Do You See What I See? The Perception vs. Reality of Pay Transparency
Perception is reality, or is it? The most challenging task I find not only as an HR professional but as a human being is managing people's realities and shucks; I have to check my perception of situations, people, and attitudes at times. Our perceptions are the conclusions we draw in the absence of information. Let that sink in for a moment. By not communicating with employees, we are allowing them to create their own narratives, which then, in turn, creates perception, which can cause dissent and disengagement.
If you are an organization affected by the Pay Transparency Laws and have not already begun to prepare on how you intend to manage employee perceptions come January 1st, you are behind the ball; imagine Wiley Coyote trying to outrun that big boulder that the Roadrunner put into motion by the tap of his talon. It is that BIG of a BOULDER….by the beginning of 2023, a fifth of all workers nationwide will be covered under pay transparency laws. Pay transparency laws are so much more than posting salary ranges or providing salary information to job applicants.
The legislature creates an opportunity to enhance and enrich the conversations with employees about your organization's compensation and rewards. Ineffective communication causes workplace anxiety for 80% of US employees (SoftActivity, 2021). Don’t miss out on an opportunity to be in front of this narrative to help shape employee perception, put them at ease, and keep them productive by demonstrating that you have a fair and equitable compensation philosophy.
Whether you are mandated to abide by pay transparency laws, looking to get ahead of the game, or outrunning that boulder, this is a prime opportunity to increase employee engagement by creating a culture of transparency and trust surrounding employee compensation.
Follow these steps to start creating your organization’s narrative around compensation:
Know your compensation philosophy - If you don’t have one, this is the time to develop it – know your market position and where you want to be, commit to pay equity, and describe how you plan to achieve it.
Decide on your processes – How does performance influence pay? What are your guidelines and criteria for promotions and merit increases? Do you reward your employees? Do you have a process for paying out bonuses?
Conduct a pay audit – Know your blind spots before they are pointed out to you; this is the best way to spot gaps in pay and set aside budget dollars to correct any discrepancies that need to be fixed.
Educate your leaders - Ensure they are equipped to disseminate and educate employees regarding compensation by understanding the steps and the process used to manage employee compensation.
Determine how you will communicate with your employees – it’s essential to have conversations regarding employees' compensation throughout an employee’s life-cycle; provide leaders training and arm them with the correct information to preventatively and proactively address employee questions and concerns.
Monitor your compensation philosophy to ensure that as the organization grows and matures over time, you can quickly respond to internal and external factors while maintaining your core compensation principles.
Trust begins with communication; if your employees don’t understand your compensation philosophy, they won’t be able to trust that your organization is delivering compensation fairly and equitably - Employees will create their own narrative. The time is now to squash inaccurate employee perceptions of compensation; choose to show them your organization's Reality.
Are you still trying to figure out where to start? People415 can partner with you to create your compensation philosophy and avoid civil penalties of $100 to $10,000 per violation and other legal action.
References: https://www.apollotechnical.com/workplace-communication-statistics/#:~:text=Ineffective%20company%20communication%20causes%20workplace,and%20productivity%20will%20improve%20drastically
