Communicating Compensation: Talking with Employees

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Employees need to know that they are being compensated appropriately for their level of contribution. Messages about compensation may come from Executives, HR, or their managers directly.

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Communicating Compensation: Talking with Employees

  1. 1. Communicating Compensation: Talking with Employees Jennifer Ferris, CCP Compensation Professional Mykkah Herner, MA, CCP Manager of Professional Services www.payscale.com
  2. 2. www.payscale.com 14,000 Positions 3000 Customers 11 Countries 250 Compensable Factors 40 Million Salary Profiles
  3. 3. COMMUNICATING COMPENSATION Part I: Gaining Executive Support Part II: Equipping Your Managers Part III: Talking with Employees
  4. 4. www.payscale.com 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
  5. 5. 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
  6. 6. 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
  7. 7. Develop a Communication Plan
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. Anticipate Employee Questions & Concerns
  14. 14. 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
  15. 15. 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
  16. 16. 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
  17. 17. “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
  18. 18. Additional Tips for Managers
  19. 19. 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
  20. 20. Defining the Generations
  21. 21. 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
  22. 22. 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
  23. 23. PayScale Delivers Where Other Compensation Providers Fall Short PayScale leads the world in compensation knowledge with the freshest and most detailed data from over 40 million salary profiles. More than 3000 organizations use PayScale’s software and intelligence to get the greatest return on their talent. Smart businesses use PayScale Insight to recruit, retain and motivate their people. Visit our blog: www.payscale.com/compensation-today Join our Group on LinkedIn: Compensation Today: HR Best Practices Jennifer Ferris, CCP Compensation Professional Mykkah Herner, MA, CCP Manager of Professional Services, PayScale, Inc. www.payscale.com

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