I sent a letter to my love….and on the way I dropped it…..
This Valentine’s Day you will probably either send or receive a valentine from someone. More than a billion are expected to be given away in the United States alone. For many there will a certain amount of associated angst; will you receive one from that special person? How will your own special message be received?
But for those of us working in compensation our focus at this time of year tends to be on a different sort of communication, as it’s also a busy time for generating annual compensation statements for employees. But there is just as much angst in this exercise, and to stretch the analogy, and examples abound where we as employers “drop the ball" on communicating pay. So why is communicating pay so hard?
It's hard to talk about money
Well firstly, pay is ultimately money and people don’t generally like talking about money, it’s an uncomfortable subject. Do you broadcast to your friends and family how much you earn? Probably not, so if you are uncomfortable talking with your nearest and dearest, you can also understand why we feel uncomfortable talking about it in the workplace.
First things first
And there are a number of reasons why pay conversations are uncomfortable. Pay has very personal implications for employees, it impacts their livelihood and lifestyle – although there is debate currently about how much of a motivator pay is, we know it’s a fundamental component in Maslow’s Hierarchy of Needs and you need to get pay right before you can focus on more intrinsic employee needs. Pay also to some degree quantifies worth – as an employee’s rate of pay is often determined by the skills and experience they bring to the table and so kind of represents how much you value them as an employer. For many, pay is also intrinsically linked to performance through traditional Pay for Performance schemes, and so can quantify what you think of their performance, which may be a very different opinion from how they think themselves.
Helping management communicate pay
Let’s also think about the manager’s perspective after all, they are predominantly who we rely on to communicate pay. From a strategic perspective pay is just like any other expense cost, an investment to drive business productivity, but because it is personal to people and for all the reasons I have just mentioned it can also be an awkward subject. Managers are also caught in the middle of HR and employees; they have to follow strict guidelines regarding pay, but they also want to keep their teams happy and engaged. Ultimately most are unprepared for the discussions – in HR we think we have done our job if we have sent them a nicely articulated policy or briefing document – but practically we don’t often prepare them for actual pay discussions, especially for push back from employees.
More tools for talking about pay
In our recent webinar we addressed the challenges of compensation communication and how to deploy an effective communication program, how to prepare line managers and employees for open conversations around pay including those tricky conversations no one wants to have. To find out more see the webinar on replay here.