I was just working with a college freshman who is struggling through a Business 101 textbook when I got the idea for this article. We were talking about where marketing fits in business operations. After all, if you have a good product, why don't consumers just buy it and make you loads of money? You know, just like if you have a new compensation change or improvement, why don't employees and managers just buy it and applaud your innovation?
Marketing types understand that you have to satisfy customers' needs or desires to connect with them, and that marketing communications should be crafted to build a relationship with customers. Our benefits colleagues have a lot of experience with these fundamentals of marketing. They have to introduce new insurance and wellness products regularly. Insurance and wellness products are not employee favorites, but financial stability, reliable healthcare, getting enough sleep, losing weight, and so on are employee priorities. Effective benefits communications explain and emphasize these advantages long before costs, coverage or paperwork deadlines are addressed.
It's a lot harder to take that approach with compensation announcements, but it is important to make the effort as we also bring out new ideas and practices every year. Let's start with the humdrum basics. The increase budget has been around 3% to 3.5% routinely for years, so you could just treat it simply as a disclosure. But in most companies, employees see the merit budget as much more than a number. For example, on hearing the percentage, many employees will: Immediately realize that some will be getting next to no increase; worry whether their contributions are considered valuable; realize that retirement savings will still be unaffordable; and question why the company is still not able to invest in salaries.
These reactions undermine engagement, which is essentially the depth and breadth of your employees' relationship with your company. Just as increased medical deductibles can simply telegraph higher out-of-pocket costs to employees unless they are addressed from a marketing standpoint, compensation announcements are strengthened by addressing employees' desires for recognition, a career with a successful company and retirement.
Employees and managers are proudly self-centered (just like any consumer). They don't automatically appreciate the glories of HR's next great idea, no matter how great HR thinks it is. No, they're focused on their personal needs, like everyone in our crazy busy world. They want to go home on time to spend the evening with their family, keep their manager satisfied, meet their deadlines, stop worrying about bills, feel proud of their accomplishments.
So many compensation communications stick to the features of their innovations: New effective date, steps, approvals, deadlines, etc. These things may be pluses from HR's perspective, but employees and managers are not going to appreciate them just because you told them to, no matter how many drafts and approvals HR goes through.
When you talk about how your compensation practices help address employees' and managers' needs and desires, you're also helping them notice how HR improves their work experience. You're demonstrating that HR cares about what's important to them, and through that meeting of the minds, you are making it more likely that employees and managers respond favorably to any announcement you make. Far more favorably than if they just know the new merit targets or performance management process, no matter how much better you have made them.
Really, if you want to do most any type of Human Resource communications effectively, it's all about the marketing.
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.