In HR circles these days, “employer brand” and “employee experience” have become buzz-worthy topics. And for good reason.
Organizations that can succeed in today’s tumultuous business environment are the ones who can attract the best people. And when we talk about talent, we’re really talking about creative people. To help our organizations navigate the chaotic markets we operate in, we need workers who can turn product vision into lines of code, design new user experiences, uncover non-obvious truths to help us tap into new markets, and come up with stories that connect to the hearts and minds of our customers.
Basically, organizations need people who excel at creative work and are inspired to work for their particular firm. How do you get such people to join your organization at a time when top talent have more options than ever before?
You’ll have to offer them more than the trappings of traditional J-O-Bs. It won’t be enough to provide them with a high salary, enjoyable workspaces, fun perks and friendly colleagues. While all of those things do help, you’ll also have to convince them that your organization can provide them with the opportunities and experiences that fit with who they are. At the end of the day, they want to know that your values are aligned with their personal values and your organization can help them achieve their personal goals.
In today’s market, potential employees have more information than ever on your organization’s employee experience. This includes online salary information and reviews that supplement any official messaging you send them. As you’re evaluating a candidate for their fit and potential, they’re also collecting information about you to form a picture of the experience they will have at your organization. It is their perception of their employee experience that will determine whether they choose to join you or work for someone else.
What is your employer brand today? Do your candidates and employees feel that your organization has something unique to offer? When you focus on the ongoing experience your employees have with your organization, it does so much more to help your organization attract and retain the right employee than any one-time decisions.
So, are there particular aspects of your employee experience that are less than desirable?
In our experience working with HR organizations, we’ve found that there are two areas of practices that often unintentionally tarnish the employee experience: compensation and performance management. Being intentional about your pay and performance practices and consistently communicating to your employees can help improve the overall employee experience.
1. Make Sure Performance Evaluation Is Fair to employees
One of the most challenging practices for organizations to get right is performance management. Have you clearly defined what your organization expects from each employee? Do your employees truly understand your expectations? Are your compensation practices aligned with the results you care about? Do your employees feel like the rules of your system and the execution are both fair?
Hidden Bias In Performance Assessments
Over the past 15 years, psychologists have done extensive research on how people act in situations where they have to evaluate/rate people and situations. A report referenced in Harvard Business Review shows that on average, 61 percent of a manager’s rating of an employee is a reflection of the manager’s experiences and attitudes instead of an accurate assessment of the employee’s actual performance.
Unfortunately, a manager’s rating is often the main metric for assessing performance, especially when performance evaluation drives compensation. If you aren’t taking steps to reduce inherent bias in your performance assessments, you run the risk of developing unfair and possibly discriminatory compensation differences in your organization.
For example, let’s say that your current twenty-question performance evaluation includes several statements where you rate employees on how strongly you disagree or agree. This assessment includes the statements “employee is driven to accomplish goals” and “employee behaves collaboratively to accomplish objectives.”
One manager may have internalized that men are more driven than women, while another’s bias is that women are more collaborative than men. This automatic reaction could tip the scale from “strongly agree” to “agree” on these questions, and change the overall results of the performance evaluation. Research has also shown that language on job ads can deter applicants of a certain gender from applying, which deepens and prolongs patterns of inequity.
You can’t remove bias from the human brain. But when you recognize its impact, you can structure your performance assessments in a way that reduces bias and improves accuracy. Instead of asking managers to perceive something about their subordinates, focus on questions that deal directly with the manager’s experience. Here are some examples:
- If [employee] left company, what would I do?
- What are some things [employee] does well? Cite specific examples to demonstrate these traits.
- In which ways can [employee] improve?
These questions focus on the manager’s experiences with the employee, instead of asking the manager to define abstract terms and apply them to the employee through the lens of their biases.
It is also essential to make time for frequent feedback sessions between managers and employees to identify and correct performance issues. This should include in-the-moment praise and corrections, as well as regular one-on-one meetings for in-depth conversations. Capturing this performance data in the moment helps keep biases from tinting managers’ memories.
2. Develop and Promote Your Pay Brand
It may be time to pay more attention to your pay communication. Although you might have a well-considered compensation plan in place, your employees may not think so. PayScale’s research has shown over and over again that most people think they’re underpaid, and very few people are satisfied with the salary they receive. In other words, most companies aren’t leveraging the money they’re already spending on payroll.
Here are some simple steps to make sure you aren’t failing to cross the finish line because of a communication breakdown.
Develop a compensation strategy that reinforces your organization’s values, culture and mission.
Communicate Your Strategy to Your Employees
Employees want to know how pay decisions are made and that the methodology used to make the decisions is a sound one. So, you may want to develop a communication that answers the following questions:
- What is the organization’s strategy and how does it affect me?
- Why am I being paid more or less than other typical employees in the same role?
- How competitive is your pay relative to the market?
- How much does my pay have to do with the market versus my performance?
- How can I grow more and earn more within the company?
Additionally, you may want to share market data and individual compensation reports with employees demonstrating why they receive the salary they do. Empower managers to talk about pay with employees, and ensure that managers understand your compensation strategy and the pay philosophy your leadership team has established.
Proactively Address Pay Inequity
It’s important that workers feel fairly paid in relation to others in similar roles (or with similar work experiences). Plan regular audits for your pay practices to catch any discrepancies. Look at your workforce, segment by segment (by department, by role, by location) to see if there’s disparity in pay between your male and female workers and across ethnicities.
Make sure that there are no inequity trends. To uncover gender bias in compensation, you can calculate the compa-ratio for men and women and see how they compare. A lower compa-ratio for women indicates that pay decisions are not being made equitably.
Once you’ve audited your pay practices, you’ll want to share this data with employees. By sharing pay data with employees and committing to addressing pay inequity, your workers will be more satisfied. Having a reputation of paying fairly and committing to equality is a positive for your diversity recruiting efforts. PayScale’s Compensation Best Practices Report found that in 2018, 28 percent of organizations are planning to conduct a racial and/or gender pay equity analysis. 57 percent of organizations aim to be transparent with their employees about their compensation strategy and pay ranges.
For more information about the relationship between performance, pay and employee experience, download our new ebook A 360 Degree Guide To Employer Brand. This ebook was developed collaboratively with our partner BambooHR.
TELL US WHAT YOU THINK
Do your organization’s people practices align with the employee experience you’re aiming for? How so? If you’ve had notable success with any experiences or resources in particular, we’d love for you to share them with us below.
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