HR management platform
Subscribe to our Newsletter!
Thank you! You are subscribed to our blogs!
Oops! Something went wrong. Please try again.
Salary of employees - How to discuss pay with your employees
Employee Centricity

Salary of employees - How to discuss pay with your employees

Anagha Vallikat
February 13, 2024

‘Salary’!!! The word is enough to take you on a roller coaster ride. By definition, salary is a fixed regular payment, typically paid on a monthly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker. Salary of employees is a matter of paramount importance to both the employer and the employees. We really don’t have to talk much about the importance of salary. We all know how eagerly we wait for the salary to get credited on our account. You just felt that tingle just by thinking about it right? Exactly my point!

Let us now take a look at the importance of employee salaries from a psychological perspective.

A glance at Maslow’s hierarchy of needs

Since we are talking about salary, let’s stick to the two basic needs which Maslow has spoken about, namely the physiological needs and safety needs. The higher-level needs are aimed for only when the basic needs are met.

It is understood from the picture that the basic necessities are physiological and safety. It is no big brainer to understand that a major part of both the needs are inherently dependent on money. The safety needs also enlists employment as one of its components. Financial security plays a pivotal role in the lives of people and the importance of salary is quite easy to understand as we have all been there or rather ‘are’ there.

Importance of employee salary

Month ends are definitely hard on us. But the light at the end of the tunnel is the message which we are going to get from our bank saying ‘your account has been credited with ##### amount of money’. That is an emotion in itself. The pair of shoes you have been longing to buy, the toothpaste which you have been saving, the groceries, the bills, the list never ends. As an employer, make sure to understand these feelings of your employees and consider them before being harsh on them.

Discussing salary of employees with them can be tricky and can get emotional. Make sure to do it the right way with efficiency.

How to discuss employee salary during recruitment

It is always best to discuss salary during the recruitment process so that there are no confusions in the later stage. Employee salaries is a matter of extreme significance to the employer as well as the employees. Do not keep the discussions pushed for later thinking about the uneasiness. Get it sorted during the recruitment and make sure to have discussions pertaining to the salary of employees at regular intervals. Here are some tips to keep in mind while discussing the salary of employees.

1. Know their expectations

You can exceed expectations only when you know their expectations. Make an attempt to understand the expectations of the candidate who is a potential employee. Understand their position, talk about their personal commitments if they are okay to discuss it. There might be people who are tightly bound by commitments and are desperate for an income. Talk to them, communicate and get to know their needs. Accommodate their needs if you can. This way, you will not only gain a dedicated employee but also will stand out as a top employer brand. Try and establish a rapport with which you can go to the next step, which is negotiation.

2. Negotiate

Certain people will come tagged along with expectations which the company cannot afford to meet. So, do you say bye to that candidate, who is an exceptional talent just because you cannot afford them? No! This is where you should bring your negotiation skills into the scene. Do not let them go if you find them worthy. Negotiate and strike deals and talk about the worth of your company. You would have come to know about their expectations and the reasons for the expectations. You know what they have in plate for you, now is the time to talk about what you have in pate for them if they decide to be a part of your company. Strike a deal that is mutually beneficial and which can foster the growth of both the employee and the employer.

How to discuss pay with employees: Tips for negotiating employee salary

1) Know the market

Understand the market position of the job role you are offering and research and find out the industry standards of the particular position. You are definitely going to say goodbye to the talent if you quote way less than the industry standard.

2) Give a specific figure

Rather than giving a round figure like 20,000 or 50,000 give them a specific figure say 20,323 or the like. So that they will know that you have taken into consideration the income tax, other cuttings and more. This will help you in portraying yourself as a well-researched employer.

3) Be flexible

Be open to offers and try to be flexible. This reflects the personality of your company. You can cut a little slack for worthy employees. Willingness to accept the thoughts of the employees is a great quality to possess.

4) Keep a subtle tone

As the HR or the employer, you are the ultimate decision-maker about the salary of employees. However, make sure to employ a subtle tone while negotiating. The candidates are putting a lot on stake while they are negotiating. Go a little easy on them and don’t be too quick to make judgments. 

5) Talk about incentives and other employee benefits

As discussed above, ensure to give the candidate a gist about what they will be getting apart from the salary like the employee benefits. Talk in detail about the incentives and employee benefits that your company provides. The company culture speaks the personality of the company and encompasses parameters such as employee benefits and incentives. Good employee benefits can reflect on the retention rate and will also help in attracting the right talent your way. 

6) Bring in clarity

The last thing you want as an HR is to give an abstract idea about the salary and to leave the rest to the candidates. Make sure that both the employee and you are on the same page and a proper clarity is delivered pertaining to the salary of employees. 

An employee burn out is a loss to the company and a recent study on the top reasons why employees leave a company showed that the knowledge about the financial stability of a company may make the employee leave. Ensure to give your employees a proper idea about the financial stability of the company and ample reasonings as to why there has been a salary freeze or anything of the sort. Earn their trust by giving clarity over the proceedings.

Salary of employees - How to discuss pay with your employees | peopleHum

Let's now proceed to take a look at pay raises and the importance of employee salary raises

Pay Raises

HR aims to put out the best possible worth on salaries or wages while being just and competitive at the same time. As for the employees, a higher employee salary means higher standards of living and higher chances of staying with the company. 

As an employer, you hold most of the cards. Conclusively, you, as the employer can choose to decide the salary of employees. However,  if you care to value and respect the inputs of your employees, it’s worthy to listen to staff's salary needs. Being open to discussion and negotiation on salary while being firm on what you can and can’t offer can also help you to attract top talent

Pay raises can increase the motivation of your employees and will make them feel recognized and appreciated for the time and effort which they are putting in for the company. It is a way of employee appreciation and this will make them stay with the company for longer. 

Discussing Pay Raise

The employees have to understand that the salary, employee benefits, variable pay, and the like work together. In a survey conducted by  only  13 percent of respondents said that their employees understood how variable pay, salary, and benefits go hand in hand. This is a communication mishap and has to be cleared for the smooth functioning of the business.

You have to discuss in prior about the pay raise patterns and how often they can expect a pay raise. Not addressing this would just leave the employees to come at their own conclusion and that might lead to an employee burnout.

While communicating a pay raise to your employee, the best-case scenario is a win-win situation. However, announcing a salary increase is packed with details that can go wrong if you communicate the message incorrectly. As we discussed in the above sections, you have to bring clarity about the company’s compensation patterns.

Importance of Discussing Employee Salary or Staff Salary

Discussing the salary of employees with them is as important as the salary itself. You can make it quarterly, half-yearly or yearly as per your company’s size and convenience but make it a point to have a discussion about salary in a fixed interval. 

How and What to do while discussing Employee Salary

Understand if they are happy

Discussing compensation with your employees will give you an idea about if they are happy in the workplace or not. Ask about their expectations and how the work has been treating them, whether they feel that they are being recognized for their work and more.

Never Compare

Never compare the performance of one employee with another and give that as a reason as to why their pay is more or lesser than him. Be gentle and refrain yourself from starting the comparison game. This will just kill the spirits of the employee and make him/her lose interest in the job.

Give the right numbers

In the midst of all the income tax bustle and cuttings done on the salary, it might be hard for the employees to comprehend their take-home salary or why they faced a deduction on that month’s salary and the likewise. Give them the apt numbers and help them in understanding how the income tax deductions work and the other deductions which has an impact on their take-home salary. 


You need to keep a close eye on the competitors and analyze how much they are paying for similar roles and alter your pay structure accordingly or at least let the employees know why their pay is lesser or whether it will see a hike in near future. It is crucial to keep the employees informed whatever it may be.

Human Resource Management is not an easy game. It will be embedded with a lot of unexpected twists and turns.  Get some tips on Human Resource Management, and master the art today.


This is a point which most employers forget. You have got to ask the employees if they have any personal problems or sudden monetary requirements and help in ways possible by you. So, the employees feel safe and secure in your company.

Salary and Employee Retention

It goes without saying that the staff salaries has a direct impact on the employee retention rate. Employees typically consider salary as the prime motivation to come to work and to stay with a company. They will develop a certain attachment with the company who is paying them a decent amount. The benefits and the rewards come in later. By now, you would have understood why it is important to discuss the salary of employees and the methods of discussing the salary of employees.


In conclusion, the employee salary is a matter to be handled with care, precision, and concern. As the employer, you are at stake as much as the employees. Make sure to hit the right balance which is favourable for the company and for the employees. You will see a good employee retention index if you ace the salary of employees and discussing it with them.

See our award-winning HR Software in action
Book a demo
Schedule a demo
Is accurate payroll processing a challenge? Find out how peopleHum can assist you!
Book a demo
Book a demo
See our award-winning HR Software in action
Schedule a demo

See our award-winning HR Software in action

Schedule a demo
Blogs related to "
Salary of employees - How to discuss pay with your employees

Schedule a Demo !

Get a personalized demo with our experts to get you started
This is some text inside of a div block.
This is some text inside of a div block.
This is some text inside of a div block.
This is some text
This is some text inside of a div block.
Thank you for scheduling a demo with us! Please check your email inbox for further details.
Explore payroll
Oops! Something went wrong while submitting the form.
Contact Us!
Get a personalized demo with our experts to get you started
This is some text inside of a div block.
This is some text inside of a div block.
This is some text inside of a div block.
This is some text inside of a div block.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.