As a product manager, one of my favorite activities is hopping on calls with our customers to talk about all things compensation. I love talking to our customers—so much so, in fact, I recently was shushed by our software developers who sit next to me in our open office environment. This past year, I’ve conducted an extensive amount of research to gear up for our latest product release at PayScale, Crew. It has been fascinating to have an opportunity to connect with managers within organizations to get their perspective about how compensation affects their role. PayScale Crew helps incorporate manager decisions on employee pay, streamline the process of increases, and perhaps most importantly, align managers and HR on the same page. In order to create a product that really helps, it was important for me to better understand managers who are involved in compensation decisions at organizations. It was an eye-opening experience that really allowed me not only take their feedback into consideration, but also helped me to understand the relationship between HR and managers a bit better. Here were 3 key observations based on the manager feedback I received.
“I know my people better than HR does”
While this is a statement I heard from a manager, I’ve heard this from HR as well. Managers do know their employees and the jobs better than HR—if they don’t, then there is likely a much larger problem. When managers feel that they are heard and are able to give input, it builds confidence and trust between HR and them. When interviewing a manager of a customer who used our product to facilitate pay increases, the manager shared the above quote with me. He told me a story of a top performer who he believes does the job of two of his regular employees. He said that through the process of his discussing this employee with HR and using our tools, “normally we are arm wrestling but I think she is starting to understand where I’m coming from.”
When it comes to compensation guidelines, if you involve your managers to verify that you’ve identified the right factors for the role, they have more confidence that the job is appropriately defined when you share with them the pay range. It helps to choose a compensation data provider that allows you to account for all of the purple squirrel attributes your managers believe are key to their roles. If you ask your managers to be open with you about the job, be sure you have a database that provides you with a wide option for choosing the best matches to your competitive market.
“Is this for me or for them?”
A senior leader I spoke with shared his experience in past organizations of receiving The Monstrous Spreadsheet from his HR department filled with columns and rows for each data point for his employees. He was overwhelmed with information, it was more than he needed to make his decision, and he would ask himself the question, “did my HR team make this spreadsheet for me, or for them?” This comment was eye-opening to me. More is not always more, especially when it comes to compensation data. Columns filled with comp jargon such as compa-ratios aren’t going to help managers understand the decisions they are making. It’s about making compensation approachable and speaking a language managers can understand. So, before sending out massive spreadsheets to your managers, which is both time consuming for you to build and hard for them to understand, ask yourself, will my managers understand this information I’m sharing with them? Instead, focus your time and energy on the connecting with your managers to help them understand the compensation strategy the business is trying to achieve.
“Talking about pay is hard”
Research shows that 75% of conversations with employees about pay come from their manager. And, in many of my discussions with managers, those conversations about pay with employees is not the manager’s favorite thing to do. In my feedback sessions with managers, when asking how our product could have been more helpful to them, they repeatedly asked if they could have more resources or talking points to help guide the conversations with employees.
Pay conversations can be stressful and can be even harder when managers don’t have a solid understanding of the rationale behind compensation decisions. I often hear from HR leaders, “the worst thing my managers can do is walk into that conversation with an employee and say, here’s your increase, HR made me do it.” So, it’s imperative that organizations not only provide managers with the right training around compensation, but that they involve them in the decision-making so that they both feel more empowered and also don’t throw HR under the bus.
At PayScale, we believe that compensation is a team sport—and my focus is to build world-class products to provide the team with the equipment they need to play and win!