- Compensation is a sensitive topic. A lack of clarity around compensation structures and decisions can be demotivating and even lead to turnover.
- Managers often don’t fully understand compensation philosophy, principles, and compensation plans themselves, which can lead to unclear communication with employees.
- Managers find compensation conversations difficult and tend to fall back on “that is what HR told me to do” to avoid conflict rather than taking on a leadership role in compensation discussions.
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- Managers play a key role in compensation communication. Managers must understand and be able to clearly communicate the compensation philosophy and structure and effectively communicate compensation decisions.
- Clear up the confusion around compensation by upskilling managers. Provide managers with the necessary training so that they are comfortable having effective pay conversations. Reduce confusion and wasted time by ensuring that the first conversation is clear.
- Remind managers that it is not all about base pay. All too often managers and employees think only of base pay. Emphasize the entire Total Rewards package from variable pay to non-cash benefits to recognition.
Impact and Result
- Improve managers’ understanding of pay practice and how compensation decisions are made.
- Increase managers’ comfort level in having compensation conversations with staff and improve the effectiveness of those conversations.