Looking for a practical example of a compensation communications strategy? You've come to the right place. We'll go over a mini case study in a minute. Wondering what a message platform is? My last article talked about the definition and application of a message platform. If you're looking for deep background, start there.
In short, there are two parts to a message platform for Compensation communications:
- Key messages are short statements designed to show that Rewards practices are linked to business practices in a way that ultimately benefits the employee.
- Proof points are the details of the compensation practices you are explaining. They act as supporting evidence for the key messages, giving them validation and credibility.
A message platform is the outcome of a strategic exercise that you work on with a select group of HR and executives. The goal is to determine how you are going to explain the connections between business transitions that you want to accomplish and your compensation practices. The explanations should be posed in a way that encourages employees to empathize with the new role that you are asking them to play.
The example that we're going to examine today is illustrative, using the case of a small engineering firm. The Sales group has sold the firm's project management services for decades in a mid-sized, somewhat "retro" market space. The company is now more than ready to grow Revenue. It wants to move to the next level, by linking Sales goals to the achievement of the company's new, aggressive three-year plan.
In the past, each Salesperson has had a lump-sum incentive guarantee for sales to target clients (in lieu of base + commission). This compensation plan design doesn't really align with the company's new, higher energy initiative to increase Revenue. Their compensation redesign strategy involves ramping up the Sales challenge while paying a foundation guarantee amount, with total compensation shifting to 50% salary and 50% incentive. Added together, these amounts will pay a market competitive rate.
Here's a selection of key messages for this case:
- We are gearing up to make the most of the opportunities for progress on our three-year plan.
- We want to challenge ourselves to "get ahead of the Artificial Intelligence wave," so we can position ourselves as experienced advisors to our clients.
- Increasing our Revenue as we grow in influence will put us in the best place to collaborate with our customers and build our own capabilities.
- We are introducing a base salary not only because many Salespeople asked for this change, but also because it will provide a clearer message about the competitiveness of our pay practices in each of our job markets.
These illustrations describe a company and Salespeople that are making a transition to a more "amped up" Sales culture. Notice how the messages are designed to help Salespeople understand the rationale for the change AND to "get their heads around" the changes (which affect them deeply and will require changes in their behavior).
While the examples refer to business challenges and strategies, they also use words like "experienced," "collaborate" and "clearer." This approach builds both awareness of, AND empathy for, the changes. After all, employees will need to "cross the divide" between the current culture and the new one, so they need to be encouraged -- both intellectually and emotionally -- to be willing to act in new and very different ways. Remember that they are switching from a comfortable guaranteed payment to the more challenging design of base + commission.
Here are some examples of proof points. Covering "nuts and bolts" information, they support and reinforce the key messages.
- You will now be eligible to earn a supplemental commission for Revenue growth that is higher than the previous year.
- In implementing the new commissions, we will continue the policy of chargebacks for uncollected revenue.
- Salespeople can now qualify for promotion through the achievement of a series of specified, measurable milestones.
Can you use key messages in a more typical compensation year than this case study is describing? Absolutely. Remember the Compensation Cafe watchwords, "everything you do in Compensation is communications." Since effective communications is a call to action, every communication event involves engaging employees in an active transition that is linked to company effectiveness that will ultimately benefit employees. Recognize that your business is always in transition, even if it simply involves shifting from a day-to-day focus to an annual overview of performance and reward.
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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