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WORKSPAN DAILY |

Comp Transparency: Honesty, Not Just Policy

Editor’s Note: Workspan Daily will be reproducing a monthly Compensation Café blog post for the benefit of our readers and to encourage further discourse on topics vital to compensation professionals. New to WorldatWork? Please feel free to join the discussion in our Online Community or send your thoughts to workspan@worldatwork.org.

A disgruntled employee has come to see you. “Bob Carter” has always been considered a rock solid, dependable worker; someone his supervisor has consistently rated “satisfactory” on your company’s performance rating scale.  But Bob is not happy with his pay increase. 

He’s at your door right now to complain.

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Word around the office, says Bob, is that increases this year are averaging 3%. Since his supervisor told him he’s doing “a fine job,” he had expected more than the average raise, but his increase was only 2.5%. That’s not fair, he's thinking.  Yet when he complained, his supervisor told him there was nothing to be done; there was a formula in place that everyone had to use.  Anyway, human resources set the rules and he couldn’t do anything about it. The supervisor even suggested that he had wanted to do more for Bob, but that his hands were tied.

So Bob is coming to see you, his HR manager. He’s worked up a steam of righteous indignation and hasn’t been quiet about how unfairly he's been treated. Chances are several other employees already know what Bob wants to talk about.

Poor Communications

Does this scenario sound familiar? Have you ever been in the HR manager’s position? What you’re seeing is the result of poor communication regarding your compensation program. The employee doesn’t understand how increases are determined, and the supervisor is either similarly in the dark, or wishes to pass the problem along to you with a shrug of the shoulders. He doesn’t want Bob to be mad at him!

Given the importance of pay and recognition to every employee’s state of mind, can you afford to allow the problem reflected by Bob's attitude to fester? Because it is a problem, especially when the only one communicating at this point is the aggrieved party, and those who sympathize (nodding heads, murmurs of agreement, other personal stories gossiped about that emphasize systemic unfairness, etc.).

Sad to say, companies often find themselves in this quandary because whatever communication effort they made was limited to telling employees the “what” but not the “why" (listen up; here is what is going to happen). But isn’t it the “why” that employees most often question? Who should have those answers?  You, of course, but oftentimes even you are caught short. So, are you prepared to answer Bob’s questions?

Supervision should know as well, as they are supposed to be the first line of employee communication. Do you find that they are partners with HR in dealing with employee concerns, or do they pass the buck and send their people to you?

Who do you think knows where the 3% figure came from, and how Bob’s increase relates to it?  If Bob was the victim of a formula that dictated his increase, where did that rule come from and what is the reason for it? Is there anything that can be done for Bob?

The impact of misguided communications is usually a disengaged employee, one who is skeptical about the company’s intent and quite capable of gaining sympathy while spreading a negative message. Left to fester, negative attitudes can easily become a wider employee relations issue as general morale worsens. And once the company is perceived as an untrustworthy partner in the working relationship, it will take a great struggle to make things right again.

The Company's Attitude

Should the company care about how employees think and feel? Does your senior management worry about morale? Do you need an engaged workforce to be successful? Is the company’s reputation with its employees important — and whether that reputation becomes more widely known?

The company’s attitude means a great deal to its employees. Over time the impact of a disengaged workforce, or even a key group of employees, can be financially significant.

It's not difficult to maintain a trustworthy relationship with your employees. The people that work for you need and deserve straight answers to the questions that concern them. So, don't attempt to confuse, complicate or generalize your message with bland “corporate-speak.” After all, employees can be trusted to handle the truth, even if it’s bad news, if they believe you are being honest with them.

When I worked on your side of the desk, I consistently found that employees would accept a straight-from-the-shoulders story, even one that negatively impacted them, a lot better than the patter of broadly worded generalities that attempted to disguise what was really going on.

And if you don’t know how the company’s pay programs work, find out. Don’t be part of the problem by thinking that employees will be satisfied with a simple quote of the company policy.  Become part of the solution by making sure you can answer the questions your employees are going to ask.

Or know where to get those answers.

About the Author

Chuck Csizmar Bio Image

Chuck Csizmar CCP is the founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations. He is also associated with several HR Consulting firms as a contributing consultant.

This article was first published at Compensation Café on Nov. 17, 2020.


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