If you're smart, 2016 will be the year of figuring out, wisely and at your leisure, how the CEO Pay Ratio will work in your company. If you missed it, or are planning to wait to 2017 to get going, check out the case I made in my last Compensation Cafe article. (No worries about regifting the article if you're in the mood!)
In it I mentioned that, "in the same way you need to do multiple dry runs of the numbers, you HAVE TO DO multiple dry runs of the communications early the year, so you have time to try at least three different approaches." Since some of you may need more than my sage words to take this advice seriously, I thought I'd send a few more details your way. The CEO Pay Ratio communications challenge is far more complex than many of you may have faced, so let's see what a few dry runs will earn you in ROI.
Dry Run #1 -- I'm suggesting that you don't wait until you have the actual numbers done, but instead create an estimated scenario. Then you take a look at a potential ratio based on your best guess, and get your freaking out over and done with, along with your colleagues, in a closed room.
Oh holy night! What can we actually say out loud about that ratio? (Don't be fooled. This is a gentle version of the conversations you'll end up having frequently until the announcement occurs.)
After all of that, check around in the meeting. Is there a communicator in the room? If not, get yourself one (and be sure you check to see if s/he understands compensation).
I'm going to assume that some of you will ignore that last suggestion. (I don't know why, it just seems plausible.) The next thing that will happen, after a number of meetings with flipcharts, is that someone will start writing drafts. It's inevitable, so just go with it.
Then put the drafts in a drawer for a week or two. (Please take my advice this time! Even Stephen King uses this technique and look where it got him.) Eventually, open the drawer and look at what you have there. If you are like every other HR human being, what you will have is a nicely composed example of how HR types speak to other HR types. Use the communications in this form and once employees get a whiff of it, you'll be paying consultants for years to help you get your productivity back on track.
Dry Run #2 --In this step you pull yourself together. Start realizing that you have some real analysis to do (and that you may have some places of sketchy alignment between your compensation philosophy and compensation practices that is going to make the communications even trickier). Start by listing potential employee reactions to both the ratio and the definition of median employee. Do they make a good point? Or do you have a group of employees who don't really understand how compensation works? What does that tell you that you need to include in the communications? Also, given your talent needs, which employee groups will need the most attention? Why? How can you give it? What does that tell you about who will need to be involved with the communications?
In short, Dry Run #2 is about strategy not just words. Strategy includes events as well as messaging -- and a rollout schedule. Recognize that you can't just announce this and be done with it. You'll have to keep talking about it for months in one way or another. (Wouldn't be great to have someone who knows how to plan something like this -- like, you know, a professional communicator?)
Dry Run #3 -- By now you'll have real numbers or something quite close to them. Time to sharpen your pencil and look for places to edit and/or upgrade your strategy and messaging. In some companies, you may have waited until this time around before you shared your plans beyond a select group. If you need Division Heads and so on to help you roll this out, time to start briefing them and listening to their suggestions.
In other words, Dry Run #3 is about giving yourself a reality check. (If you want to play it cool, call it, "deep background.") You've been working without any employee and manager input. You've made guesses about their reactions, but you can't be sure you've got it right. Obviously, this is no time for focus groups, but you do need input and advice from a select group of employees. What about the HR administrative staff? Surely you can swear them to secrecy. And when you get their comments don't forget that they are being far more kind to you than any broad-based employee group would be.
I hope that I have scored a few more believers this time through. Now get yourself some sleep, run some laps and have a lot of fun over the holidays. Your team will need you at top performance to go the distance with this one in 2016!
Wondering what to get for all your favorite CCPs, CECPs, GRPs, ACCPs and MCCPs? You can't go wrong with a copy of the popular ebook, Everything You Do (in Compensation) Is Communication @ www.everythingiscommunication.com. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. Margaret is founder and Principal of re:Think Consulting. She brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, Margaret was a Principal at Towers Watson.
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