Have you measured your progress on pay transparency? It's definitely time to check. Even though every organization is starting from a different place, you should have kicked off your journey towards pay transparency by now.
What is pay transparency anyway, and how do I know when I get there? What I'm talking about is giving employees enough information to understand how compensation decisions are made in your culture. It takes a process to achieve that definition of transparency, and notice that employees are the ones to determine when enough information is really enough.
The consulting firm, Mercer, did a great job of illustrating the journey towards pay transparency (click to enlarge):
If you're thinking, "We haven't done anything on pay transparency yet and nothing has exploded, so why start now?" Mercer also points out that, in case you haven't noticed yet, "the truth [about my pay] -- or some version of it -- is out there, whether companies like it or not."
You can laugh that off as a "bad" reminder of the "The X-Files," or you can face the reality that a misinformation problem has been hanging around for years. In fact, I bet you now deal with it in most pay negotiations. Employees gather statistics-lite data from sites like Payscale, Glassdoor and Quora and treat it as equivalent to any data you may offer.
It's time to accept that your job has changed from gatekeeper (limiting access to pay knowledge until employees are "ready") to educator (describing the nuts and bolts of salaries and incentives). Otherwise you will lose the battle of misguided data. You know, the "data" from the sites like the ones described earlier, which send the message that there is one -- and only one -- valid number for an employees' salary and it's generally above the market pay rate.
Getting uncomfortable about your pay transparency efforts or looking to create a strategy? (After all, it's not just compensation information you'll be sharing but, eventually, a whole new open-book pay-for-performance philosophy.) Here is a three-part series of Compensation Cafe articles that apply time-tested compensation communications methodologies to your "pay transparency journey."
- Determining objectives for your strategy
- Engaging your executives
- Getting a return on your pay transparency investment
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. A former Board member for the Bay Area Compensation Association (BACA), Margaret coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.
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