Pay Transparency Implementation Strategies: A Tactical Approach
Is your organization actively working to be more transparent about pay—or at least considering it? If not, now is the time to act! Pay transparency implementation strategies are becoming essential as new legislation continues to expand.
As of July 2024, pay transparency (disclosing salary ranges publicly to job candidates) is required by law in several states, counties, and cities. These include:
- California
- Colorado
- Hawaii
- Illinois
- Minnesota
- New York (including New York City, Ithaca, and Westchester County)
- Jersey City
- Vermont
- Washington
- Washington, D.C.
Why Pay Transparency Matters
Moving toward greater transparency requires attention in two areas: tactical details and change management. Our article, You Can’t Ignore Pay Transparency! How To Start Addressing It Now, focuses on change management. Here, we’ll dive into the tactical pay transparency implementation strategies to effectively meet legal requirements and build trust within your organization.
Three Key Steps to Implementing Pay Transparency
Think of the tactical side of pay transparency as getting your “compensation house” in order. Ensure that your salary data is correct, both for public postings and internal communications. Employees may see ranges they’ve never seen before and wonder why their pay isn’t at the top. Strong pay transparency implementation strategies help alleviate confusion and foster clarity.
- Solidify your compensation philosophy.
- Shore up your compensation infrastructure.
- Proactively define your pay transparency policy.
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1. Solidify Your Compensation Philosophy
Work with executive leadership to establish how the company will administer pay. Define where employees should be paid relative to the market, and consider geographic differences, especially for remote workers.
2. Strengthen Your Compensation Infrastructure
- Create a job hierarchy.
- Update job descriptions to reflect responsibilities and qualifications.
- Review job titles and correct any misalignments.
- Manage your job title fraud!
- Create pay ranges that reflect your compensation philosophy.
- Assess current employee pay against the established pay ranges.
3. Define Your Pay Transparency Policy
Decide how transparent you want to be. Will you only meet regulatory requirements, or go beyond that? You could adopt a phased approach. Whatever your decision, communicate it to employees to control the narrative and clarify 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!