Is your organization actively working to be more transparent about pay—or at least thinking about it? If not, now is the time to get to work!
As of July 2024, pay transparency (disclosing salary ranges publicly to job candidates) is required by law in a growing list of states, counties, and cities. Currently, these localities include:
- California
- Colorado
- Hawaii
- Illinois
- Minnesota
- New York (with specific laws in New York City, Ithaca, and Westchester County)
- Jersey City
- Vermont
- Washington
- Washington, D.C.
Moving toward greater transparency requires attention on two fronts: the tactical details and the change management aspect. Our article, You Can’t Ignore Pay Transparency! How To Start Addressing It Now, covers the change management angle; here, we’ll dive into the tactical side of implementing pay transparency.
Tactical Considerations For Increasing Pay Transparency
I like to think of the tactical side of pay transparency as dealing with the details of your “compensation house.” For example, is your salary data correct, both when you post pay ranges publicly and share with employees already within the company? Remember, your employees may be seeing ranges they’ve never seen before and wondering why their pay isn’t at the top.
Here are three key steps to implementing pay transparency well:
- Solidify your compensation philosophy.
- Shore up your compensation infrastructure.
- Proactively define your pay transparency policy.
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1. Solidify your compensation philosophy.
Validate with executive leadership and specify how the company wants to administer pay and where they envision employee’s should be paid relative to the market. Consider geographic differentials for jobs and as it relates to the decisions of a remote workforce.
2. Shore up your compensation infrastructure.
Create a hierarchy of current jobs. Update job descriptions to accurately reflect responsibilities and qualifications. Assess job titles and if you find a misalignment of titles, prepare a strategy to right-size and inform employees to manage expectations. Manage your job title fraud! Create pay ranges that reflect your philosophy and understand the current state of employee pay relative to those ranges.
3. Proactively define your pay transparency policy.
How transparent do you want to be? Does the company only want to comply with regulatory requirements or take a more broad organization approach. Perhaps it’s a phased approach. Whatever the decision, tell employees your story, to control the narrative of your strategic decisions.
To learn in-depth about the tactical side of pay transparency—and get a road map for how to share about pay transparency with your employees in a way that’s compliant—check out my latest video discussion on pay transparency.
Address Pay Transparency The Right Way
MorganHR has some of the best resources available for organizations that want to fully address all the aspects of pay transparency, both tactical and change management. If you’re ready to take steps toward greater pay transparency, take advantage of the two offerings below to set the right course, both in terms of developing a solid pay hierarchy and communicating changes to your people.
Preparing for pay transparency legislation (even if it’s not yet required in your state) is an opportunity for leaders to show their employees that they’re savvy about what’s coming. Even companies that aren’t required by law to share pay transparency data can benefit by gaining the trust of their employees.
To help you parse the data around pay transparency, bring in an expert consultant. At MorganHR, we’ll review your data, interpret it with you, and give you a narrative to help you successfully defend your pay data, align your business incentives, and build trust with your employees.
Once you’ve addressed the tactical side, you need to focus on communicating with your team. Communication and learning is key to getting pay transparency right, yet in most cases it doesn’t get the attention it deserves. In the absence of pay conversations, employees tend to feel like managers determine their pay by throwing darts on a wall, and managers assume people are just thankful to be getting paid. Ultimately, no one is privy to the reasons why the numbers are what they are—which leads to a disengaged workforce, inconsistent compensation practices, and compliance risks.
Avoid that—and be armed with how to have conversations—with our CompAware training program. CompAware creates a learning experience for leaders about how to clearly and effectively discuss pay and performance in a way that inspires and motivates their teams. It helps leaders understand the compensation basics in their organizations that are part of pay transparency, and then how to have engaging conversations—both preparing for tough conversations and capitalizing on positive ones.
These live, interactive 90-minute sessions are delivered virtually or in-person. Training can be delivered to managers, HR Practitioners, or employees. Curious to learn more? Visit our CompAware page.
To learn exactly how MorganHR’s HR and compensation consulting expertise can help you, contact us today!