Back To Compensation Today

How to Cultivate a Strong Pay Brand That Gets You Top Candidates

In the past few years, most HR professionals have become familiar with concept of the employer brand. Your employer brand is, essentially, the face of your company. Your brand is what candidates believe to be true of you as an employer before they get to know anyone at your organization, and it affects your ability to recruit talent. Your employer brand is shaped by what current and former employees say about their experience working at your organization.

A couple of years ago, PayScale took this familiar idea a step further and coined the term “pay brand.” Your pay brand is what employees and candidates believe to be true about your organization’s pay practices. Employees’ beliefs about your pay practices may or may not be aligned with your actual practices. For example, even if your company leads the market in comp and benefits, some employees may still believe they’re underpaid.

In order to develop a strong pay brand, you must be clear about what you pay, how you pay and why you way the way you do. You should be strategic in how you communicate pay decisions with employees. When employees understand how pay decisions are made, they’re more likely to feel confident they are fairly paid, which matters because we’ve learned the way people feel about their pay is closely linked to their level of engagement and satisfaction at work.

Recently, we learned that many organizations struggle to maintain the pay brand they want.

Learn More About Our Compensation Software


How Organizations Evaluate Their Own Pay Brand

In our 2019 Compensation Best Practices Report (CBPR), we asked organizations to self-evaluate their current pay brand (or pay perception) among employees and prospective. Over 1,110 respondents answered this question.

A significant portion of organizations said their pay brand among their employees was good or very good (40 percent). Meanwhile, another equally sized group said their pay brand is neither good nor bad. Data shows many employers have an opportunity to strengthen their pay brand.


We also asked people to describe their organization’s pay brand in their own words. Based on the answers, it’s clear building a great pay brand is a challenge for many organizations.

Those who mentioned their employees are content with their pay were the minority.

Some said that their organization’s pay practices are in line with the market. Others recognized they don’t have a pay brand yet or emphasized a desire to improve pay transparency.

Some respondents talked about the challenges they face when it comes to creating a solid pay brand. One respondent noted their organization has different pay brands in different business units; members of some units feel content with their pay rate and other units feel very behind the market. Another respondent talked about the tension between the comp team and management as the organization enters a phase of rapid growth: “We’re in the middle of a growth time. Management still wants to pay like they are a Mom and Pop and that does not work with the current market and the level of people we need for the future.”

Key Steps to Crafting a Strong Pay Brand

Developing a strong pay brand starts with the understanding that every time you extend an offer, go through the salary increase cycle, give out bonuses or incentive payout, employees are getting a message about what your organization cares about and whether you value them. To change your pay brand, you’ll first need to be clear about the messages you want to send, state your intentions and make sure your actions are aligned with those intentions.

Here are some ways in which you can be more intentional with your rewards practices.

  • Develop a compensation philosophy — a document which outlines your point of view on how you pay and why you pay the way you do. Get clear about what you want to reward through your compensation dollars (e.g. individual performance, skills, achievement of team goals). Then, share your compensation philosophy with employees and job candidates.
  • Review pay for your positions more frequently (e.g. twice a year) and make market-based adjustments instead of cost-of-living adjustments.
  • Reward top performers differently than average and low performers.
  • When you give raises, share with employees the market data you used and highlight their specific contributions so they understand your rationale.
  • Use incentives or bonuses to reward employees for behaviors that align with your company values.
  • Audit your pay practices to identify potential inequities in compensation due to gender or race.
  • Ask your employees what they want to know about your pay processes. This helps you determine what information you should share. 
  • Ask your managers to talk about pay with employees and train managers on how to have effective comp-versations.
  • Provide total compensation statements your employees. These are reports that provide information on the employee’s cash compensation and a monetary value for the benefits and other expenditures the organization makes on behalf of employees. They’re beneficial because they allow you to have more transparent, data-driven conversations about the value of your employees alongside a discussion of the value you provide to them.

Each of these steps matter, and they build upon each other. To learn more about how to implement this plan for your organization, check out our webinar, Crafting Your Employer Brand.

Want to see examples of companies that have made an effort to change their pay brand? Check out our on-demand webinar where we interviewed Kathy Steele, CEO of Red Caffeine about her company’s journey to align their comp strategy to their culture and growth plan.

To get more insights on organizations are crafting their pay brand and managing compensation, check out PayScale’s 2019 CBPR.

Banner photo by Brooke Lark on Unsplash

Leave a Reply

Notify of
Start the Transformation

We can help you bring modern compensation to life in your organization.