It's certainly what most companies would plan to do. In fact, it seems like the obvious move. But when I was talking this request over with a growing company recently, I was reminded of a few war stories that I usually share in Compensation 101 classes.
- The Director of HR in a high tech company requested a compensation study proposal because they hadn't checked competitive pay levels for over three years. Staffed by experienced Ph.D.s, this company hired experts from a small pool of U.S. talent. Recently, the Director had been having some trouble in new-hire negotiations. A couple of planning meetings and a detailed proposal later, the Director took our information to the executives thinking approval would be a slam dunk. Following the meeting we heard from the Director who was very embarrassed. When she had mentioned the compensation "problem" to the executives, their reaction was, "What problem?" And, they wouldn't budge. They admitted that there were many issues with the staff but they didn't think compensation was near the top of the list. So why approve a compensation study?
- A major company agreed to begin their compensation study with employee focus groups. They found out that oddly enough, compensation wasn't bothering employees nearly as much as inconvenience. The employees were working long hours but there was no way to get meals at their location. They had to get in their car, go out for a meal and trek back, sometimes late at night. Their message to management -- if you're going to invest in something right now could you make it a cafeteria?
After five years, there's no doubt that something in compensation is going to need updating at my new client. But that's an administrative decision, which is only one angle on the issue. If employees haven't been leaving or complaining, and they haven't, what's going on for them? What's keeping them loyal, and how would they explain this growing company's value proposition.
When we know what managers and employees value -- and whether the executives believe they've been able to pay for performance in the past five years -- then we'll start planning. Odds are, managers should communicate more of a Total Rewards theme than there has been in the past, but who knows? Having done employee research for decades, I can promise that employees will share some surprising insights, too. We'll wait until we hear employees and managers out to determine the outcomes for our project, because compensation is surely the answer, but it may not be the real solution for this group of employees and future new hires.
Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. Margaret is a Board member of the Bay Area Compensation Association (BACA). She coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.