Communicating Compensation: Who Should Say What When

July 24, 2017

This is an excerpt from our recent ebook collaboration with BambooHR entitled Everything You Need to Know About Communicating Pay. Download the full ebook here.

Responsibilities and Timing

Everyone in the organization has a role in the compensation conversation, but the timing is different for each job function.

HR’s role is to get the program ready, continue communicating updates to the executive team and train the management team. Executives are responsible for approving the compensation plan and communicating it at a high level to the company and, as they’re also managers, carrying out the manager communication duties.

A best practice is to prepare talking points for executives. These should cover compensation philosophy and purpose, compensation plan changes at the highest level and next steps.

The role of managers is to understand the program, communicate the information to their employees and seek support from HR if needed. Managers can talk compensation — when given the tools, resources and training to do so. With adequate support, managers can act both as agents of the organization and advocates for employees. Saying things like “Go ask HR” or “HR won’t let me” undermines their own authority. We should work to counteract the instinct to use these phrases, and instill the idea that HR is there to support, not hinder.

Saying things like “Go ask HR” or “HR won’t let me” undermines managers' own authority.

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A good toolkit for our managers might include:

Compensation plan talking points
Compensation plan information
Details for each employee they supervise
Tips for each type of conversation they may have

At the employee level, people need to be encouraged to bring questions back to their managers or HR. This is important because if employees feel like this is a top-down rollout with no opportunity for feedback, they feel like victims with no power. Make sure you keep the doors open.

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Tips for Effective Employee Communication

There are some basics to master for effective compensation communication (and also for communication in general). They are:

Know your audience. Frame the conversation with the appropriate context and terms that will resonate with a particular audience. For example, execs will likely want to hear things in the context of organizational outcomes, and by communicating from that angle, you ensure your message is heard.
Tell a holistic story. Tell the full story of compensation — it’s an exchange of values. If you fixate on pay, your listeners exclude from their perception all the other things the employer brings to the table in the compensation equation.
Make the path forward clear. Don’t present issues without a way forward – make sure all employees know how they can improve their earning potential. Everyone needs to know what they can do to impact their own pay. The moment someone feels like they have lost control, they have no impact or the path is ambiguous, they begin to feel helpless, and that’s an emotional detractor.
Prepare, prepare, prepare. These are emotionally charged conversations — come prepared! Comp conversations are an opportunity to communicate to an employee how we perceive their value, and there’s nothing more personal than that. Make sure you and your execs and manager have the data, training, practices, etc. they need. Though conversations regarding compensation are not always planned, the more you know ahead of time, the better you’ll be able to handle the conversation.
Be direct and also empathetic. Compensation is personal. It can impact whether people are able to move into a larger apartment, go out for date night more often, etc.. That said, you’ve done a third-party study, you’ve done your homework and you don’t need to be apologetic. Be empathetic, but also direct.
Communicate early and often. As mentioned earlier, make sure there’s an active feedback loop so that emotional doors stay open.

Want more tips and tricks for effective compensation communications? Download the ebook Everything You Need to Know About Communicating Compensation today!