Editor's Note: We recently featured Margaret O'Hanlon's "The First Step Towards Pay Transparency" as a Cafe Classic. Today we bring you the next step in the series!
The second step towards pay transparency is identifying the changes and outcomes that you are going to ask leadership to approve. After all, they need to be in on this change from the beginning.
There's no doubt that using the term "pay transparency" is a big risk in most companies. Leadership is apt to shut down discussion in the blink of an eye if the mention of any big idea sounds slightly controversial.
But just how controversial would it be to talk with them about giving employees, "A better understanding of what fair pay is for an employee's position and skills?" This description communicates a clear, detailed picture of the outcome of a pay transparency effort without actually using the hot-button term.
Or to bring up with leadership some of the compensation issues that have been in the news recently. For example, The New York Times just had a front-page article about Massachusetts' bipartisan agreement on a new law that, " . . . will require hiring managers to state a compensation figure upfront -- based on what an applicant's worth is to the company, rather than on what he or she made in a previous position." They have done this to ensure that, " . . the historically lower wages and salaries assigned to women and minorities do not follow them for their entire careers."
Most executives that I have worked with would be interested in hearing more about a policy like this, and kicking around how it could work in their own organization -- again without necessarily mentioning the term, "pay transparency." A specific discussion of the steps involved, and how far you would go making changes and how fast, would be very welcome. They may not end up agreeing to comparable changes but you would have briefed them on what's happening in their business world. A world where the new overtime rule and the Pay Ratio announcement seem like just the beginning of changes we'll be making in how compensation is talked about.
Let's face it, the Pay Ratio announcement may be scheduled for months and months from now, but it will put leadership right in the middle of a true pay transparency issue. Employees will be as skeptical of the median employee data as they will likely be of the Pay Ratio information. Talking with executives now about how your company can update talent and communication practices to create a better context for the Pay Ratio announcement is simply treating the situation strategically.
And when you do talk with leadership, remember the basics in conducting any executive discussion:
- Be as plainspoken as possible
- Specify measurable outcomes of the updated practices
- Identify key milestones when you will ask for further leadership input as well as keep them in the loop
- Help them realize how much investment is involved, both in budget and staff time
Q. OK, that's the second step. But what's the first step towards pay transparency, you ask?
A. Deciding how far and how fast you want to go. There's no need to think pay transparency will turn your company on its head. The pacing of the change is up to you, as you'll find out in the earlier articles in this series about what pay transparency really means and where to start.
Margaret O'Hanlon brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm is re:Think Consulting. 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 everythingiscommunication.com. She is a member of U.S. Masters Swimming.
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