Deciding how to best reward employees used to be a fairly straightforward, yet ineffective, process. Today, simplicity no longer reigns; employee compensation is undergoing an avalanche of change.
Ranging from an increase in state and local laws that forbid asking for pay history during hiring to raising minimum wages, deciding who is eligible for overtime or boosting gender pay equity, HR leaders face myriad challenges on the pay front. Toss in the emerging focus on correlating pay with performance, and things get really complicated.
When the pay complexity landscape increases, effective communication is indispensable if you desire a productive, happy workforce, according to Joe Larocque, Vice President of Solutions at Guidespark.
“Pay… is a key element in talent management and how we pay is changing dramatically,” says Larocque. “Pay is becoming much more complicated. Apart from the legal issues, there’s so much noise out there when it comes to the publicly accessible pay data.” Larocque cites websites including Glassdoor and PayScale, where employees may access salary specifics, ranges, and more.
“It has been shown time and again in surveys that most employees don’t feel they’re paid fairly, so we have this reality chasm,” Larocque adds. “Employers need to establish a much more marketing-driven communications plan around their pay and rewards strategy to fill in that chasm.”
Larocque offers two critical areas to consider in creating a compensation communications plan: One an execution strategy, the other more philosophical.
Delivery via marketing
Regarding delivery, compensation communications today should move away from handbooks, long meetings, and mailers – “all the stuff that really hasn’t changed in the last 20 or 30 years,” Larocque explains. “I mean, my parents got those handouts.”
Instead, HR should envision communications as a marketing funnel. Employees today are busy and distracted: HR needs to get them to stop for a moment and think about compensation issues.
“Let’s recognize that and try and create communications that cling into the gaps they have in their lives,” he says. “If they are commuting to work or in the line at the grocery store, it needs to fit whatever space is available.”
What will work, Larocque notes, is the marketing principle that you need to offer someone a message seven times (preferably in seven different ways) before they take action.
“The idea is to try and build a communications strategy that provides the ‘nudges’ that ultimately gets to those right outcomes,” he says, adding that communication campaigns will include a variety of content, but especially video, which has been exploding on the marketing scene.
“That medium is so rich, and powerful, and really a great way to communicate inspirational messages that really build momentum for people to pay attention to something,” he says. “The approach is to really think about the problem like a marketer would. And that means that really take a sort of a campaign-based approach to the problem. No more once-a-year conversations around pay. So many of the HR programs now are becoming much more informal and continuous.”
Above all, authenticity
The second guiding concept in communicating compensation? Honesty. According to Larocque, not even great marketing can overcome a lack of transparency, or “authenticity,” in discussing pay. A PayScale study found 82% of employees felt satisfied at their company, even if they believed they were underpaid, as long as they understood why. This opens the door for HR to have human conversations about growth and compensation.
“The challenge is how do we make pay decisions that are consistent with this high-level philosophy?” he says. “And how do we have that conversation that helps an employee understand what they need to be doing differently to earn more?”
Managers need to focus on individual performance and how it relates to pay. Larocque says that means facilitating a high-value, person-to- person dialogue between worker and manager, along with ensuring that quality feedback occurs regularly to maintain the human connection.
“Compensation requires offering a communication strategy that offers the personal touch, like it was created for me and my organization, not something that feels artificial,” he says. “Authenticity is super important. It’s about building trust – a true challenge in the digital world in which we now exist and work. But it can be done.”