Better Pay Communication: Improving the Workforce Experience

Despite the best efforts around communication from companies, most people tend to believe they are underpaid. Even though they are being paid the market rate, nearly 2 out of every 3 people believe they are being paid less than the peer group. With higher pay being one of the major reasons why people quit, you need to make communication around pay more impactful and strategic

Defining pay communication
All communication around pay, with employees and job applicants, is defined as pay communication. It could include individual components of salary, bonuses, benefits, merit increases, and equity.
In addition, it could also include the overall approach to pay strategy, pay ranges, and the decision-making around how pay is revised.
It can be strategic pay communication, which focuses on regular two-way dialog with employees. Or, it can also be ad hoc in response to concerns or issues highlighted by them.
The importance of pay communication
Structured and strategic pay communication can significantly improve the workforce experience (Wx). It helps people feel valued and respected for their contributions.
In addition, by pre-emptively addressing any concerns that you foresee, you can nurture a positive Wx for your people.
Higher productivity, more trust in the organization, and improved retention rates result from effective pay communication.
Making pay communication effective
Effectively communicating pay requires positive intent coupled with being more people-centric. Some strategies you can use to make your pay communication more effective are:
1. Train people: Often, managers shy away from talking about pay because they feel ill-equipped for these conversations. Similarly, employees avoid discussing pay because they are unsure what to ask.
Training managers and team members can help create effective dialog around pay, resulting in clear and effective two-way pay communication. In addition, it can take some of the pressure away from HR teams to step in and address all pay-related questions.

2. Articulate your philosophy: Link your pay philosophy with your business objectives and communicate it to your people.

Explain the linkages of pay and performance as well as the outcomes of great performance. Help people in understanding how pay ranges work and how to move up the range through performance.

3.  Explain total rewards: Help people understand the total rewards package with an emphasis on the pay as well as the benefits. In case you have other developmental initiatives or recognition programs, make sure these are well-understood.

Satisfaction with total rewards contributes significantly to Wx and can be a powerful recruiting and retention tool.

4. Normalize off-cycle conversations: Don’t wait for the annual cycle to complete before launching an avalanche of communication that ends up confusing everyone.

During the year, consider creating a calendar of relevant information that you would like people to know about. In addition, by hearing from people, you can make the necessary adjustments to pay and pay communications.

Irrespective of whether people talk about pay, it is constantly in the back of their minds. By proactively addressing questions/concerns around pay, you can create a Wx that engages, energizes, and elevates your people.
For an in-depth chat about better pay communication, reach out to us at [email protected].

About the Author

Sam Reeve
Sam Reeve, CompTeam founder and managing consultant, is a pay and talent performance expert and a certified global compensation professional. His extensive experience with pay programs and competitive compensation analysis, career architecture, and talent management allows him to help clients of rapidly growing firms see accurate, measurable results, including increased productivity and significant pay savings, year-over-year.
As an innovative thinker with practical application, Sam strongly believes that everyone needs to be healthy and happy in their own lives to strive as a high-performing contributor. He is driven to help organizations match their employees with the work they are passionate about and reward their people for outstanding work.
Sumit Singla 
Sumit has been working in HR & HR consulting roles for 16+ years across sectors and verticals and specializes in
organizational design, well-being, storytelling & design thinking, and performance management. In his career with consulting firms such as Aon, Deloitte, and Accenture, he has successfully led programs aimed at total HR transformation for clients.
As Associate Director for India Consulting at Deloitte, he recently worked with clients on cultural transformation, HR processes, and policy design. He also organized and spoke at conferences and events about various topics relevant to HR today.
Now self-employed, he works with clients across the globe on various HR solution areas.
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