Employers: Do you round the minimum, midpoint, and maximum numbers of your base salary ranges?
I asked this question via a LinkedIn poll yesterday. The top answer at 47% with 280 votes is: “Yes, to the nearest $100.” The poll will stay open for a week, but I assume this won’t change much by the time the poll closes.
I have had discussions about rounding often. Some employers like the round annual numbers because it makes it easier to communicate.
I’ve had employers say that the specific non-rounded number makes the ranges look more exact than they really are. That is true. Pay ranges aren’t an exact science.
The rounding I have fewer conversations about are the base salaries offered to new hires and those that are a result of say a merit increase.
· Do you round the base salary you offer to a new hire? Example: $72,346 vs. $72,000
· What about employees? Do you round the new base salary after you apply the merit increase % that was approved?
If you don’t round, that makes the number look like the result of a calculation. Which it is. But if you round, it looks like a specific number that a manager chose.
Does rounding impact how an employee feels about their new base salary? Sure, it does.
· It may cause an employee to think, ”I am now earning $65,000 and I appreciate the pay raise.”
· Versus the alternative, “I am now earning $64,789. That is a 4% increase from my current base salary. This is a calculation.”
It is a subtle shift. Do you want your new base to be based on a formula that feels impersonal? Or do you want it based on a number chosen by a person who is thoughtful and cares about how it feels to you?
Does it matter at the end of the day? Probably not a lot.
But each pay conversation is remembered by an employee. How a person feels after the conversation makes a difference in their relationship with their manager and how they think about their employer and themselves.
#compensation #hr #humanresources #pay #paytransparency #fairpay #payequity #compensationconsultant #rounding
Source: C3 group