On Saturday, people around the world will be celebrating St. Patrick's Day. Parades, feasting, and of course, the consumption of alcohol will occur from Boston to Birmingham, Manchester to Montserrat, and Cheonggyechon to Calgary. Prominently featured in these celebrations will be the shamrock.
Legend tells that St. Patrick used the shamrock to teach the Irish about the doctrine of the Holy Trinity, or "three divine persons in the one God".
I'm going to borrow a leaf from St. Patrick and use the shamrock to illustrate the Holy Trinity of Compensation Communication: The Message, The Language and the Holy Ownership.
The Message: Compensation communications with employees is about more than annual percentage increases and bonus amounts. Communications should help employees understand the objectives of the company, the goals of their department or functional line of businesses, and their work teams. If employees understand these objectives, they can see more easily how they fit in and how they can best contribute. A well-designed message can influence employee engagement, behavior and performance.
When building your message, think about how much information regarding the structure of the compensation system you will share. Transparency is a key consideration. Transparency is about clearly communicating the why and how of the company's pay practices, not divulging employee-level pay data so everyone knows what everyone else is making.
Less is not always more. Not providing enough detail about your pay practices leaves employees wondering how their performance and behavior affect their pay. It also feeds the rumor mill. If an information vacuum exists, misinformation will rush in to fill the space. The right level of transparency will clearly express how the compensation program affects each employee, what behaviors are expected of them, and how they can move forward in the company.
The Language: The actual words we use when communicating about compensation are extremely important. As Sandrine Bardot points out, every word counts. Your choice of word will depend on your audience. Your communications to professional employees will be different, in terms of format, vocabulary and perhaps volume of information, than your communication to hourly laborers. Due to cultural differences, your communications to overseas employees may take a different tenor than your communications to US-based employees.
The actual words are also important because of the nature of what you're communicating. Compensation is technical, and technical discussions require precision. Median salaries are not the same thing as average salaries. Salary as a percent of total expenses and total compensation as a percent of total expenses are different animals. A target bonus is not the same thing as an actual bonus. Be precise, and be correct.
When thinking about the language, remember that a picture is often worth a thousand words - or pages and pages of data tables. Using a well-designed chart is a more elegant - and usually more effective - way to make your point. We, as a society, are becoming more and more accustomed to data visualizations. Think about incorporating graphical representations - in some cases it can be a better way to communicate the information.
The Holy Ownership: Your communications about your compensation program are the "face" of the program. Put your best face forward, and own the program. Take responsibility and answer any questions directly. Don't pass the buck and respond to criticisms about pay and performance decisions with "(S)he made me do it!" or "I don't like it either, but there's nothing I can do." Explain how the decisions were made, and stand up for the outcomes. Keep your comments neutral and fact-based. Explain the rationale and leave your opinions out of it.
Taking ownership and being direct doesn't mean being a jerk. Remember that compensation is a very personal matter. It directly affects the ability to provide for yourself and your family. Compensation is also one of the ways that self-worth is measured. Whether we like it or not, someone's pay communicates a sense of how much the company values that person. This, in turn, can have an effect on self-esteem within the organization and outside of the organization. Be mindful of this. Communicate directly and openly, and remember the Golden Rule.
Stephanie R. Thomas is an economic and statistical consultant specializing in EEO issues and employment litigation risk management. Since 1999, she's been working with businesses and government agencies providing expert analysis. Stephanie's articles on examining compensation systems for internal equity have appeared in professional journals and she has appeared on NPR to discuss the gender wage gap. Stephanie is the founder of Thomas Econometrics and is the host of The Proactive Employer. Follow her on Twitter at proactivemployr.
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