Cafe Classic: Who Decides? Who Has a Voice, Who Has a Vote and Who Makes the Call?

Editor's Note:  What happens when you ask for employee ideas and input into pay plan design - but aren't clear about roles and boundaries?  

As part of, or perhaps as a parallel happening to, the call for increased pay program transparency there is a movement toward soliciting more input and involvement in pay program design.

This trend, however, does change the pay program management game for us.  More involved and informed employees are more likely to raise questions, voice concerns and even challenge elements of the pay program.  This can be disconcerting for HR and compensation professionals who have worked hard not only to make the programs better but also to involve and push more information out to employees.  Instead of appreciation and gratitude, we find ourselves facing a barrage of questions from a testy, skeptical crowd.

Here's the thing.  Transparent, participatively developed pay programs are messier and more complicated to manage than programs whose inner workings are closely held between HR and top management. They are ultimately better - to my mind - for rising up and meeting this challenge.  But transparent pay programs also require clear communication of rules and roles.  About who has a voice, who has a vote and who - ultimately - makes decisions.

At the end of the day, the organization and its governing bodies (the Board and top management, and whoever they have empowered in this regard on their behalf) retains the right and the responsibility to set employee compensation.  Period.  There are benefits to everyone if they choose to do so by providing thoughtfully considered opportunities for manager and employee input and if they take steps to make the pay program appropriately transparent.  Nonetheless, at least in most circumstances, they and they alone make the decisions on the programs and policies by which people are paid.

In the interest of truth and transparency, it is incumbent on us to remind our more strident and outspoken employees of this reality.  Part of our responsibility in bringing more transparency to pay practices is to also make the boundaries themselves clear. 

A delicate balancing act ... encouraging and considering employee feedback and concerns while reminding them of the limitations of their voice and role?  You bet it is. 

Are you up for it?

Ann Bares is the Founder and Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting and survey administration services to a wide range of client organizations.  She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time. Follow her on Twitter at @annbares.