4 ways to communicate compensation that drive strategic outcomes

4 ways to communicate compensation... Basic OperationsStrategic Operations OF NEEDS Culture, Performance, Engagement, Satisfaction, Employment Brand, Advising Talent Management, Success

4 ways to

communicate compensation

Value Perception Crisis

It’s time to blow up HR and build something new Rethinking HR

Why we love to hate HR What will it take to fix HR It’s time to split HR

HR faces a crisis of credibility in the boardroom

HR is our “favorite corporate punching bag”

Basic Operations

Strategic Operations

OF NEEDS

(Culture, Performance, Engagement,

Satisfaction, Employment Brand, Advising

Talent Management, Succession

Planning, Learning & Development…)

General Operations

(Operational Efficiency: HRIS,

Records, Talent Acquisition,

Compliance Tracking, Etc.)

(Payroll, Benefits, Time &

Attendance, etc.)

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Payroll is, by far, a company’s

getting it wrong is tremendous.

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1

Creating Pay Transparency in the Workplace

1

Defining Transparency

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Pay Transparency

gets everyone in the same

boat, paddling in the

same direction.

Engagement

Employees who perceive a ‘fair and

transparent pay practice’ have lower

intent to leave and higher satisfaction

PERCENT OF RESPONSES

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How Compensation Discussions

Impact Your Organization

Impact?

CULTURE

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Everything you do becomes part of that story…

The story of what you value

The story of how much you are valued

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Compensation:

The Keystone

of Culture

Making the Compensation Conversation a Culture Builder

Communicating with Executives

• Understand the executive audience

• Align compensation with business objectives

• Incorporate leading edge practices

• Keep executives up to date

Exec communication tips

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What do your Executives

Care About?

Benefits of Comp Plans

changes at the highest level

• Market study and results

• Next steps—talk with

managers

Report High Level Info

• Get them familiar with a dashboard (Compa Ratio, Market Ratio, etc.)

• Report these on a regular basis

Communicating with Managers

Compensation is about an exchange of

value, not money.

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Value Exchange

Experience in industry Experience in market vertical

Experience in adjacent markets

Experience in field of discipline

Experience in adjacent disciplines

Experience with competitors

Product knowledge

Competitor knowledge

Time and experience in company

Education

Discipline training and certification

Supply and demand

Base pay Performance Pay Paid time off Benefits Travel Culture and environment

Work flexibility Work/Life balance Meaningful work Who you work with

Challenging work Opportunity to impact Job security

Shared purpose / mission Career advancement opportunities

Autonomy

Senior leadership

of company leaders do not feel confident in their managers’ ability

to effectively communicate with employees about salary issues

2014 PayScale CBPR

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Agents of the

Organization

Equip Managers

• Set expectations

• Educate them

• Give them the big picture

• Give them tools

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Identify Creative Solutions

Consider Workplace “Currency”

 Know what motivates your employees

The Compensation Review Meeting

1 Prepare for the meeting

2 Deliver feedback and listen

3 Follow up

Prepare Manager Toolkits

• Compensation Plan Talking Points

• Compensation Plan Information

• Details for each employee they supervise

• Tips for each type of conversation they may have

o Pay is low or perceived to be low

o Pay is high

o No increase due to performance

o “I found this on the internet”

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Report Relevant Info

Give them tools for success:

• Flight Risk report & the inverse report

• Disparate Pay report

Give them insight into what employees care about

• Am I making enough money to cover my basic needs (entry level)

• Am I being paid fairly (professional level)

• Am I being paid enough to deal with managing people (Mgrs/Dirs)

Give them talking points for comp conversations with employees

Communication Tips

• Know your audience

• Watch the jargon

• Don’t present issues without a way forward

• Prepare, prepare, prepare

• Be direct and also empathetic

• Communicate early and often

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Focus on Outcomes

Which key activities do

partners perform?

Revenue Streams? What bundles of products and

services are we offering to each Customer Segment?

Which customer needs are we satisfying?

How are they integrated with the rest of our business model?

Through which Channels do our Customer Segments want

How are we integrating them with customer routines?

What Key Resources do our Value Propositions require?

Our Distribution Channels?

Customer Relationships?

Revenue Streams?

What are the most important costs

inherent in our business model?

Which Key Resources are most

expensive?

Which Key Activities are most

expensive?

For what value are our customers really willing to pay?

For what do they currently pay?

How are they currently paying? (How would they prefer to pay?) How do we report on this “revenue” to the rest of the

organization?

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