We’re pretty passionate about Modern Compensation at PayScale. We recently did a #WorkTrends event with TalentCulture where we proselytized the value of doing modern comp and having a thoughtful and visionary comp strategy that is fair, transparent, and modern. Tim Low, our SVP of Marketing, went as far as to urge people to consider their pay brand, and how they will use that to win the talent war. As workforces and workplaces evolve, modern comp is the thing that can help organizations motivate, engage, and attract the people they need to triumph over the competition. What’s the trick? It’s about people.
Sometimes in our haste to comply with increasing regulations about pay, we forget that the point is the people. Our organizations can have all the goals in the world, but without the right people to do what’s needed to accomplish those goals, we’ll never get there. And pay is very personal to people. It can mean the difference between getting a larger apartment or house, enrolling kids in the dance class of their dreams, or maybe taking in a show from time to time. There’s some fine line that organizations walk between too personal and not personal enough. Modern Compensation helps walk the line with its focus on being fair, transparent, and modern.
What does it mean to be fair in modern compensation? It means making sure that you’re paying people right. “Right” can mean a lot of things. Pay them right according to the market value of the job. Pay them right according to their demonstrated results and performance. Pay people right based on their experience and skillsets. Employees and Employers are in this ongoing relationship where they’re continually assessing their “deal.” Each side does this ongoing calculation to ask themselves whether they feel the value exchange is still fair. Make your decisions stronger by sharing data, which leads to the second pillar of modern compensation, transparency.
Pay transparency remains a fairly hot topic, between CEO-to-worker ratios and protections for employees to talk openly about pay. Some organizations fail to see the opportunity in transparency. Once you have your fair comp plan in order, it then becomes a recruiting and retention tool to help engage not just millennial workers, but your whole workforce. Dial it in right for your organization and consider the whole spectrum. Transparency doesn’t have to be all or nothing, and in fact some of the steps in the middle will likely work best for your organization. Most conversations about pay happen between managers and employees, so decide how transparent you want your managers to be when they start talking.
What does it actually mean to be modern in a compensation context? It means bringing compensation into the new millennium and beyond by using technology to comp smarter not harder. It means finding the right data set for your organization. For some, to be competitive in the market requires having data that is always on, that captures trends at the quarterly or even monthly level. Some jobs are moving really fast, and fresh data is the way to keep up for those jobs. Maybe most importantly, it means bringing comp out of spreadsheets and into executive meetings where compensation strategy gets linked directly to organizational strategy. Doing so will help you prioritize pay for the initiatives that matter most in your organization.
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