Communicating to employees and people managers about their pay can seem daunting initially.

There are so many compensation-related programs and processes that need to be considered. See the image with this post.

Consider this framework as you plan your communications for the year:

Most of the U.S. merit budgets for 2024 are from 3% – 4%. 

In Q1, many HR and Compensation leaders are training people managers on how best to spend the merit budget on employees based on their performance.

There are several approaches to consider when spending the merit budget:

“So many people need a hug, a forehead kiss, and a grilled cheese cut diagonal.” –Author Unknown

The holidays may be a time of celebration, or you may want to just survive the holidays this year.

Whatever your situation, I hope you get what you need.

There are several ways we feel valued at work.

·        We are given work to do that is challenging and helps us to grow.

·        Our manager tells us that our work on Project ABC was excellent.

·        We received a larger base pay increase than we expected.

I have a coaching client that is negotiating her promotional pay increase. 

The new job she is being promoted to was posted for internal and external candidates with a base salary range of $110,000 - $130,000. 

She was offered $90,000.

Now, it is not illegal for the employer in Colorado to pay outside of the base salary range that was posted.  But the posted range needs to be the employer’s good faith and reasonable estimate of the range of possible compensation at the time of the posting.

There are employers who have a limit to the percentage increase they provide to employees who are promoted. The most common one that I find at employers is 10%.

Why?

If Barb needs a 16.7% increase to be paid competitively and equitably in the new job’s base salary range, why wouldn’t you give her that pay increase?

Scenario #1:

John is going to be out of the office for six weeks because he is getting a hip replaced.  One of his direct reports, Larry, has been selected to be the “acting manager” while John is out of the office recovering. 

John doesn’t talk to HR. He tells Larry that the opportunity to be the “acting manager” is a way for him to demonstrate his ability to oversee the department and gain managerial skills and experience.  This will help Larry’s career development in the long-term and he’ll be more visible to the senior leadership team. No additional compensation is offered.

When you review pay to determine if inequities exist, I recommend that you focus on more than base pay. You should also look at bonuses and sales commissions as well as long-term incentives.  And then expand to look at overtime, spot awards, and special programs like high potential stock grants, retention awards, and project milestone payments.

A workplace equity analysis includes not just the pay elements but also the full employee lifecycle. That includes recruiting, hiring, development, total rewards, retention, and attrition.

The pay gap is not just caused by unfair pay decisions. It is also caused by not providing opportunities to your employees in an equitable manner.

Imagine reviewing a spreadsheet of bonus and sales commission calculations.

You see different bonus targets for employees with the same job title. And you are assuming that is because the employer had different pay offerings based on the funding stage they were in.

You see in the sales commission tab of the spreadsheet that the targets vary by employee and there is no consistency. You’ve looked at the data by job title, work location, hire date, and supervisor.  Then you start looking at it by race and gender. 

In the U.S., state laws determine how often employers should pay employees.  It varies by state. (Of course, it does.) The only states without a pay frequency law are Alabama and Florida.

Each state law has the minimum frequency for paying employees. Employers can choose to pay more often than the requirement.

Each time an employee receives a paycheck, they are reminded why they are working. To pay their bills and to hopefully save some money for the future and emergencies.

There are a lot of pay transparency laws employers are trying to comply with in the U.S. and globally. 

·        Here in the U.S., we have compliance requirements in California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island, and Washington.

·        States considering pay transparency include Alaska, District of Columbia, Kentucky, Maine, Massachusetts, Michigan, Missouri, Montana, New Jersey, Oregon, South Dakata, Vermont, Virginia, and West Virginia.

What does it mean to leave a legacy?

A legacy is the positive impact your life has on other people. Those people can be friends, colleagues, family, or strangers. Your legacy is the sum of the personal values, accomplishments, and actions that resonate with the people around you.

Having a purpose that is bigger than yourself is amazing.  Some of us can define that purpose. Others are searching and reflecting on what that is and can’t yet define it confidently.

When you review salary survey data to find a match to an employer’s job description, sometimes you just can’t find the right match.

The salary survey job will have a higher or lower scope than the employer’s job. So, you make the decision to use a premium (plus X%) or a discount (minus X%).

The adjustment could be because of the scope of responsibilities or a niche/hot skill.

Whether you evaluate a job using the Competitive Market Pricing Method or Point Factor Method, you may hear this when you share your pay grade recommendation, and it doesn’t meet the business leader’s expectations.

·        “Yes, well that pay level is lower than I expected. What do I need to add to the job description to make this a grade 11?”

·        “We need to pay $125,000 to $150,000.  Can you find a salary survey match that gets us to that total compensation level?”

Being a consultant and business owner is different from being an employee. 

As an employee, I sat in meetings  most of the day and did work between meetings or late at night after my shift as mom, tutor, cook, and bedtime storyteller. There was a tremendous amount of busy work or activity that I now think of as non-essential.

As a consultant you need to find the quickest most accurate path to the outcome the client paid for.

The interviewing process is imperfect.

Hiring managers and HR are on their best behavior. They are selling candidates on the job’s responsibilities, the people they will get to work with and for, the company culture, and the vision/mission of the executives.

Candidates are promoting themselves and aligning their interview question answers to what the employer wants to hear. They are anticipating how to best present their capabilities and experience.

Many years ago, I worked with a man who would randomly find a word in a dictionary, read the definition, and then use it in a sentence at least once a day.

His vocabulary was amazing. Because I sat next to him in cubicle land, I learned a lot of new words and their definitions too.

So, while I normally post about things related to compensation, HR, and leadership I thought I’d share a new phrase I learned this week. 

There are many decision points in an employee’s time working for an employer. 

The point in time when they are hired is obviously the first. And, of course, getting an employee’s starting base pay right is essential to solving the pay equity gap.

Then their pay, performance, and potential will be reviewed annually. That means that employers have three times a year they can move toward equity.

Many of you are thinking about asking your manager for a pay raise. Here are the steps to use when planning that conversation.

1.      Research and know your worth. Go to ProsperConsultingLLC.com > Resources > Free Pay Data.  Also summarize pay data you are seeing on job postings.

2.      Write your SOAR stories. Situation – Obstacles – Actions – Results

If you don’t deliver a total rewards statement to your employees, you are missing out on communicating the full value of what they are receiving.

Our brains haven’t evolved to keep up with the amount of information we have available to consume.  And it is difficult to determine in the moment what is important and what is not. 

What you pay your employees and the benefits you provide are important for employees to understand.