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The issue of compensation rarely comes up at the right time. One employee has received an outside offer with a 12% raise. Another is comparing their compensation to that of a colleague. A third has salary expectations that exceed what you can offer. For many managers, these moments remain among the most uncomfortable aspects of their role, precisely because they’ve never really been trained to handle them.
Yet salary decisions are a managerial responsibility in their own right. It is neither a salary negotiation to be “won” nor a confrontation to be avoided. It is an exercise in clarity, integrity, and fairness. With the European directive on pay transparency, employees will have greater access to information about their compensation, and companies will be required to justify pay gaps exceeding 5%. In practical terms: more specific questions from better-informed employees on topics where you won’t always be in control.
In this article, you'll find practical guidelines for handling these conversations effectively: understanding what determines compensation, managing difficult situations, and choosing the right words without making false promises.
A successful salary discussion isn't one where the employee leaves satisfied with their raise. It's one where they leave with greater clarity, a clear framework, and a relationship that remains intact. A successful discussion isn't one without frustration—it's one without ambiguity.
The way you present yourself matters just as much as the content. A manager who apologizes or beats around the bush sends an unintended message: he or she implies that the decision is unfair, even when it is perfectly justified. Conducting this conversation with confidence shows that the framework is solid and that the decision is defensible.
Communication about salary remains one of the least-practiced skills in management. Talking about money is a deep-seated taboo in many professional cultures, and France is no exception. This discomfort is normal. It becomes problematic when it prevents clear conversations, because it is precisely this silence that fuels speculation and resentment.
These conversations often take place during the annual review, but they shouldn't be limited to that. Addressing salary issues consistently throughout the year helps prevent everything from piling up into a single, high-pressure discussion.
Added to this is a rapidly changing landscape. The European directive on pay transparency will change the rules of the game: salary ranges posted at the time of hiring, access to compensation criteria by category, and a requirement to justify pay gaps between women and men. Managers will have to answer more specific questions, with less leeway.
Before entering into a salary discussion, you need to fully understand the factors that determine an employee’s compensation level. This isn’t just a technical detail—it’s the foundation of any credible explanation and any confident stance.
Compensation is based on four main components: the job and its sector-specific market rate, level of seniority, length of service, and the company’s financial decisions (overall budget, bonuses, profit-sharing). Every compensation decision is in line with the company’s compensation policy. Explaining this clearly means moving away from personal opinions and focusing on the facts.
One of the most common misconceptions is equating excellent performance with an automatic right to a raise in base pay. Performance may result in a bonus or variable compensation. It may justify differences within the same pay band. But it does not automatically trigger a review of base pay, unless the job responsibilities have changed in a structural way.
Salary decisions are subject to several biases that are worth understanding. The recency bias leads to giving greater weight to recent events than to the entire period under review. The halo effect allows a single standout characteristic—such as verbal fluency—to influence an overall evaluation. Assertiveness bias leads to giving larger raises to those who explicitly ask for them, even if others objectively deserve more. According to the Audencia-KPMG Professional Equality Barometer (2025), 48% of women do not dare to ask their manager for a raise, compared to 28% of men. This bias has a direct gender dimension.
This situation is best handled using a two-step approach, without trying to soften the news before delivering it.
First, the decision, stated simply: “In agreement with management, we have decided to grant you a raise of X%, which corresponds to a gross annual salary of Y euros.” The decision comes first. No preamble.
Here’s the explanation: “I realize this is less than what you asked for. The main reason is that the budget for raises is limited this year and your compensation is already in line with the market.” A useful point of reference: the average raise for executives in France was 1.8% in 2025, according to the APEC Barometer. Sharing this figure helps put the decision in the context of objective economic reality.
A pay gap does not mean injustice. That is the message we must convey, and the stance we must take. Pay gaps can be justified by the market value of a rare skill, by different levels of seniority, by longer tenure, or by historical financial decisions. Explaining the situation with this level of precision prevents the gap from being perceived as an implicit hierarchy among people.
What to avoid: comparing people to one another. We compare positions based on a pay scale and the job market. “It’s not a matter of individual merit, but of demand for certain skills.” This phrasing refocuses the conversation on objective criteria.
When an employee presents a sector-specific study, the response is to put the comparison into perspective: the same job title does not always refer to the same role. Salary ranges vary depending on the sector, scope of responsibility, and business model. “Information about the external market is useful, but it is not the sole factor determining compensation.”
Herzberg's model provides a useful framework. Salary is a hygiene factor: if it is insufficient, it leads to dissatisfaction. If it is adequate, it does not, on its own, create lasting commitment. What motivates people are real responsibilities, a sense of accomplishment, and opportunities for career growth. These factors are not included in a salary counteroffer.
When an employee receives an offer from another company, there’s often more to it than just the number. Start by exploring the actual situation: “How do you feel about your role right now? What still motivates you here?” If a solution isn’t possible in the short term, be clear about what you can offer. “A one-time raise is attractive, but it doesn’t guarantee more fulfilling career growth over time.”
An employee who does outstanding work within their current scope of responsibilities deserves recognition. But that recognition does not automatically translate into a raise in base pay if their responsibilities have not changed structurally. “You have more autonomy, and that’s recognized. But the scope of your position hasn’t changed. It’s your seniority that’s advancing within the pay band.”
If the desire is genuine, the right approach is to map out a path together. Work together to define the criteria for advancing to the next level: what skills are missing, and what new responsibilities might justify a promotion? It is this dialogue that sustains commitment over the long term.
Some situations are objectively inconsistent: an employee rated below the minimum for their pay band, a discrepancy resulting from a merger, or a decision made under time pressure. Take the time to assess the actual situation before responding. Even if you didn’t cause it, your role is to acknowledge it and set a course for correction. “Right now, this situation isn’t consistent with the framework. I can’t fix everything immediately, but I’ll get back to you with a clear answer.”
Keep in mind that a local compensation decision always has a collective impact. Make your decision as if another manager were going to have to explain it. That is the key to collective fairness.
Apologizing for the decision. This unintentionally amplifies the sense of injustice. A confident stance means the framework is solid.
Promising what you can't guarantee. Saying, "I'll bring this up with HR and we'll change that," creates expectations that are impossible to meet. Say what you can do, and stick to it.
Treat each situation as an exception. When it comes to salary decisions, an exception today becomes an inconsistency for someone else tomorrow.
To take it a step further, check out the best practicesfrom Alma, Vinci Construction, and Doctolib.
The issue of compensation rarely comes up at the right time. One employee has received an outside offer with a 12% raise. Another is comparing their compensation to that of a colleague. A third has salary expectations that exceed what you can offer. For many managers, these moments remain among the most uncomfortable aspects of their role, precisely because they’ve never really been trained to handle them.
Yet salary decisions are a managerial responsibility in their own right. It is neither a salary negotiation to be “won” nor a confrontation to be avoided. It is an exercise in clarity, integrity, and fairness. With the European directive on pay transparency, employees will have greater access to information about their compensation, and companies will be required to justify pay gaps exceeding 5%. In practical terms: more specific questions from better-informed employees on topics where you won’t always be in control.
In this article, you'll find practical guidelines for handling these conversations effectively: understanding what determines compensation, managing difficult situations, and choosing the right words without making false promises.
A successful salary discussion isn't one where the employee leaves satisfied with their raise. It's one where they leave with greater clarity, a clear framework, and a relationship that remains intact. A successful discussion isn't one without frustration—it's one without ambiguity.
The way you present yourself matters just as much as the content. A manager who apologizes or beats around the bush sends an unintended message: he or she implies that the decision is unfair, even when it is perfectly justified. Conducting this conversation with confidence shows that the framework is solid and that the decision is defensible.
Communication about salary remains one of the least-practiced skills in management. Talking about money is a deep-seated taboo in many professional cultures, and France is no exception. This discomfort is normal. It becomes problematic when it prevents clear conversations, because it is precisely this silence that fuels speculation and resentment.
These conversations often take place during the annual review, but they shouldn't be limited to that. Addressing salary issues consistently throughout the year helps prevent everything from piling up into a single, high-pressure discussion.
Added to this is a rapidly changing landscape. The European directive on pay transparency will change the rules of the game: salary ranges posted at the time of hiring, access to compensation criteria by category, and a requirement to justify pay gaps between women and men. Managers will have to answer more specific questions, with less leeway.
Before entering into a salary discussion, you need to fully understand the factors that determine an employee’s compensation level. This isn’t just a technical detail—it’s the foundation of any credible explanation and any confident stance.
Compensation is based on four main components: the job and its sector-specific market rate, level of seniority, length of service, and the company’s financial decisions (overall budget, bonuses, profit-sharing). Every compensation decision is in line with the company’s compensation policy. Explaining this clearly means moving away from personal opinions and focusing on the facts.
One of the most common misconceptions is equating excellent performance with an automatic right to a raise in base pay. Performance may result in a bonus or variable compensation. It may justify differences within the same pay band. But it does not automatically trigger a review of base pay, unless the job responsibilities have changed in a structural way.
Salary decisions are subject to several biases that are worth understanding. The recency bias leads to giving greater weight to recent events than to the entire period under review. The halo effect allows a single standout characteristic—such as verbal fluency—to influence an overall evaluation. Assertiveness bias leads to giving larger raises to those who explicitly ask for them, even if others objectively deserve more. According to the Audencia-KPMG Professional Equality Barometer (2025), 48% of women do not dare to ask their manager for a raise, compared to 28% of men. This bias has a direct gender dimension.
This situation is best handled using a two-step approach, without trying to soften the news before delivering it.
First, the decision, stated simply: “In agreement with management, we have decided to grant you a raise of X%, which corresponds to a gross annual salary of Y euros.” The decision comes first. No preamble.
Here’s the explanation: “I realize this is less than what you asked for. The main reason is that the budget for raises is limited this year and your compensation is already in line with the market.” A useful point of reference: the average raise for executives in France was 1.8% in 2025, according to the APEC Barometer. Sharing this figure helps put the decision in the context of objective economic reality.
A pay gap does not mean injustice. That is the message we must convey, and the stance we must take. Pay gaps can be justified by the market value of a rare skill, by different levels of seniority, by longer tenure, or by historical financial decisions. Explaining the situation with this level of precision prevents the gap from being perceived as an implicit hierarchy among people.
What to avoid: comparing people to one another. We compare positions based on a pay scale and the job market. “It’s not a matter of individual merit, but of demand for certain skills.” This phrasing refocuses the conversation on objective criteria.
When an employee presents a sector-specific study, the response is to put the comparison into perspective: the same job title does not always refer to the same role. Salary ranges vary depending on the sector, scope of responsibility, and business model. “Information about the external market is useful, but it is not the sole factor determining compensation.”
Herzberg's model provides a useful framework. Salary is a hygiene factor: if it is insufficient, it leads to dissatisfaction. If it is adequate, it does not, on its own, create lasting commitment. What motivates people are real responsibilities, a sense of accomplishment, and opportunities for career growth. These factors are not included in a salary counteroffer.
When an employee receives an offer from another company, there’s often more to it than just the number. Start by exploring the actual situation: “How do you feel about your role right now? What still motivates you here?” If a solution isn’t possible in the short term, be clear about what you can offer. “A one-time raise is attractive, but it doesn’t guarantee more fulfilling career growth over time.”
An employee who does outstanding work within their current scope of responsibilities deserves recognition. But that recognition does not automatically translate into a raise in base pay if their responsibilities have not changed structurally. “You have more autonomy, and that’s recognized. But the scope of your position hasn’t changed. It’s your seniority that’s advancing within the pay band.”
If the desire is genuine, the right approach is to map out a path together. Work together to define the criteria for advancing to the next level: what skills are missing, and what new responsibilities might justify a promotion? It is this dialogue that sustains commitment over the long term.
Some situations are objectively inconsistent: an employee rated below the minimum for their pay band, a discrepancy resulting from a merger, or a decision made under time pressure. Take the time to assess the actual situation before responding. Even if you didn’t cause it, your role is to acknowledge it and set a course for correction. “Right now, this situation isn’t consistent with the framework. I can’t fix everything immediately, but I’ll get back to you with a clear answer.”
Keep in mind that a local compensation decision always has a collective impact. Make your decision as if another manager were going to have to explain it. That is the key to collective fairness.
Apologizing for the decision. This unintentionally amplifies the sense of injustice. A confident stance means the framework is solid.
Promising what you can't guarantee. Saying, "I'll bring this up with HR and we'll change that," creates expectations that are impossible to meet. Say what you can do, and stick to it.
Treat each situation as an exception. When it comes to salary decisions, an exception today becomes an inconsistency for someone else tomorrow.
To take it a step further, check out the best practicesfrom Alma, Vinci Construction, and Doctolib.
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