Communicating Compensation to Executives and Managers
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The document discusses communicating compensation to executives and managers. It advocates for pay transparency and discusses its benefits, such as increased trust, engagement, and business outcomes. It also addresses how to have compensation conversations with executives by understanding their priorities, aligning pay with business goals, and keeping them informed. When communicating with managers, the document recommends equipping them to have difficult pay discussions, considering alternative forms of compensation, and preparing them with tools and talking points.
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Communicating Compensation to Executives and Managers
- 1. bamboohr.com payscale.com Communicating Compensation to Executives and Managers ToExecutives and Managers
- 2. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Rusty Lindquist V P T H O U G H T L E A D E R S H I P A T B A M B O O H R Mykkah Herner M O D E R N C O M P E N S A T I O N E V A N G E L I S T A T P A Y S C A L E
- 5. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Defining Transparency
- 6. bamboohr.com payscale.com Communicating Compensation to Executives and Managers The PayScale Pay Transparency Spectrum
- 7. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Why Would Anybody be More Transparent about Pay? Pay Transparency Trust Better Business Outcomes! Engagement
- 8. bamboohr.com payscale.com Communicating Compensation to Executives and Managers www.payscale.com Talking about pay isn’t always fun
- 10. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Culture Performance Engagement Retention
- 11. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Performance Loyalty Satisfaction Engagement Retention CULTURE Greater Business Output CULTURE
- 12. bamboohr.com payscale.com Communicating Compensation to Executives and Managers CULTURE Impact? CULTURE
- 13. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Everything you do becomes part of that story… The story of what you value
- 14. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Compensation: The story of how much you are valued
- 15. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Compensation The Keystone of Culture
- 16. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Making the Compensation Conversation a Culture Builder Don’t be offended Be open Take it seriously Be objective Be proactive Be Positive
- 17. bamboohr.com payscale.com Communicating Compensation to Executives and Managers of employees are ok with low pay if the rationale is explained 82% of companies are confident in managers’ ability to have tough pay conversations 80% of employees paid above market believe they’re paid at or below 17% —PayScale Employee Survey 2015 —PayScale Employee Survey 2015 —PayScale Comp Best Practices Report 2016
- 18. bamboohr.com payscale.com Communicating Compensation to Executives and Managers How does perception of pay impact employees?
- 20. bamboohr.com payscale.com Communicating Compensation to Executives and Managers www.payscale.com • Understand the executive audience • Align compensation with business objectives • Incorporate leading edge practices • Keep executives up to date Exec communication tips
- 21. bamboohr.com payscale.com Communicating Compensation to Executives and Managers What do your Executives Care About?
- 22. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Benefits of Comp Plans 22
- 23. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Prepare Talking Points • Compensation philosophy and purpose • Compensation plan changes at the highest level • Market study and results • Next steps—talk with managers
- 24. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Report High Level Info • Get them familiar with a dashboard (Compa Ratio, Market Ratio, etc.) • Report these on a regular basis
- 26. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Compensation is about an exchange of value, not money.
- 27. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Value Exchange Experience in industry Experience in market vertical Experience in adjacent markets Experience in field of discipline Experience in adjacent disciplines Experience with competitors Product knowledge Competitor knowledge Time and experience in company Education Discipline training and certification Supply and demand Employer Value DriversEmployee Value Drivers Base pay Performance Pay Paid time off Benefits Travel Culture and environment Work flexibility Work/Life balance Meaningful work Who you work with Challenging work Opportunity to impact Job security Shared purpose / mission Career advancement opportunities Autonomy Senior leadership
- 28. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Agents of the Organization
- 29. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Equip Managers • Set expectations • Educate them • Give them the big picture • Give them tools
- 30. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Negotiation Skills • Sell the organization & the full package on the table • Sell the benefits of the offer (initial or increase) • Listen to the ask behind the ask • Meet them and then move
- 31. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Consider Workplace “Currency” Know what motivates your employees Additional/Alternative Perks FTE preference Staggered increase or offer PTO Work assignments Development opportunities 31 Identify Creative Solutions
- 32. bamboohr.com payscale.com Communicating Compensation to Executives and Managers The Compensation Review Meeting 1. Prepare for the meeting 2. Deliver feedback and listen 3. Follow up
- 33. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Prepare Manager Toolkits • Compensation Plan Talking Points • Compensation Plan Information • Details for each employee they supervise • Tips for each type of conversation they may have o Pay is low or perceived to be low o Pay is high o No increase due to performance o “I found this on the internet”
- 34. bamboohr.com payscale.com Communicating Compensation to Executives and Managers Thankyou! BambooHR Receive a free job posting on our ATS and full HRIS for one week. We will contact everyone within the next few days to set this up. Download our free eBook: Communicating Compensation: Your guide to tackling tough conversations about pay PayScale
- 35. Follow BambooHR and PayScale on social media: bamboohr.com/blog | payscale.com/compensation-today Questions? Rusty Lindquist V P S T R A T E G I C H R I N S I G H T S B A M B O O H R @ r u s t y l i n d q u i s t r u s t y @ b a m b o o h r . c o m w w w . l i n k e d i n . c o m / i n / r u s t y l i n d q u i s t Mykkah Herner M O D E R N C O M P E V A N G E L I S T P A Y S C A L E @ m y k k a h _ h e r n e r M y k k a h H @ p a y s c a l e . c o m w w w . l i n k e d i n . c o m / i n / m y k k a h h e r n e r
- 36. bamboohr.com payscale.com Communicating Compensation to Executives and Managers
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- BambooHR Compensation can have a profound impact on your organization. Employees, after all, are your biggest expense, and more importantly, the key to your organizations success. And compensation affects every employee. So let’s take a look at three critical ways compensation impacts your organization.
- BambooHR One of the primary ways compensation impacts your organization is through culture. We know how important culture is. Culture is the heartbeat of our companies. It fosters loyalty and satisfaction, it powers performance and engagement, and results in retention. All of these lead to reduced operating costs, and increased productivity, which themselves result in greater business output.
- BambooHR So Culture, as abstract as it may be, is a powerful strategic lever within our organizations. But sometimes our abstract view of culture means we fail to recognize how our actions actually impact it.
- BambooHR So for a moment lets think of culture as a story. Think of it as the shared narrative we create together about where we work. It’s a story we tell our employees, and it’s the story employees tell each other about where they work. Thinking about culture as a story, can help influence the way you manage it, and invest in it. Because everything you do becomes part of that story. Sometimes you’re adding words and scripts, and sometimes you’re adding whole chapters. Sometimes what you add creates cohesion, strengthening or reinforcing that story, and sometimes what you add creates confusion, detracting from that story. Compensation, along with discussions and attitudes around it become a strong part of that story.
- BambooHR Because compensation is quite literally, the story we tell our employees about how we perceive their value.
- BambooHR And because few things impact a person more than their perception of their own value, and their perception of how we value them, compensation can be considered the keystone of culture. Because all the stories we create about what we value as a company become subservient to the story we tell each employee about how we value them.
- BambooHR So how do we make compensation a culture builder. Let’s start with how to have constructive conversations about compensation. Because they don't have to be awkward, and they don’t have to be negative (and yes, that’s true even when you don’t have budget for monetary adjustments). Here are some specific things you can do to help set the stage for productive compensation discussions, and guide them to fruitful conclusions when they happen. Be open - Listen, your company’s attitude about compensation discussions are clear to the employees. It radiates with deafening clarity. And if employees know that they can come in, and are welcome to have open conversations about compensation, then it makes a huge difference. You’re telling them that you value them, and you care about them feeling valued. But if they know that you’re not open, if they know that you hate compensation discussions, if they’re taboo, or really uncomfortable, then they won’t happen, and people will just leave. Often we find people would rather leave, and find a new job, then approach an uncomfortable compensation discussion with their company. Take it seriously - Sometimes simply the act of being very sincere, of having a serious discussion can make the difference between them feeling valued or not. Remember, compensation is the communication of how much we value that employee. If they feel undercompensated, they’re feeling undervalued. This is deeply emotional. If you take it seriously, your story to them is that you’re serious about their value. Don’t be offended - Compensation is inherently highly emotional, and if you have an obvious, adverse reaction to the conversation, you can unintentionally entrench the employee in their emotion by your reaction. HR and managers in a company need to know that they can happen at any time. They need to be prepared for it. And they need to not be offended when it happens. We’ll talk more about this a little later. Be Positive - When you get asked, if you don’t make it a positive experience, you could be telling the story that you don’t care, or hate talking about it, and that can stifle future conversations and create a culture where it’s easier to just leave, then ask for a raise. Make it a positive experience. Even if you think the employee will end up just leaving, or isn’t worth trying to save, because remember, how you treat that conversation will be a story that gets shared, and will become part of a cultural narrative that you have to operate within. Be objective - Diving in and deconstructing the misalignment by focusing on actual value, and the employees value drivers can help strip the emotion away from the conversation, and focus it on a more constructive end. Your objectivity and openness about the conversation can tell a strong internal story that the company cares about it’s employees, and is fair in talking about comp. In just a few minutes we’ll unwrap this part a lot more. Be proactive - Don’t wait for compensation to be brought up. Having designated periods (such as an annual review) can help an employee feel like you care about being competitive with comp, and making sure the employee is fairly comped for their value. It can also cause employees feeling out of alignment to be at ease, knowing their comp review time is coming. Simply having it scheduled can help them feel more objective about the discussion.
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