

Again, I appreciate everyone's imput on this.

[hjerk24]

Sounds like it has all worked out.  That's cool.

Congrats.