The Compensation Conundrum: Building Trust Through Pay Transparency

“I often say that even though compensation is not probably the only reason why we work, it's, you know, got to be right up there as a primary reason for most of us, even though we love what we do. I think unless we're in a volunteer capacity, none of us are working for free, but it is the most poorly communicated thing that I have seen in our work lives.”

Highlights the critical importance of compensation and the widespread failure in communicating it effectively within organizations.

“And pay is no exception. I mean, again, it's a big part. You're looking at your pay stub every week or every other week or whatever it is for you. And really trying to understand why it is. When you see things on the news about, you know, unions negotiating 46% increases or inflation at an all-time high, we as employers really need to kind of step in and fill that void of knowledge so that our employees can at least be engaged.”

Emphasizes the employer's responsibility to proactively educate employees about pay to counter external influences and maintain engagement.

“Another thing that I often see that I think is really detrimental to engagement, it really brings down managers' credibility, is if we don't equip our managers with any information about pay or very limited information, and employees come to them, the person they trust most, their supervisor or their manager, and that person can't answer any questions...”

Points out a critical internal communication failure that erodes trust and manager credibility, directly impacting employee engagement.

“So data is important. I think it's starting with market data around pay, building that framework, building those ranges. But then beyond that, really thinking about the guidelines for how decisions are made, because we can have a great plan and great data, but if we have a bunch of different leaders and managers who are using that data differently and making different decisions...”

Stresses that data alone isn't sufficient; clear guidelines for its application by managers are essential to prevent pay inequities.

“And there's real easy statistical things you can look up. You can do a regression in Excel. Excel can do a lot of the work. All the way to there's great computer assistant, you know, softwares that are out there and HRIS systems that have things built in that can help with that as well.”

Provides practical, accessible advice for conducting pay equity analysis, from simple tools like Excel to specialized software.