When the temperatures start dropping, those eight-legged creatures start moving indoors. I don’t like them.

I envision them all over my house having babies and partying.

Today a spider was in the shower with me, and I happily washed it down the drain. As I was secretly celebrating, I remembered the story of Charlotte’s Web.

Charlotte, the spider, was so kind to Wilbur, the pig. When he found out he was going to be slaughtered in the winter, she spun words in her web. She was determined to save him and keep him safe.

What do you consider when designing compensation structures that attract and retain talent while also ensuring fairness and equity?

First determine what factors are most important to you as an employer. That list may look something like this.

1.        Alignment to Organization Strategy and Goals: Influences compensation philosophy and incentive metrics

2.        Affordability: Impacts budget for annual salary increases and market/equity adjustments

How do you balance the need to offer competitive compensation packages with budget constraints?

You prioritize and determine where the most value is created. The main justification for an employee’s salary and other rewards is the value they create. 

For example, if you are a SaaS company, then you may spend more on your software engineers and sales team than other roles.

·        Employers may choose to align the total compensation opportunity for these jobs at a higher percentile than the 50th percentile.

Many employees are now expected to be at the office during the workweek instead of having the flexibility to work from home as much as before.

Arguments for returning to the office include things like...employees are more productive and creative in the office. In-person collaboration is easier and more beneficial for team projects and problem solving. Returning to the office can result in a stronger workplace culture.

And yet others think employers have a hidden agenda with the mandatory return to office policies. They think employers want some employees to quit so they don’t have to lay them off.

The higher up in an organization you are the less you know about what is really going on. 

When your direct reports and their teams prepare an update for you, they make sure to portray progress on deliverables and hurdles to success in a way that is sanitized.

Sanitized means made more palatable by the removal of elements that are likely to be unacceptable or controversial. In other words, you aren’t getting the real story about what is going on.

Some senior leaders have skip-level meetings to get an understanding of reality.

When you are developing your compensation communications plan and resources, remember that:

·        The average human attention span is only 8.25 seconds.

·        54% of adults have literacy below the 6th-grade level in the U.S.

This means that your audience needs simple, short, and relevant key messages delivered just in time.

If you are planning a 2-hour compensation training session for managers as you get ready for the annual compensation planning cycle, stop. Rethink how you can deliver the key messages in a shorter more concise format 

Whenever I create a compensation training presentation, I start with sharing the purpose of the total compensation elements base pay, short-term incentives, and long-term incentives.

What is the purpose of base pay?

·        It is to provide security and address the short-term needs of employees.

What is the purpose of short-term incentives?

·        To reward individual employee goal achievement and short-term company success.

Today we have a long list of rewards that employers can provide to their employees. Things like base pay, bonuses, sales commissions, allowances, stipends, long-term incentives, paid time off, health insurance, retirement benefits, life insurance, flexible work schedules, wellness programs, dental and vision insurance, education assistance, medical leave, etc.

The next iteration of employee rewards will be intrinsic motivators.  Autonomy, mastery, and purpose will become more critical to the employer value proposition or EVP.

Some employers are already focusing on this under the heading of workplace culture and leadership development.

·        Autonomy is controlling what we do and how we do it.

Finance and HR should be collaborating on a regular basis on employee compensation programs and budget. 

The largest expense in most organizations is for their employees’ cash compensation, benefits, and other rewards.

HR/Compensation regularly benchmark jobs to salary survey data and update the pay grade structures and incentive targets. Then they analyze employee total compensation to determine what budget may be needed for the next fiscal year.

What’s the difference between a workload increase and significantly changed job responsibilities?

 Answer: The changes to the current job description are critical to HR’s analysis of this difference and so is the conversation they will have with the manager overseeing the work being performed and the employees doing the work. 

 ·        When a job’s responsibilities change, if the change is additional work that is substantially similar in complexity, knowledge, problem solving, accountability, and impact as the current work, then this is a workload increase.  A higher pay grade is not assigned, and a higher base salary range is not warranted.

Too often I see employers try to use compensation to manage employees when they have managers who aren’t good at providing feedback.

An employee is paid low in the base salary range. When the employee asks why they are paid low in the range, the manager doesn’t say it is because you have these two behaviors that need to improve.

·        Examples: “You need to assume less and ask more questions. You need to delegate more to your team members and follow up to ensure that the work is done in a way that meets your expectations.”

·        Instead, the manager says, “Let me talk to HR about that.”

Compensation project success depends on many factors.  But the top three that I think about are quality, time, and money. 

My team is working with an employer to market price about 1,200 jobs within 6 weeks. Crazy, right?!  This is the last week, and everyone is tired of doing this tedious work.

The timeline is tight, and the resources (people and processes) have been deployed. But the quality is going to be mid (aka average or mediocre).

We’ve warned the key stakeholders and those using the market pricing data to develop salary ranges. We couldn’t get more time. We couldn’t get more money/resources.

I talked with someone working in the pest control industry for the last 25 years. He said that the Technicians used to get a low base with commissions that were much higher than they are today.

This led to Technicians thinking of themselves as running a business of their own. The faster the service was delivered and with high quality, the better their commissions. Quality led to repeat customers.

The commission percentage was often around 20% of revenue for a service. But today, that is not the case. They get a much lower commission and a low hourly base rate.  

This has led to less pay for Technicians, and it is not as easy to find qualified candidates today. Once they start the job and realize the true total compensation level, they don’t stay long.

I just finished writing a proposal for a potential new employer client. I like the process of learning about what an employer is trying to accomplish.

Usually, a compensation project is related to attracting and retaining the talent needed to meet the organization’s goals.

It may also include the need to comply with pay transparency and equity related laws .So, a roadmap that takes them from where they are today to where they want to be in 1 – 3 years is a deliverable.

When an employer is preparing for a pay equity analysis, one of the steps is to group comparable jobs.

Pay equity isn’t paying the employees doing the same job the same pay. It is about analyzing the pay of employees doing comparable jobs.

So, “comparable jobs” refer to the positions where the skills and work are similar. You need to identify jobs that have similar responsibilities and value to the employer.

This means that accurate job descriptions are the foundation. The content of jobs within an organization includes:

When an HR leader is considering hiring a compensation consultant to help with their project, they may be asked why they need external help to get this work done.

Here is my answer.

Planning and creating the deliverables for a compensation project like one global job architecture is a big ask. And the implementation of the job/career framework and resources is critical to get right for this to have the expected impact.

There are certain things that internal HR/Compensation employees can focus on like:

Geographical discrimination is the unfair treatment of employees or job candidates based on their geographic location.

This can show up in hiring practices, compensation, promotion opportunities, and access to training or benefits.

You have employees that are dispersed across the U.S. and other countries.  Employers don’t always review their practices to understand if they are discriminating based on geographic location.

Geographical discrimination can occur intentionally or unintentionally when policies/practices disadvantage individuals in certain locations.

I’ve watched company after company announce layoffs. I have read the posts from the employees impacted.

It can be devastating news if you liked your job, manager, coworkers, or employer. It can be happy news if you were ready to leave anyway.

And to those who don’t get laid off, it can be terrible news because you now must do the work of those who are leaving. Unless, of course, you have a manager and company leaders who understand you can’t do the same amount of work with less people.

In today's competitive job market, attracting and retaining top talent has become a key challenge for every organization.

Step 1: Offer competitive salaries and incentives. Offer benefits that meet or exceed the standard provided by other firms.

Step 2: Focus on relationships. Foster a culture of appreciation. Do your employees feel seen and heard? Are they valued and appreciated?

·       Listen in one on one and group settings. 
·       Don’t make assumptions or judge harshly. Ask questions.
·       Demonstrate empathy (it is a skill) and compassion.

Data is the backbone that keeps pay decisions competitive, equitable, and fair.

By data I mean:

1)        The employee, pay, and job data in your HR system is up to date and accurate. I shouldn’t have to say this, but you would be surprised how many employers do not have data they can trust.

2)        The compensation data (think salary surveys) you use to benchmark your jobs is statistically reliable and valid.