Compensation isn’t just numbers—it’s a story of value, priorities, and success. Employees ask, “What’s in it for me?” Employers should frame it as, “What’s in it for us?”—aligning business goals with employee motivation.

The Balancing Act: Business Needs vs. Employee Expectations

Designing pay programs means attracting and retaining talent while staying financially responsible. HR leaders must ask:

Executives are tasked with making complex decisions that impact the entire organization. The weight of these choices can lead to endless debates, analysis paralysis, and a cycle known as pushing the rock around the tree. While considering context and alternatives is critical, at some point, you must make the call and move forward—because there is no perfect decision.

The Cost of Indecision

Imagine your leadership team is designing a new bonus plan. You’ve identified the need: the current incentive design isn’t driving the right behaviors, and employees are disengaged.

Many employers build intricate compensation structures to attract and retain talent. But when these systems become too complex, they lead to confusion, frustration, and disengagement.

The Hidden Costs of Complexity

Over-engineered compensation programs often create unintended consequences:

·        Lack of Transparency: If employees don’t understand their pay, they assume the worst.

Here is an example of internal equity: “Employees with similar jobs, performance, skill sets, and experience within a company are paid similarly. This includes salary, benefits, and other forms of rewards.”

Let’s look at that definition in more detail.

$ “Employees with similar jobs,...

Similar jobs can be further defined as (a) same job title, (b) same job family and career level, and/or (c) same job family and pay grade.  Of course, an employer’s job architecture may provide other ways to create comparator groups.

It isn't fun, and most managers hate having to write a job description.

If they have a job opening and HR asks for the job description to use in the posting, the hiring manager typically asks for an old job description to start with and then they edit it.

The problem is that the hiring manager doesn't really spend much time editing it. And then the job description doesn't tell the truth about the job responsibilities and necessary qualifications.

"Treat others as you want to be treated" means to behave towards others in the same way you would like them to behave towards you. You put yourself in their shoes and act with kindness and respect because that is what you would want to receive from them. This is called the "Golden Rule" and is a fundamental principle of ethical conduct across many cultures.

It requires empathy and self-awareness.  This rule encourages you to consider how your actions might affect others and to act with compassion.

By treating others well, you are more likely to experience positive interactions in return.  Like attracts like.

Many of my HR and Compensation colleagues are in the middle of the annual compensation planning process. They are gathering decisions from leaders on what merit increases to provide employees. And they are calculating the annual bonus payouts and preparing to grant long-term incentives.

For those of you who are responsible for total rewards (compensation and benefits), you are glad benefits open enrollment is done. But you are also thinking about your benefits design strategy and how to engage with current and potential providers/vendors for the request for proposal (RFP) process.

Don’t wait to start the design process for benefits until July or later. For many employers and HR leaders, that makes the last six months of the year more stressful than it needs to be.

The word “fair” (adjective) means impartial and just, without favoritism or discrimination.  The word “pay” (noun) means the money paid to someone for regular work.

So, my definition of “fair pay” is providing money to someone for work done and the money is not influenced by favoritism or discrimination.

In practice, I have been involved in many conversations where people argue about what is fair.  And their use of that word is as a comparison.

I don’t know a compensation department that is fully staffed to meet the demand for their support and advice. And with compliance becoming more complicated the demand will only grow for comp team members and their time.

One way to extend your team is to train the HR Business Partners (HRBPs) and Talent Acquisition (TA) team to do some of the compensation work that you are doing today. 

Step 1 – Define the work that the comp team does today that the HRBPs and TA can do. Examples include:

There are several ways for employers to do a pay equity audit.

Platinum – Hire a law firm who has statisticians on staff to do the regression analysis on your job comparator groups. This is a point in time analysis.

Gold – Buy software that is primarily focused on pay equity. This software will help you ensure that your pay equity audit is not a point in time summary. Instead, it demonstrates a commitment to making sure your day-to-day pay decisions are equitable. On any day, you can run reports to understand your pay equity risk, determine which employees need an equity-based pay change, and make pay decisions that won’t cause additional pay equity problems that need to be fixed later.

Employers who are prioritizing pay equity and transparency need to ensure that their compensation programs are well managed, consistent, and effectively communicated.

How do you determine if you are meeting those criteria?

Are your compensation programs managed well?

·        A plan document is written and followed for each compensation program.

When you are determining what decision to make from a list of alternatives, do you think through the consequences of each alternative based on a short-term and long-term perspective?

Years ago, I read a book by Suzy Welch called 10 - 10 - 10. What are the consequences of my decision in 10 minutes? In 10 months? And in 10 years?

So, when I design incentive plans or develop base pay programs, I think about the different time frames and how each stakeholder of the program will be impacted.

Do you keep old versions of job descriptions? Do you include an effective date in your job descriptions?

If an employer sponsors employees on visas and is updating job descriptions, they must track changes to show the before and after versions of the job description. This documentation helps Legal determine whether the changes are significant enough to warrant an amendment to the visa.

Failing to properly document and assess these changes could result in the visa holder losing their work authorization and potentially jeopardize the employer’s compliance with immigration regulations, including the risk of losing their ability to sponsor visas in the future.

Trust is the firm belief in the reliability, truth, ability, or strength of someone or something. It is the foundation of healthy relationships. And it is foundational to creating a workplace culture that supports high performing employees.

Employers, who choose to be transparent about their pay-related decisions and processes, have an advantage. They are better able to attract and retain talent. And their employees are more likely to be engaged and productive.

Pay transparency improves trust between employees and their employer.

For most employers, the pay and benefits provided to their employees is the largest expense. So, it makes sense that they spend a good amount of time making decisions about pay and benefits.

But some employers don’t. They have few pay decision making processes defined and don’t have grades, base pay ranges, or incentive targets defined for their jobs.

They have a haphazard mess of reward decisions that are based on “who asked for what” or favoritism and aren’t defendable. 

About 1 in 5 employees leave their employers because of the lack of growth opportunities. It is the leading cause of employee attrition and has been for the last decade.

What is the next natural step in your career?  Your manager should be able to answer that. And if they don’t have ideas, HR is the next place to go.

The reality is that careers are as unique as the employee on the journey. Sometimes you get a promotion.

Implementing compensation software is not easy.  In most projects you will find the following issues:

1) The employer’s job and employee data are not clean. Errors exist in reporting relationships, job titles, or grades. Or there is data missing in fields that are critical.

2) The time it takes to do the implementation extends beyond the initial estimate. Especially if the current compensation and HRIS team members must do their day jobs AND the project, it always takes longer than expected. And more time means a higher cost.

It is used to recognize and reward an employee for exceptional performance or behavior that is beyond the normal expectations of the employee’s job. Spot awards are given soon after the result or behavior, usually without pre-determined goals or set performance levels. They are intended as “in the moment” recognition or one-time rewards.

 When should a spot award be used?

• To recognize, reward and encourage exceptional performance

• To promote behavior that is consistently aligned with company’s values, culture, or strategy

What does it take to end a toxic relationship or commit to a job search? Pain. 

As human beings we like comfort. We don’t like to change things because if we do, we must deal with the pain of the transition to what is new.

For example, let’s say you dread going to work. You don’t like the work you do or maybe you don’t like the people you work with. You don’t trust your manager, the people around you are negative, you are being paid less than you deserve, no career path exists, or you don’t believe in your employer’s vision and leaders.

At the beginning of the year, HR/Compensation teams set goals to ensure their results support their employer’s goals. The list of HR goals will be long, and the internal resourcing associated with the goals will be lean.  That means that outside consultants or contractors will be hired to appropriately resource projects.

My team and I are looking for compensation projects to contribute to.  What type of work do we do?

• Market Aligned Pay Grades & Base Salary Ranges

• Market Pricing & Job Evaluation