The case for improved transparency around pay is not a new one but one I have decided to re-visit given the current economic climate.
With the Bank of Canada signaling an economic slowdown for 2012 due to the effects of global belt-tightening, employers are also likely to again walk a fine line between managing employee expectation around pay and the company’s ability to meet those expectations. This has been compounded by a few halcyon years that planted some healthy seeds of entitlement amongst certain employees.
In a recent survey conducted by DesJardins Financial, Canadian workers feel healthy and fit but 30% more stress than last year. When prompted, survey participants said that their top stressors were an insufficient salary (30%), work overload (27%), a lack of recognition (22%) and a negative work environment (22%). Interestingly enough, only 14 per cent named work-life imbalance as a source of stress.
You don’t have to be Sherlock Holmes to see the impact that always accompanies economic uncertainty. Employers feel like they are driving through a dark, winding tunnel – they can just about see the end of the car but cannot really say when we will be out of the tunnel. Employees thought they saw light at the end of the tunnel but then realized it was their boss holding a flashlight and carrying more work and providing little to no extra reward & recognition!! The bottom line seems to be “You don’t pay me enough to deal with this crap!”
The net result resembles the stony silence between Employers and Staff that you may see in a marriage guidance office.
You get the point………
So what is the solution? Well, I do not pretend to have a silver bullet and suggest that there is a single approach which will instantly turn night into day and see your engagement scores go through the roof.
That said, I don’t like to continually admire a problem without looking at solutions and, as an HR practitioner , who has spent most of his time in Compensation, I do have some natural bias around the what and the how.
I think the natural course of action is to get the estranged couple talking again and what better subject than pay and how it works, after all it seems to be causing some stress.
A simple approach can set you on your way:
• Understand the current landscape:
o What are you doing / not doing today? Talk to your staff and manager, develop your problem statements
o Who will likely support or resist this? Identify early on your players
• Define your scope:
o What do you want to improve? Make sure you are talking about the right things
o What approach do you want to use? Get managers involved as much as your Comp staff
o Define your frequency
• Leverage your stakeholders to Implement:
o Don’t just rely on immediate managers to deliver this, leverage support from more senior levels.
I recognize that the “P” word (pay that is) can invoke a certain awkwardness from Managers who feel ill-equipped to know how to have those sorts of conversations. Equally, Compensation professionals are reluctant to share their knowledge of the dark arts when confronted by a group of “magazine professionals” (those who read an article at the weekend and now considers themselves an expert).
There is a balance required here. I am not suggesting de-motivating staff to the point suicide if things are not going well or conversely over promising in good times. However, it is also folly to think that you work with people who don’t want to know this, even if the news is tough. People have a load more tolerance and acceptance of tough news when it is delivered in simple, honest language. In my work with leadership teams over the years, I am constantly surprised by the need to apply a political veneer over simple messages that distorts the original intent and changes the impact. I am even more surprised and concerned that leaders think that their staff will believe it. In technical terms, it is called anaklesis – where truths are avoided for fear of damaging a relationship.
The reality here is that if employees feel that they are getting “bad information” then they will seek out answers elsewhere – family, friends, other colleagues etc….
A simple test here would be to ask your staff whether they have too much information or have been over-communicated to around their Total Rewards package. A little trite I agree but I hope you get the point.
My bias here is that I think the practice of elevating the transparency of pay-related discussions is far more important than the context of whether there is economic uncertainty or not.
For those that do want to take the leap of faith and can overcome organizational resistance, the opportunity and the payoff is huge if it handled right. The Corporate Leadership Council report that the average organization can improve employee intent to stay by 34%, and the effort employees put into their jobs by 15% by improving transparency strategies.
Whether it’s to improve the expensed value of pay vs. the perceived value or to ensure everyone understands how your plans work, the facts are undeniable that plain, simple language that puts your staff in a more informed position will drive perceived equity, belief in fair treatment, attitude towards manager and more importantly level set future expectations. It sounds easy. In practice, it is hard work but one that can define your culture, your values and restores trust and integrity into employee relations.