An Employee Complained She Earns Less Than a Coworker. Now What?

Last Updated Sep 20, 2011 8:57 AM EDT

Question from a reader (changed a few details for privacy reasons):
I am a dentist employing a small staff that has worked in my practice for more than 20 years. They are very loyal. Recently, I let my receptionist go and hired a new employee. My new receptionist's hourly rate is higher than the wage paid to a dental assistant. The dental assistant recently came across the receptionist's pay stub and is upset she is paid less. Apart from the obvious privacy issue, how do I approach this situation?
Running your own business is great since you get to make all the decisions without interference -- but it can also be tough, because sometimes you alone have to justify those decisions.And in a case like this, no amount of logic or reasoning may resolve the issue or hard feelings.

But you can try. Here's the best way to handle it:

1. Separate out the confidentiality issue. I don't know how she found the receptionist's pay stub; if it was less than accidental, address that issue separately. Talking about confidentiality during the same discussion as pay may cause her to feel her concerns about pay are relatively unimportant or overshadowed by her actions. Deal with the privacy problem first (if necessary), then set a time to talk about pay.

2. Recognize the emotions. Whether justified or not, your dental assistant is upset. Don't sweep her feelings aside. Start the conversation by saying, "We've worked together a long time, and you know I care about you. I want to talk about this because I know you're upset by what you found out." Make sure you let her know that you care about her, as an employee and as a person.

3. Let her vent. Once you acknowledge her feelings she'll probably want to express them fully, especially since you opened the door. While you won't enjoy it -- especially since she's been with you for a long time -- she'll feel better if she's allowed to vent. Don't judge, don't interrupt -- just listen.

4. Separate individuals from jobs. The last thing you want to do is compare people. You can compare positions, though. For example, in my area there is a surplus of trained dental hygienists and as a result their average pay is relatively low compared to national norms. If that is the case in your area, talk in general terms about how market forces affect compensation rates for the position. If you are paying your dental assistants at a level similar to those in your area, say so -- gently, but directly. And if you aren't, you'll either need to adjust your pay scales or accept she may eventually go elsewhere.

You can also talk about job responsibilities and expectations for different positions and how those expectations impact compensation. Again, focus on the position and not the person: If your new receptionist has specific skills, don't say, "She has extensive PracticeFusion experience so I'm paying her more." Instead say, "The position has significant responsibilities; one is to implement a new Electronic Health Records System."

If she's still not satisfied you may have to be more direct. Dentistry is a service business, and skilled receptionists who can make a great impression on potential patients, manage the office, handle billing and insurance, juggle scheduling, etc. are often tough to come by. Except when a patient is actually sitting in your chair, the receptionist is the hub of your practice and her interactions with patients can be the difference between a long-term client and one who never returns. Explaining to your dental assistant that the receptionist may not make but can definitely break your business may be necessary.

5. Offer possibilities. Your dental assistant wants to be paid more. Fine -- but don't just give her a raise, because that implies she has been underpaid all along. If you aren't willing to pay her more, this is a moot point; if you are, let her know what is required: additional responsibilities, additional skills, etc. Just make sure additional duties are worth paying for. Don't dream up busy work. And of course make it clear that all her current responsibilities must still be fulfilled. Additional pay should only be the result of additional work that provides a return.

6. Close. Whatever you decide, make sure it's clear. If you are willing to pay her more if she takes on additional responsibilities, lay out a plan. If you aren't, make sure she understands that you understand her concerns but that nothing will change in terms of your current pay practices. Don't create uncertainty or leave loose ends dangling.

7. Schedule a follow-up. She probably won't leave your office happy, so set a time to talk again. Say, "I know this was a lot to digest. Take a few days to think about it and let's plan to meet again on Tuesday." You'll want to follow up anyway, and that way she won't feel her issue was dropped.

Will it go perfectly? No. At best the conversation will be awkward and uncomfortable, at worst confrontational. Listen, stay objective, and always focus on positions, not people.

She may not leave your office happy, but you can make sure she leaves knowing you listened.

Photo courtesy flickr user winifredxoxo, CC 2.0
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    Jeff Haden learned much of what he knows about business from managing a 250-employee book manufacturing plant. Everything else he picked up from ghostwriting books for some of the smartest CEOs and leaders in business. He has written more than 30 non-fiction books, including four Business and Investing titles that reached #1 on Amazon's bestseller list. Follow him on Twitter at @Jeff_Haden.

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