By leading the compensation conversation, you can help foster engagement and forge stronger relationships with your people.
The days of squelching conversation about compensation are over. Not only are people more open to discussing their own pay, but they also have more ways than ever to compare your organization’s compensation practices to others. Leading organizations recognize that the conversation is already happening and are taking the opportunity to lead the discussion. Taking a cue from their practices can help improve the quality of your messages, the effectiveness of the conversation, and the outcomes for you and your workers in terms of strengthening both engagement and your ongoing relationship with each employee in your business.
Why the conversation is changing
Compensation may not be the only reason people work—but few would argue that it is the top reason most of us show up every day. Yet, even with compensation holding a top spot at the rewards table for quite some time, it wasn’t traditionally talked about openly, nor was public data widely available to make comparisons. Now, of course, we have easy online searches, entire sites devoted to pay transparency, social media-driven conversations, and a generation very open to discussing salary and benefits in ways former generations simply deemed taboo.
Adding to this, we also have a very competitive labor market that demands a certain level of compensation parity. And we have ongoing public and governmental discussions and policy about pay practices, transparency, and pay equity that are helping to keep the topic of pay top of mind.
All these factors mean organizations need to be strategic not only about their compensation practices but also about how they communicate about those practices. Leading organizations are purposefully building compensation into their total rewards communication strategy or as a distinct strategy in its own right. Communication is seen as critical to fostering stronger engagement and more meaningful relationships with workers of all types—not only traditional employees, but contingent workers as well.
What can your organization do to better communicate about compensation? Here are 3 starters:
1. Consider the right level of transparency. Organizations should assess the degree to which they are transparent to progress along the path of being open about pay and rewards, ultimately responding to and reaching employees. Our 2019 Global Human Capital Trends research indicates that within organizations, transparency is not common: Only 18 percent of survey respondents believe that they provide a “very transparent” model to communicate pay information. This flies in the face of a recent trend toward organizations becoming social enterprises and bringing more of a human focus into the workplace. As the Trends report notes, being open about pay and other rewards is an essential element to showing workers that the organization understands their needs and is trying to meet them.
Certainly, any planned or underway changes to compensation practices require a specific and well-thought-out communication strategy in addition to ongoing dialogue. It’s important for every organization to assess its comfort level around compensation transparency and whether it is willing to move the needle—particularly in light of this next point…
2. Connect to the big picture—and to people as individuals. People want to feel connected to their organization as part of a two-way, ongoing relationship, and solid relationships are grounded in open communication.
And how do you achieve this kind of “open” communication? Think about how your compensation communications strategy ties to larger corporate initiatives—your organization’s mission, vision, values; its culture; your philosophies about how you treat people and deliver rewards. How and what you communicate about compensation should ring true to all of these and support your overall organizational brand.
Compensation communications should also help people understand the backstory—the “why” behind compensation practices. How are salary levels established, for example. Do you look at industry or peer company pay benchmarks? If so, how do you choose to position your compensation levels against your competition to draw distinction and differentiate your organization from the pack? What do annual bonuses or on-the-spot awards seek to reward? Compensation programs can be extremely complicated, so the more you can do to demystify them and provide a rationale, the better.
3. Craft personalized communications to meet people where they are. If you really want your messages seen and understood, how you communicate is as important as what you communicate. There’s a big world out there beyond the standard corporate memo, including a host of technological and fun communications solutions. From targeted, digital rewards statements that demonstrate the company’s rewards philosophy beyond just an annual figure to videos, podcasts, and webinars to educate about your organization’s practices and position on pay, you can reach your people more personally, more comprehensively, and with more conviction than ever before.
A growing mandate
Given the push for greater organizational transparency overall, and the fact that leading organizations are already focusing on improving compensation communication, choosing not to communicate about compensation may speak volumes—and send all the wrong messages. Remember, today’s employment contract is about more than money—it’s about a personal connection and the human experience at work. By proactively and openly leading the compensation conversation, you can foster a stronger, more engaged, and more enduring relationship with your people.
is a manager in the award-winning Strategic Communications practice of Deloitte Consulting LLP. Krista is a leader in strategic communications, with nearly two decades of experience in communicating total rewards.