Rethinking “Fair” Pay: A Better Way to Talk Compensation

One of the most well-known workplace culture surveys (not ours at Choose People) asks team members to rate this statement:

“I am paid fairly.”

Let’s pause right there.

Be careful what you assess.
Why? Because the word “fair” is a comparison trap. Fair... compared to what?

• Compared to my coworkers
• Compared to my friends
• Compared to what I’ve heard others make in similar roles
• Compared to what I thought I’d be earning by now

You see the issue. That word—fair—is a mental slippery slope. And it’s a fast track to resentment, suspicion, and distraction.

So what should you do instead?

Here are a few guiding principles to create a healthy, transparent culture around compensation:

1. You should be able to clearly explain why one team member is compensated more or less than another.
Not in vague terms, but with actual reasoning—experience, role scope, versatility, contribution, etc. If you can’t explain it, that’s a red flag.

2. Don’t discourage compensation conversations among team members.
Seriously. Trying to ban pay discussions feels weird, controlling, and signals you’ve got something to hide—or you can’t back up how pay decisions are made. Assume people will talk. Be ready to stand behind your decisions.

3. Remember: Compensation isn’t a top driver of workplace happiness.
It doesn’t even crack the Top 8 Factors.
If you’re pouring your energy into comp adjustments as your main retention or engagement strategy, it’s likely a misfire. In all the years we’ve been helping organizations build thriving workplace cultures, we’ve only recommended raises twice—and only because people were leaving over 50 cents, and the cost of turnover didn’t make sense.

A better question to ask

Rather than asking your team if they feel “paid fairly”, consider this:

“Overall, are you content with your compensation in proportion to the value you contribute to the organization?”

Now, to be clear, this isn’t a validated research-based survey question like what we use in the Choose People Culture Audit—but it can surface useful insights. And it steers the conversation toward contribution and mutual value, not outside comparisons.

Want to go deeper on this?
Check out Chapter 14 of Culture Works: How to Crack the Compensation Code, where I dive into:

• How to Compensate for Value and Versatility
• Bandwidth Compensation to retain your best producers
• How to Determine Raises and define compensation packages
• When to let people walk (and avoid extortion)
• What to watch out for in bonuses, incentives, and commissions

And if you’re curious about how to shift money stories on your team? You might also enjoy:
How to Mitigate Money Stories

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