PayScale: The Pay Transparency Challenge webinar
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Pay Transparency is one of the hottest topics in human resources right now. But what exactly does pay transparency mean? Join Mykkah Herner, MA, CCP and Paige Hanley, CCP as they discuss pay transparency as a way of increasing trust within your organization to drive engagement, productivity, and business results.
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PayScale: The Pay Transparency Challenge webinar
- 1. The Pay Transparency Challenge Deciding Where to Fall on the Salary Transparency Spectrum Mykkah Herner, MA, CCP Director of Professional Services Paige Hanley, CCP Sr. Compensation Professional
- 2. www.payscale.com 14,000 Positions 3000 Customers 11 Countries 250 Compensable Factors 41 Million Salary Profiles
- 3. www.payscale.com Agenda • Pay Transparency Matters • Defining Transparency • The Transparency Spectrum • Moving to Greater Transparency • Immediate Actions www.payscale.com
- 5. Pay Transparency Trust Better Business Outcomes! Engagement Why Would Anybody be More Transparent about Pay? www.payscale.com
- 6. Employees who perceive a ‘fair and transparent pay practice’ have lower intent to leave and higher satisfaction PERCENT OF RESPONSES LOW AVERAGE HIGH 50% 31% 19% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 1 2 3 4&5 % Responses with Intent to Leave % Responses with High Satsifaction www.payscale.com
- 10. … whether they want to or not • CEO to worker ratios • 990s • Say on Pay www.payscale.com
- 12. What are we being transparent about? • Pay Philosophy • Pay Strategy • Pay Practices • Market Studies • Pay Rates www.payscale.com
- 14. • Defining the competition • Aiming to meet or exceed the competitions • Deciding what matters • Acknowledging various segments Pay Strategy www.payscale.com
- 15. • We have a plan • Jobs have grade assignments • Range minimums / Range maximums • Increase process / cycle • Budget process / cycle Pay Practices www.payscale.com
- 20. 1. Only own pay
- 21. 2. Manager & Employee Talk About Pay • Philosophy shared with managers • High level strategy shared with managers • “We have a plan” shared with managers • Manager & Employee discuss EE pay
- 22. 3. Company Pay Philosophy • Philosophy shared with employees • Strategy shared with managers • “We have a plan” shared with Ees; ranges shared with Ees & Mgrs • We do a market study • Manager & Employee discuss EE pay
- 23. 4. Market Study and Comp Processes known • Philosophy explained to employees • High level strategy shared with Ees; full strategy shared with mgrs • Mgrs know all ranges to their level; EEs know ranges in their path and how to advance • Market study provider known; EE to mkt results known by EE • Manager & Employee discuss EE pay
- 24. 5. Managers Trained to Talk Pay • Philosophy explained to employees • High level strategy shared with Ees; full strategy shared with mgrs • Mgrs know all ranges to their level; EEs know ranges in their path and how to advance • Co-wide results known; EE to mkt results known by EE • Manager & Employee discuss EE pay well
- 25. 6. Published Ranges & Grades • Philosophy explained to employees • Full strategy shared with EEs • All ranges shared with Ees; budget & increase process / cycle known • Dept-wide results known • Manager & Employee discuss EE pay well
- 26. 7. Everybody Knows Your Salary • Philosophy explained to employees • Full strategy shared with EEs • All ranges shared with Ees; budget & increase process / cycle known • EE to market results shared • EVERYBODY KNOWS EVERYBODY’S PAY
- 28. • Explain what transparency is (and isn’t) • Link transparency with results that matter Gain executive support www.payscale.com
- 29. • Provide information about the business, rationale for increasing communication, and tools for success • Expect more to get more • No really, train them on communication Train managers www.payscale.com
- 30. • What’s the make-up of your workforce? • Are they ready for more transparency? • Do they want it? Assess Workforce www.payscale.com
- 31. D ecider A ccountable R esponsible C onsulted I nformed Get clear about roles www.payscale.com
- 32. Develop a plan www.payscale.com Employees know × Their pay × The starting rate for their job × Their range cap Employees know Their pay Grade & range Comp Philosophy & basis for increases Average increase across the org / dept / level Third Party Study Requires: • Executive support and buy-in for comp plan • Increased manager savvy
- 34. Immediate Actions Assess your workforce Educate yourself further about transparency Notice what you already do in your org Think about what “pushing the envelope” means to you Begin talking with your executives www.payscale.com
- 35. PayScale Delivers Where Other Compensation Providers Fall Short PayScale leads the world in compensation knowledge with the freshest and most detailed data from over 40 million salary profiles. More than 3000 organizations use PayScale’s software and intelligence to get the greatest return on their talent. Smart businesses use PayScale Insight to recruit, retain and motivate their people. Visit our blog: www.payscale.com/compensation-today Join our Group on LinkedIn: Compensation Today: HR Best Practices Mykkah Herner, MA, CCP Director of Professional Services Paige Hanley, CCP Sr. Compensation Professional www.payscale.com
Editor's Notes
- Hedge Manage polls Type all the stuffs in “create” Then it’ll be there when you want it… Launch Show/Share Hide Quiz for the end: What are your biggest challenges in developing a pay structure? We lack a compensation philosophy or strategy We lack market data for our jobs I’m still unclear about the purpose of a structure I need help building a pay structure Something else
- Hedge Creator of the largest database of individual compensation profiles in the world, PayScale, Inc. provides an immediate and precise snapshot of current market salaries to employees and employers through its online tools and software. PayScale’s products are powered by innovative search and query algorithms that dynamically acquire, analyze and aggregate compensation information for millions of individuals in real time. Publisher of the quarterly PayScale IndexTM, PayScale's subscription software products for employers include PayScale MarketRateTM and PayScale InsightTM. Among PayScale's 2,500 corporate customers are organizations small and large across industries including Mozilla, Tully’s Coffee, Clemson University and the United States Postal Service.
- Why does pay transparency matter - Mykkah Defining pay transparency - Paige The Transparency Spectrum - Mykkah Moving to greater transparency - Paige Immediate Actions - Mykkah
- Do you need transparency to get everyone in the same boat, paddling in the same direction? What’s the right level of transparency for your organization/?
- Transparency is a means to an end – We do transparency to build trust - building trust increases both engagement and through that productivity/performance - performance drives business results and outcomes
- Transparency is a means to an end – We do transparency to build trust - building trust increases both engagement and through that productivity/performance - performance drives business results and outcomes
- Consider workforce make-up including: Generation Life stage etc
- Source: http://www.pewresearch.org/fact-tank/2015/05/11/millennials-surpass-gen-xers-as-the-largest-generation-in-u-s-labor-force/ Millennials prefer transparency of pay practice A nod to Gen Z – we already know they like more privacy (Move from things like facebook to things like snapchat or Instagram) than millennials – it’s the pendulum swinging back towards the center. But – your WF is likely NOT mainly Gen Z, and won’t be for some years.
- http://techcrunch.com/2015/05/24/lockstep-salaries/ http://www.pbs.org/newshour/rundown/reddit-ceo-ellen-pao-bans-salary-negotiations/
- New laws on the books making it illegal to take action against employees who talk about their pay.
- Paige So now that we know why transparency matters, let’s dig a little deeper into what we actually mean when we say transparent.
- It’s easy to think that transparency means every one knows everyone’s pay but really there are a variety of compensation related items that you can choose to be transparent about with your workforce such as your: Pay Philosophy Pay Strategy Pay Practices Market Studies Pay Rates Within each of these areas there multiple levels of transparency as well so let’s look at them in a little more detail.
- Pay Philosophy should ripple out through the organization. Intention (not goal) – how are you going to put the branch in the water to create the ripples? Actions fulfill intentions – put your money where your mouth is We intend to meet the market We aim to provide fair pay We reward performance (vs tenure, or something else)
- Your Pay Strategy is composed of a number of different things that you can choose to share: Who are you competing with for talent? If your philosophy is “we intend to meet the market” How is our market defined? We compete with SF tech companies? We compete with large SF tech companies? Are you rewarding performance, tenure, special skills or certifications? Is that something you would share with your workforce? I’ve worked with a number of clients who may be on the small side themselves but when it comes to pay they’re choosing to target larger markets. I always think that’s such a great message to share. If you’re doing something great like that why not tell your employees? “Hey we know we’re a 100 person company right now but we’re choosing to pay you as if we were a 1,000 person company.” What a great message!
- Plan in place Grade Assignments Range minimums Range maximums Policies for advancement or movement through range Increase process / cycle Budget process / cycle
- - We did a study? - Who did we do the study with? - Summary results - detailed results - results of the market study for your job - results of the market study for you
- Ee knows pay Manager knows ee pay Ee knows where their pay compares to team/dept/org Everyone knows everyone’s pay
- Managers may not / don’t know EE pay.
- “Extreme transparency” Transparency of pay rates – the Buffer example - lots of noise - think about a cupboard with no doors – have to be extremely tidy
- Paige So you decide you want to be more transparent or maybe just dip your toe in the water and see what one step towards being more transparent would look like. How do you do that?
- First thing you’ll want to do is gain your exec’s support. Like any time you’re communicating with your exec team, you’ll want to give them a short and concise explanation of what transparency is, why it matters, and then most importantly link it to some sort of results or business goals that matter to them. If you explain how higher transparency is linked to a lower intent to leave but they feel retention isn’t an issue at your workplace, then they may not be interested in what you have to say. If however they are concerned about employee engagement, use that to explain how moving towards transparency can help them succeed.
- Once you have support from your exec team, you’ll want to train your managers. It’s hard as a manager to buy-into something if you don’t understand the rationale behind it. The more you do understand, the easier it is to get behind it and really become a champion for that cause. We work with so many people who say “oh our managers can’t do that or won’t be able to handle that”. Don’t sell them short, expect more of them and then give them the resources. Part of those resources are the traiing. We think of communication that is automatic or a given but there are parts of communication that are so automatic that we don’t even realize we’re doing them and they can be detrimental. Good communication is a skill just like anything else you. You can train on it and get better at it with practice and help.
- Who do you have in your workforce, do they even want transparency? What kind of transparency do they want? Maybe you don’t have that many milenials yet. Maybe you have some more traditional functions who are happy to just be head down and working. Or maybe on the other hand you’ll have people who will be distracted by not knowing and it will be productive to share more. You’ll only know by knowing who’s in your organization.
- Knowing the roles in your org will help you understand how transparent you are now and how transparent you want to be. For any project, task, or major initiative you’ll want to know who fits into each of these: D – who ultimately gets to say yes or no A – who is actually accountable for making the thing happen once it’s decided on R – who is responsible for the work C – who provides input along the way I – who are we letting know and when
- Once you’ve decided where you are and where you want to go, develop a plan to figure out how to get you there. For example (read through slide)
- think about a cupboard with no doors – have to be extremely tidy In a working kitchen, things aren’t always pretty, but they’re always functional Is your company ready for that? We’ll talk about getting you more transparent, if not there yet. Sometimes doors (or at least curtains) serve a purpose
- Okay we’re going to open up a poll now on what your biggest challenges are when developing a pay structure. Please vote and then we’ll post the results in just a couple of minutes. Mute ourselves – post poll – share results Answer questions.