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How PayScale Products Help Organizations Bring Pay Forward

At this point, we’re seeing some pretty big shifts in how organizations approach compensation. In this post, we’ll take a look at these trends, show you how they inform our product strategy, and highlight a few recent product enhancements that support the transformation of comp.

In our latest Compensation Best Practices Report (CBPR), we surveyed over 7,100 organizations to see how they make decisions about compensation and identified three sets of behaviors that set top performers apart from the rest. In this study, top performers are defined as the organizations who met or exceeded their 2017 revenue goals and are the number one player in their industry.    

1. Have a compensation strategy that reinforces the culture you want to create

In the old days, compensation was an afterthought. Today, top performing organizations recognize that the way they pay, including how much and why, says a lot about them and matters to their potential and current employees.

They have a compensation philosophy — point of view on what they want to reward within their organization — and they’re intentional about how they spend their dollars. Additionally, these orgs tap into multiple sources of data to keep a pulse on the market, use variable pay to motivate performance, and tend to be more transparent with their employees about their pay process.  

2. Treat compensation as an on-going practice, not as one-off events

Compensation was historically treated as annual events, and employees received pay increases commensurate with inflation or cost of living adjustments (COLA). Today, leading organizations have started to treat compensation as an ongoing dialogue with employees, rather than one-off events. In the CBPR, we found that top-performing organizations think about comp more frequently:

  • 56% of top-performing orgs have complete a market study within the past year
  • They’re more likely to give bonuses or incentives at least quarterly
  • They’re more likely to check market data for individual jobs on a monthly basis

These organizations know not to take talent for granted, and have made it their priority to show employees that well-reasoned rationale went into their compensation. They’re also more likely to adjust their comp strategy as a result of employee feedback.  

3. Empower Managers to Be The Arbiters of Pay Decisions and Effective Communicators  

Historically, HR or compensation departments made pay decisions and delegated managers to the messenger role. This has led to unfortunate scenarios where managers throw HR under the bus: “I wanted to give you a raise, but HR won’t let me.”  

When managers don’t understand how pay decisions are made, or can’t communicate it well to employees, trust is undermined, and employees are likely to believe that you don’t pay well or fairly.

Today, organizations are collaborating with managers at the beginning, and throughout the pay process. In the CBPR, we found that top performing organizations are more likely to say that:  

  • Their managers have a say on pay for their direct reports
  • Their managers understand the pay increases approved for their direct reports and can explain the rationale behind increases
  • Their managers believe their direct reports are paid fairly.
  • They train managers on how to have pay conversations with employees

In short, organizations who are transforming the way they make pay decisions are reaping the benefits in terms of greater employee engagement, organizational alignment and higher levels of performance.

How PayScale Products Support the Transformation 

Our products are built to help organizations transform their compensation strategy and processes. We believe that:

  1. The compensation process should be much less painful and time-consuming than it is today, so that HR can get out of spreadsheets and have the time to do the strategic work.   
  1. Organizations should be able to tap into multiple data sources to make accurate pay decisions and have the insights they need to get ahead of comp issues.
  1. The comp process needs to shift from one-off, annual events into an ongoing dialogue with employees. Organizations need to be able to make pay decisions at the speed of their business.  
  1. Managers should be involved in making pay decisions, as they are in the best place to motivate employee performance. Software should foster seamless collaboration between HR and line of business leaders.     

Insight Lab – The One Stop Shop For All Your Compensation Needs

Insight Lab
Insight Lab is a compensation platform we’re just releasing to the market. It helps organizations to build and manage compensation plans in an intuitive software, while presenting decision-ready insights to save time and make business impact.

In Insight Lab, you can use PayScale’s crowdsourced data, company-sourced data as well as any other survey data you want to define the right dataset for any job (see all of our data offerings).

Key features our customers take advantage of include:  

  • Ability to use any data to price jobs, blend multiple sources together. When you purchase the platform, you automatically get two data sources — PayScale’s Crowd-sourced Data and Company-sourced data.  
  • Benchmark jobs in minutes instead of hours or weeks
  • Build a visual, dynamic merit matrix to facilitate and simplify the salary increase process  
  • Full salary structure creation and modeling
  • See which jobs are hot, to keep a pulse on market movement
  • Data management tools to manage surveys and streamline survey participation
  • Robust analytic tools with upfront insights and configurable reporting
  • Support from our professional customer success team.
  • Integration with PayScale’s Team product to streamline the increase cycle and empower managers to make pay decisions.

Collaborate with Managers to Get Feedback on Jobs Faster

PayScale’s new Job Collaboration feature is designed to help HR get managers to invest in the pay process. Managers can use this tool to provide feedback on the core factors that impact pay back to HR in a central location. When managers and HR are on the same page about the content of a job, they can discuss and reach agreement on what the job is worth to the organization and what’s fair to pay employees.

Insight Lab job feedback 

One of our customers, Jasin Nazim, Senior Compensation Analyst at Patagonia, described the value he sees:

“PayScale allowed me to eliminate time consuming meetings with managers to set pay ranges and, instead… discuss what really matters: paying employees fairly and competitively. Job Collaboration readily surfaces all the information I need to share with managers, allows me to easily send the job for review and automatically stores the manager’s feedback directly in Insight Lab.”

Matt Dwyer, the Director of Materials Innovation at Patagonia, said that Job Collaboration has helped him have more honest discussions about pay with employees:

“As a manager, I want to take care of the people that are truly excellent and have fair and honest discussions. PayScale’s Job Collaboration feature provides me the facts I need to have those vital conversations.”

PayScale Helix

Lastly and behind the scenes, we have developed a unique proprietary data engine. PayScale Helix applies modern data science to the increasingly large data sets used for benchmarking compensation, interpreting job skills and requirements and predicting pay for positions across geographies. Helix blends advanced data modeling, machine learning and innovative matching and prediction algorithms to power faster, more accurate decisions on pay.

Want to Learn More?

Join our upcoming webinar on April 11th with our Sr. Director of Product – Alex Armstrong – for a live demo and Q&A on how PayScale products support a modern compensation strategy.


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