A study conducted by PayScale revealed that employees’ perceptions of how they are paid are a better predictor of their intent to stay than their actual fair pay to the market. These implications create a huge opportunity for employers to get it right when it comes to communicating pay effectively. Conversations about pay are often perceived as scary, demoralizing, or just boring. However, done right, pay talk can be quite motivating.

1. Communicating
Pay to Employees
Mykkah Herner, MA, CCP
Modern Compensation Evangelist
Paige Hanley, CCP
Sr. Compensation Professional
Communicating Pay
to Employees

2. 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

3. Understanding How
Pay is Perceived

5. Feeling appreciated, valued, and adequate rewarded for your effort.
Value
Total rewards
Va Value
Rewards Recognition Pay
What you get from work

6. Comp is about an
Exchange of Value
Not just Money
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

7. Bias at Work
Confirmation
Bias
Assimilation
Bias

8. Perception of pay matters

10. Five
Generations
of 2020
Gen Z
Millenials
Gen X
Baby Boomers
Traditionalists
Bureau of Labor Statistics Employment Projections

11. Lead The Conversation
80% of employees
will compare pay
Source: Card, D., et al., (2011); “Inequality at Work: The Effect of Peer Salaries on Job Satisfaction.”

12. Train Managers
To Talk About Comp

13. of organizations feel very confident in their managers’
ability to have tough conversations about pay
19%

14. Comp is about an
Exchange of Value
Not just Money
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

16. Communication Roles
(and Times)
Executives: Communicate program to organization at a high level
Managers: Communicate compensation details to employees
Employees: Bring questions to
manager or HR
HR: Prepare communication, consult and inform Executives, train Managers

17. Tips for Effective Employee
Communication
• Know your audience!
• Tell a holistic story
• Make the path forward clear
• Prepare, Prepare, Prepare
• Be direct and also empathetic
• Communicate early and often

18. Drive Greater Transparency

19. Anticipate
Employee Questions

20. Employee Pay is Low
Consider
• Should the employee pay be low?
• Is budget available?
Talking Points
• Start with appreciation
• Mention market movement
• Explain position in range
• Provide context
• Share this year’s increase amount
• Open the door

21. Consider
• Is this really another job?
• Does the organization need it?
• Is the employee qualified?
Talking Points
• Start with appreciation
• Mention market movement
• Explain position in range
• Provide context
• Share this year’s situation
• Open the door
Employee Pay is High

22. Performance doesn’t warrant increase
Talking Points
• Start with appreciation
• Mention market movement
• Explain position in range
• Provide context
• Share this year’s situation
• Open the door
Consider
• How can they get up to par?
• What future potential is there?

23. Perception of Increase is Unfavorable
Consider
• Will they perceive their
adjustment is fair?
• How connected are they with
others?
Talking Points
• Reiterate accomplishments
• Re-focus on individual objectives
• Remind of market value
• Discuss why their pay is fair
• Open the door

24. “I found a
salary report
online”

25. Get Specific:
Use Data

26. Employee
Report

28. Additional Tips
For Managers

29. 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

30. Identify Creative Solutions
Consider Workplace “Currency”
• Paid paid vacation
• Additional/Alternative Perks
• FTE preference
• Staggered increase or offer
• PTO
• Work assignments
• Development opportunities

31. Rental
Coordinator
General Manager,
Rental
Rental
Coordinator
Supervisor
Rental Manager
Grade 3 Grade 5 Grade 7 Grade 12
Identify Development Opportunities

32. 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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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