6 Tips for Building a Culture That Removes the Taboo From Comp Conversations

A few weeks ago, I spoke on a PayScale webinar with Rusty Lindquist from BambooHR called “Tough Comp Conversations: A Guide For Doing Them Right.

One of the questions an attendee asked jumped out at me:

“What comes first — a culture that encourages talking about comp, or wanting to talk about comp and then changing your culture? What are the key things to do to change your culture to encourage more pay conversation?”

These questions made me curious to know the questions behind the questions. More importantly, it made me want to understand the current culture within this person’s organization. Where exactly does this company feel friction when it comes to talking about pay? Does leadership encourage transparency and communication, or do they feel the pressure from the employees who are simply knocking on every door for someone to talk to about their pay?

Unfortunately, we do not know the inner workings of this organization and after spending maybe too much time over-analyzing, it just makes sense to assume that this individual, like many others HR professionals, is simply wondering where to even begin.

My co-speaker on the webinar, Rusty, shared six key things we can do to have more open and fruitful pay conversations. I am going to expand upon his comments in this post. By practicing these elements, you’ll be able to show your leadership and employees that it’s safe to start a conversation about pay and encourage that culture change.

1. Be Open and Honest

If you want your employees to come to you with their comp questions and concerns, you’ll have to show them that it’s safe to do so. If you’re closed off, you send the wrong message and impede any honest communication with your employees.

As you listen to the questions and concerns, try to decipher any hidden questions. You should always be curious and you should encourage your managers to get curious as well. Do not turn around and shut down the curiosity of your employees by refusing to answer their questions or concerns.

Be ready for questions that you cannot answer on the spot or ones you simply weren’t prepared for. It is 100 percent OK to have a go-to phrase like: “That’s a really great question. I want to ensure that I provide you with the best answer for your question, would you mind if we circle back to this in our next one-on-one/meeting?” Having a good response keeps the conversation moving forward, and builds trust when you actually do get back to them and answer the question.

2. Take them seriously

If your employees come to you with a comp question or concern, take it seriously even if you do not think it’s serious. Sometimes your employees simply want to know that you have their back no matter how small their issues are. Plus, something that may not be important to you can mean much more to your employee. If they feel that you are not taking them seriously, you are in danger of losing their respect. Not only does that hurt your culture, but it also creates uncomfortable working relationships.

3. Don’t be offended

Compensation is an emotional topic. You and your managers should never be offended by or get angry at the questions that your employees ask about their compensation. Try to recall the questions you had before you became the company’s comp guru. Could you imagine someone being offended by you asking for a raise or questioning why your increase was smaller this year than last year?

Instead of being offended by the question, think of it as an opportunity to have a really good conversation. When an employee asks questions about their compensation, dig in to see if they have other concerns, such as how to move up in your organization. As you learn what motivates an employee, you can open up a new line of communication and educate them on how they might be able to achieve their goals.

4. Be positive and look for opportunities

It can never be said enough: positive actions lead to positive results. When negativity is high, try to refrain from falling victim and going into defense mode.

If you and your managers find yourselves defending the company’s compensation policies or your position on why employees didn’t get an increase, it’s time to take a step back. Then, find the opportunity to reset expectations with your employees or provide additional training and education for managers to tackle these types of conversations. Sometimes there is an opportunity to educate the employee as well. For example, if an employee is finding free salary surveys online and then asking their manager for a raise, they may not really understand what the data is based on versus how your organization prices your jobs.

To shift your culture, it comes down to the recognition that comp is about more than money. As Rusty Lindquist said, “Comp is not just about an exchange of money, it’s about an exchange of value. And the more equipped we are to talk about this exchange in value, the better we are able to sort of navigate these tumultuous waters.”

5. Use market data to make pay decisions and share your strategy with managers and employees

As HR professionals, we have a methodology and process for making pay decisions. Many of us are already checking market data to ensure that jobs are priced competitively and with accurate data. Yet, in many cases we keep that knowledge to ourselves because we assume that managers and employees simply won’t understand or don’t care for this info.This assumption may be the one thing holding back you back from open comp-munication.

Are you are using market data to price your jobs and make pay decisions? If you are, but you aren’t sharing the organization’s pay philosophy and strategy with employees, you are at risk of them searching for answers from sources that may not be apples to apples to your sources.

By sharing information about how you have determined the range for the position and an employee’s range penetration, you can begin a fruitful dialogue. Don’t be afraid to talk about the salary survey the individual has brought to the meeting and state how it differs from the way you benchmark your job (such as the market you’re using to price your jobs). Inform the employee that their current salary is based on certain skills that you are rewarding for the job, and what skills they need to gain to move up in their range.

Maybe your organization is not leading the market in salary, but offers a rich benefits package. You can utilize resources like an Employee Compensation Report (also known as a Total Compensation Statement) to highlight those aspects to an employee. This is extremely helpful when an employee is asking for a raise based on a free salary report they found. You can easily educate them where similarities are and where the companies pay philosophy differs.

6. Be Proactive: Train Your Managers

In PayScale’s latest Compensation Best Practices Report (CBPR), we found that 36 percent of managers are communicating pay decisions. Yet, only 10 percent of organizations are very confident in their managers’ abilities to explain the rationale behind pay decisions.

You can’t just assume that your managers know how to have these difficult conversations. Being proactive means that you are training managers on how to have these conversations and giving them the resources and support they need to communicate pay decisions to employees. By empowering your managers, you’re also effectively changing your comp-munication culture.

Tell Us What You Think

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