Just as communication is critical to a happy marriage in personal relationships, having honest, frequent and pointed conversations about pay is similarly key to a successful employer-employee relationship.After finishing a summer job while in college, the words, “If I had only understood …” rattled in my head, particularly as it related to how my pay worked. The job was with a small billing company and the hiring process was very informal and fast. Of course, I was also excited, so I probably didn’t hear or remember every detail my manager told me during the interview process (e.g., what overtime is, or how my bonus check works). The summer went by quickly and it was a good experience, but I didn’t go back and say, “Yes to the job” the next year.
Turns out, many people new to the workforce or new to a company (or even seasoned employees) are in a state of confusion when it comes to the underlying basics of how pay or pay-for-performance works, and/or don’t have overwhelmingly positive views on the subject.
Here are some stats from the employees’ perspective (that may ring true for your organization) from the 2016 Global Talent Management and Rewards and Global Workforce Studies (cut of US employers with 500 to 5,000 employees) by Willis Towers Watson:
- Base pay is the top driver of both attraction and retention in employees’ minds, globally
- Only three out of five employees (64%) indicate that they understand how base pay is determined
- Barely more than half (53%) understand how their bonus is determined
- Less than half (44%) say there is a clear link between their performance and their pay
- Half (54%) think they are paid fairly, but one in five disagrees
We don’t need Monte’s or Randy’s knack for pointing out the obvious (albeit on a hit television show about wedding dresses) to know that a lack of understanding the basics is always a challenge in communication. In the HR world, that means employers need to remember:
- Base pay and other pay programs are a huge consideration for people when they think about joining an organization, or staying with one.
- For most employees, base pay alone remains the largest slice of the total rewards pie and is critical to meeting their fundamental financial needs.
Here are four things you can do to ensure an enthusiastic, “Yes to the job” and happy employer-employee marriage:
- Build awareness within your organization about the importance of effective leadership. Train and hold recruiters, hiring managers and leaders accountable for articulating and delivering the employee value proposition and driving high levels of employee engagement from the start.
- Start educating early in the recruiting process. Provide clear explanations of the basics of pay and pay for performance to ensure a solid foundation for understanding company-specific details at the appropriate time. Use videos or simple online or paper handouts.
- Use social media for brand building. Go beyond posting jobs on sites such as LinkedIn and post other content that raises the visibility of your culture and employee experience among candidates.
- Be transparent, reinforce and personalize conversations about pay and performance. Begin during onboarding and continue throughout each year, as part of building trusted employer-employee relationships and ensuring a great employee experience. (Here’s a great read on Personalization Creating Engagement from HR Bartender.)
Here’s to your job shoppers saying, “Yes to the job!” and creating a long and happy employer-employee marriage. WHAT ARE SOME OF THE WAYS YOU OR YOUR COMPANY GET TO THE ALTAR? Share below and don't forget to check the little box so you can see what others are saying too!