Communicating Compensation: Talking with Employees

Jennifer Ferris, CCP Compensation Professional

Mykkah Herner, MA, CCP

Manager of Professional Services

www.payscale.com

www.payscale.com

14,000 Positions 3000 Customers 11 Countries

250 Compensable Factors 40 Million Salary Profiles

COMMUNICATING

COMPENSATION

Part I: Gaining Executive Support

Part II: Equipping Your Managers

Part III: Talking with Employees

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Agenda

Recap of Part I: Gaining Executive Support

Recap of Part II: Equipping your Managers

Develop a communication plan

• Prepare your executives to deliver messaging

• Ready managers for different scenarios

Tips for Employees

Immediate Action

Recap of Part I: Gaining Executive Support • Overview of Communication Basics

• Overview of Compensation Basics

Communicating Compensation to Executives

• Understanding the Executive Audience

• Align compensation to business goals

• Incorporate leading edge practices

• Keep executives up-to-date with quick snapshots

http://resources.payscale.com/hr-webinar-recorded-communicating-compensation-gaining-executive-support.html

Recap of Part II: Equipping your Managers

Set expectations with managers

Equip managers for their role • Negotiation skills • Listening skills • Compensation review meeting • Talking points

Present compensation basics to managers

http://resources.payscale.com/hr-webinar-recorded-communicating-compensation-equipping-your-managers.html

Develop a Communication Plan

TACTIC RESPONSIBILITY AUDIENCE KEY MESSAGES TIMELINE

OBJECTIVE 1: FINALIZE COMP PLAN - GRADE ASSIGNMENTS, COMMUNICATION PLAN, POLICY REVISION

OBJECTIVE 2: OBTAIN EXECUTIVE APPROVAL

OBJECTIVE 3: TRAIN MANAGERS ON COMP PLAN AND HAVING EFFECTIVE CONVERSATIONS

OBJECTIVE 4: EXECUTIVES ANNOUNCE PLAN TO FULL ORG

OBJECTIVE 5: SUPPORT MANAGERS TO ROLL OUT COMP PLAN TO THE EMPLOYEE LEVEL

8

Executive Messaging

Prepare talking points for executives, covering:

• Compensation philosophy & purpose

• Compensation plan changes at the highest level

•Next steps – talk with managers

• Approve program

• Communicate program to org at a high level

• Perform manager/supervisor role Executive Roles

Manager Toolkit

• Understand the program

• Communicate with employees

• Get support from HR

Manager & Supervisor Roles

Prepare tool kit for managers, including:

• Compensation plan talking points

• Compensation plan information

• Details for each employee they supervise

• Tips for each type of conversation they may have

Lead The Conversation 80% of employees will compare pay

Finding out where you stack up vs. peers can dramatically change: • Desire to stay/leave

• Overall job satisfaction

• Exert more/less effort

I was approached by an employee who was very upset that her base pay was being frozen. After going through our philosophy, the employees pay compared to the grade and range she was in the employee left the meeting with a smile on her face, feeling positive about the conversation.

Monarch Landing, 300 employees

Source: Card, D., et al., (2011); “Inequality at Work: The Effect of Peer Salaries on Job Satisfaction.”

“Wow! This is what our employees need to see! They only ever talk about what they see in their paycheck, so this would really drive home our total investment!”

Alberta Motor Association - 2,000 employees

Accounting Assistant

Senior Accountant

Accountant I

Accountant II

Grade C Grade E Grade 5 Grade 7

Basic Function & Key Differentiators

• Administrative Accounting Functions to support AP & AR

• Update General Ledger • AP / Vendor Relations • AR

• Maintain General Ledger

• Prepare financial reports

• Interpret financial reports and statements for management

• Analyze financial data • Prepare budgets

Degree & Certification Requirements

None Bachelor’s Degree No certification required

Bachelor’s Degree CPA required at proficiency

Bachelor’s Degree CPA required at start

Critical Skills at proficiency

• Attention to Detail • Excel • Data Entry • Quickbooks

• Attention to Detail • Quickbooks

• GAAP • General Ledger • Monthly Reconciliation • Financial Reporting

• GAAP • Financial Reporting • Financial Analysis • Budgeting

Years of Experience

• 1-2 at proficiency • 3-5 at proficiency • 5-7 at proficiency

• 8-10 at proficiency

Anticipate Employee Questions & Concerns

Employee Pay is Low

Consider Should the employee pay be low?

Is the organization able to adjust employee pay?

14

Talking Points Start by appreciating accomplishments

Mention market movement of the position if applicable

Explain position in range

Remind of last year’s adjustment amount if appropriate

Discuss what you will or won’t do for increase or bonus depending on skillset, performance, etc.

Open the door

Employee Pay is High Consider Is the employee truly red-

circled?

What does the employee need to move to the next level?

Does the organization need that work performed? And if so, are they willing to pay?

15

Talking Points

Start by appreciating accomplishments

Mention market movement of the position, or lack thereof

Explain position in range & organizational policy

Remind of last year’s adjustment amount if appropriate

Discuss what you will or won’t do for increase or bonus

Open the door

Employee Given No Performance-based Increase

Consider What does the employee need to be

eligible for the next round of increases?

What potential does the employee have to move up in the organization?

16

Talking Points Start by appreciating contributions

Remind of performance issues

Explain position in range

Discuss what you will or won’t do for increase or bonus depending on skillset, performance, etc.

Explain what they need to do to be eligible next go round

“I FOUND A

SALARY

REPORT

ON THE

INTERNET” o Conflicting

information

o The “independent study”

o Position pricing vs. people pricing

o The conversation

17

Additional Tips for Managers

Consider the Employee Perspective

The employee is often going to want:

More money

Promotion

To be paid like their peers

To understand why others are paid more than they are

19

Defining the Generations

Identify Creative Solutions

When more money isn’t an option:

Know what the employee’s interests are; what will motivate them?

Additional/alternative perks

FTE preference

Staggered increase or offer

PTO

21

Immediate Actions • Connect with your employees about what motivates

them

• Identify conversations about compensation you need to have with your employees

• Develop clear career paths

• Prepare any high level messages about comp

• Prep toolkits for your managers to use when communicating with employees

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Jennifer Ferris, CCP Compensation Professional Mykkah Herner, MA, CCP Manager of Professional Services, PayScale, Inc.

www.payscale.com