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Compensation Café

Value End-of-Year Implementation: How to Make It Important, Worthwhile and Useful

By Margaret O'Hanlon | 3-min read


This article was originally published on Compensation Café and is republished here with the author’s permission.

Here’s what your employees heard everywhere across the country as they grabbed a toothbrush one morning last week:

“Now may be a decent time to ask at long last for a raise…Deep into this long, slow economic recovery, American workers may be getting access to a tool crucial to their increased prosperity. We’re talking about leverage, that is leverage to ask for more money or they will find work elsewhere. “

Oh, boy are we out of practice for these discussions — especially if our companies are not among those offering the 3.5% or so merit increases that the media has begun to announce to your employees!

Yes, it’s only August, but starting your planning now (for once) will give you far more confidence than procrastination will. In practical terms, it will give you time to create schedules, tactics and messages that have been edited and polished. Executives, managers and employees will notice the difference in this year’s streamlined execution and you’ll be more likely to get a full night’s sleep during November’s and December’s cold nights. 

Here are four tips to get you started. Consider them icebreakers if that’s what it will take to kick your energy level up. (And, BTW, I’ve promised at least four more articles on implementation and communication before the end of September.)

1. It’s 2017 and we all need practice — The past few years have been monotonous in the compensation world. Messaging about what it takes to earn “exceptional” increases has become rote. But if the talent market is actually beginning to loosen up, you’ll lose at least 10% of the people you don’t want to lose if you wait to get up to speed until you get turnover reports. Get ahead of the curve by learning what’s on employees’ minds  now and, if necessary, preparing managers to talk over whether the grass is actually greener once you walk out the front door. If it’s going to be a big topic of conversation this year, you don’t want to find yourselves throwing money at people to stay if you don’t have to.

2. Blue sky it — Imagine if you had all the time, money and resources that your really want for implementation this year. What would you do? List what you would have achieved by implementing this way, breaking it down by audiences: Executives, managers, employees. Identify the most important outcomes on that list. Now, how could you achieve them with the resources you actually have?

3. Then, put your end-of-year compensation plans under a microscope — Remember that pay for performance is a form of change management. Yep. Pay for performance is a business process that starts with, “What do we need to do differently this year?” And pay for performance, if done right, is a challenge to each and every employee to break habits that will not contribute to next year’s productivity.

The level of change needs to be examined closely by Human Resources each year.  Are your 2018 priorities:

    • Simple and predictable? Then traditional compensation communications is what’s called for. The messages are essentially reminders. The tactics can lend themselves to straightforward emails. You may or may not need department meetings since what you’ll be talking about is an evolution whose foundation employees should be familiar with.
    • Simple but unpredictable? Or predictable but complex? Then you’re in a place where managers, not HR are the main communication channel. Recognize that the job is not emails, but equipping managers to change employee attitudes and perhaps behaviors. This will involve multiple forms of communication (until people “get it”) and training (so people accept that new behaviors are expected of them). This year’s higher compensation budgets are a good example of this level of change, so I bet this is where most of you will find yourselves. Having higher merit budgets gives the false impression that everyone will be happy and easy-going. The fact is, it will be far more complicated since employees have long repressed their feelings about how the national scandal of low wages has affected those they love.
    • Complex and unpredictable? For example, is a merger or acquisition on your horizon? Don’t wait until the execs have everything pinned down or you can bet on sleepless nights. If you tell yourself the truth, there are no more than three scenarios that you could be asked to execute.  Get your mind around each of them, specifying their goals and identifying the resources you would need to deploy. This preparation will enable you to brief executives, and you’ll be that much further ahead when you’re given the green light.

4. Don’t kid yourself — Pay for performance is also a form of teaching. You can’t “update” the communications you used last year if you are a committed compensation professional. Managers and employees need to learn from you and your CEO at the close/open of every pay-for-performance cycle.

Margaret O’Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. Margaret is a Board member of the Bay Area Compensation Association (BACA). She coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.