Will a Word to the Wise Be Sufficient?

Employee pay has become a trending topic in the media and online.

Last week, the President celebrated Equal Pay Day in the shadow of a report from the Office of Personnel Management addressing the overall gender pay gap for white-collar occupations. There have been two executive orders meant to push federal contractors on pay equity. A Paycheck Fairness Act didn't make it through the Senate. The minimum wage is promising to be in the news for the near future, with the most recent action happening in Alaska where there's a tentative approval to raise the minimum wage to $9.00 an hour this July and $10.00 the next.

And while the howls about executive pay can be heard on most days, they are getting louder at regular intervals. The New York Times Sunday Business Section led with two articles on the, "Invasion of the Supersalaries," this weekend.

One article's lead in was, "After another jump in 2013, executive pay draws more scorn as an engine of income inequality," and goes on to list Equilar's total compensation numbers on the 50-highest-paid and 10-lowest-paid chief executives in America. The other article, "Pay for Performance? It Depends on the Measuring Stick," made a case for replacing Total Shareholder Return (TSR) with earnings-per-share growth as the executive performance metric, based on research by James F. Reda and David M. Schmidt from Arthur J. Gallagher & Company.

No matter where you stand on any of these issues, it's not your opinion I'm after, it's your attention. When your company's internal practices become a topic for public discussion, you need to be alert. Your employees live public and professional lives. They will be bringing topics, information and opinions from the public forum to work.

Human Resources often finds out later, rather than sooner, that managers and executives have been facing questions about topics in the news. Taken by surprise and with nothing else to draw from, they share their personal views. Compensation professionals are not as used to this situation as benefits professionals are, since the cost of health care and wellness topics have been popular media topics for decades. 

But when managers and executives draw exclusively on personal opinion, all sorts of confusion can begin. What if their personal opinions contradict policy? What if managers in the stores answer questions differently than in corporate? What if executive credibility is taking a heavy hit because of media reports? (And what kinds of rumors are spreading?)

If you haven't thought about what managers and executives should be saying about these trends, spend some time on it. Employees have a right to ask pointed questions, especially if your chief executive shows up on the top 50 list for the first time, or if you have large numbers of hourly employees who would be affected by changes in hourly wage practices, or, or. If you have a Communications department, get them involved, you need their advice and experience.

The discussions on tight employee pay opportunities and the erosion of the American dream are here to stay until business practices and the economy start moving in a different direction. Your employees may not be talking about it at work -- or they may be, and you just don't know enough about it.

Margaret O'Hanlon, CCP is founder and Principal of re:Think Consulting. She'll join Ann Bares and Dan Walter of the Compensation Cafe to speak  the unspoken -- Everything You Do (in Compensation) Is Communication --  in an upcoming book. Margaret brings deep expertise in compensation, career development and communications to the dialog at the Café. Before  founding re:Think Consulting, she was a Principal with Towers Watson. Margaret earned her M.S. and Ed.S. in Instructional Technology at  Indiana University, Bloomington. Creative writing is one of her outside  passions, along with Masters Swimming.

Comments

[E. James (Jim) Brennan]

Now is exactly the time for Total Rewards professionals to step up to confidently inform top management that they can and will explain those issues in ways that even a senior executive can understand. If you CAN'T do that, then you haven't done your job properly. In my experience, it is fear of looking stupid that creates most pay secrecy situations. HR or Comp can usually defend pay practices, but their bosses can't and they then therefore discourage or ban discussion.

THAT is a more controversial situation than executive pay excess, in my opinion.

[Tony Bergmann-Porter]

"...that they can and will explain those issues in ways that even a senior executive can understand."

With all due respect, that's not the problem at all. The problem is explaining these issues in ways that 8th grade educated John Q. Public can understand, and being able to do so despite the Niagara of propaganda and disinformation produced by the Bolsheviks that own virtually all forms of cultural production in Western society.

[JonLeejoLTD]

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