I’ve worked closely with various leadership teams and managers, delivering training programs to facilitate navigating pay transparency. It has been incredible to see how pay transparency laws are reshaping workplace compensation conversations. These regulations are not just legalities but catalysts for transforming organizational cultures.
Key takeaways (and realities) from my recent experiences:
There is increased discussion around wages. One of the most noticeable shifts has been the rise in open discussions about wages among employees. Employees now feel empowered to discuss their compensation with anyone openly.
There is greater curiosity around pay in general. There’s a growing desire among employees to understand how their pay is determined.
The above changes have created engagement opportunities. Encouraging open discussions about pay can lead to higher levels of organizational inclusion and development opportunities for employees.
Leaders can only capitalize on those opportunities with proper training. Leaders play a crucial role in fostering trust and transparency through open discussions about compensation. Training and preparation are essential for leaders to navigate these conversations effectively.
While these realities have always existed to some extent, the new laws have given employees “permission” to be curious about their pay and earning potential.
Being proactive and staying ahead of the curve in this area is a competitive advantage!
5 Tips To Make Great Pay Conversations Happen
Tip 1: Get Everyone’s Buy-in For Better Pay Transparency
Embracing pay transparency leads to greater organizational engagement and trust. It’s important to understand both leaders’ and employees’ questions.
Tip 2: Equip Managers With Enough Knowledge To Be Confident
Managers should not be compensation experts but they should be confident discussing pay-related matters. It is crucial to educate them on the organization’s compensation philosophy and how jobs are priced and matched in the market.
I often ask leaders: When you think about pay transparency, what concerns you the most?
- What if my employee is angry that their pay (in reality) does not meet their expectations?
- How do you explain that someone’s pay is fair?
- How do I explain a pay range, and how has the organization developed it?
- How do I know where an employee should be paid in the range?
Tip 3: Be Prepared—But Don’t Try To Have All The Answers
Leaders should be prepared for conversations about compensation and allocate ample time to avoid rushed discussions. Be okay with asking more questions than telling employees what you assume they want to hear. It’s fine if you don’t have all the answers immediately, but always make a plan to follow up.
Regardless of industry, managers often find themselves grappling with common questions such as:
- “Why am I paid less than the new hire?”
- “Why does my coworker earn more than me?”
- “What’s the salary range for my position, and how was it determined?”
- “How does our company ensure our pay remains competitive?”
- “I’ve seen my job listed for higher pay online. How do I get that pay?”
Tip 4: Create a Human Learning Experience for Leaders
When adults socially interact and get feedback and input from each other, they are motivated to learn and practice new skills. Participating in debates and role-plays and analyzing case studies are key ways to practice and prepare for healthy conversations.
“Gaining clarity about where the lines and standards are and then using role-playing to practice talking around them was the most valuable part of the [training] session!” —Senior-level Manager
Tip 5: Make Pay Transparency An Integral Part Of Your Organizational Culture
It is a strategic advantage for attracting and retaining talent. Educating employees, HR, and leaders about total rewards and pay philosophy should be an ongoing part of the employee experience.
Pay transparency laws are transforming how we approach conversations about compensation.
Embracing openness, preparedness, and transparency can lead to a more engaged and trusting workforce. Remember, pay transparency is not just about posting salary ranges. It is a strategic advantage for attracting and retaining employees. Done right, companies will have a competitive advantage!
If you need support navigating pay transparency or would like to enhance your organization’s approach to compensation, consider exploring our learning opportunities through MorganHR’s CompAware program. Better yet, reach out to me directly! Together, we can build compensation awareness at every level of your organization!
