Currently, about 1 in 4 workers is covered by some form of U.S. pay transparency legislation. At least 15 states are considering pay transparency laws in 2023. An effective pay transparency strategy requires a focus on 4 principles:
1. Presence – The act of being present requires focus. It is an intentional way of being that is focused on this moment. And then the next moment and then the next. Pay transparency may recognize the past but it doesn’t dwell there. Instead, it is intentionally using this moment to connect, and share pay related information with managers, employees, and other stakeholders with the goal of helping them gain understanding and build trust.
2. People – The people you are communicating with are managers and employees. They will have feelings about the pay decision making process and how it impacts them. And in many cases those feelings will be big. Naming those feelings and being self-aware enough to modify your approach in these conversations will be necessary to achieve the desired outcomes.
3. Processes – Without documented pay processes AND the consistent act of following the processes you will be unable to build trust. Haphazard inconsistent decision making on base salaries and incentives causes employees to distrust the process and the decision makers. And if you want the rewards to drive the desired behavior from employees then being transparent about the process is foundational to success.
4. Performance - The way an employer tells their pay transparency performance story is through facts and figures. They use data to say where they are today and where they want to be in the future. And with a continuous improvement mindset on each touchpoint in the employee lifecycle, an employer’s progress is shown. The challenge is focusing on each touchpoint and uncovering the bias that exists to limit or eliminate its impact.
Pay transparency requirements for employers will continue to increase each year with the intention of closing the pay equity gap.
The companies that step into this and establish the standard for their competition to follow will impact the policy makers.
Do you want to be a leader or a follower?
Attracting and retaining the right talent will help to make your business successful. When talent sees the companies that lead with pay transparency, they will choose to work for those companies.
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