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Learning of
the Month

Do you know his salary?! 


Pay transparency has been talked about for many years - mostly by academics and by companies that have already implemented transparency. 


Where does your company fall along the continuum - from keeping all salary info private with perhaps only HR or the head of the business 'in the know'.... to publishing individual salaries for all to see?  In the middle, we might find a company with salary ranges for each job grouping and that shares that data with managers. 


These days, leadership is moving to a more inclusive, less authoritative and paternalistic model. Progressive, more profitable, companies share more with employees - both decision-making authority and information. 


Many workers, academics and government bodies are also writing and talking about pay inequality - not just in general but also within specific industries and for the same jobs. For the latter, pay transparency helps. It helps women and minorities secure equal pay Day 1 (eliminating the compounding effect), and it helps companies stay out of court and create a healthy culture where employees can focus their energies on profitable ideas. 


So why aren't companies doing this? Why isn't HR leading this?


It's hard! Transparency requires not just skill but also process. For example, managers need to be skilled at determining the right salary for each job and employee as well as skilled at justifying this decision in a way that leaves the employee feeling good. 


Pay transparency also requires a solid pay structure - ranges based on market data and the company's strategic priorities. This gets even more complex when you factor in total compensation – e.g., performance bonus ranges and criteria. 


The to-do list for getting to Pay Transparency is long.  So where do you start? First, get the basics right - ask HR and/or managers to compare salaries of employees in the same job. If they are different, can you rationalize this (logically and consistently) if the information went public? If not, or if not in a way that would make each employee feel good, make adjustments. This simple step will start building that critical skill in your managers and will also keep you out of court! 


Next, make sure your salary and total compensation structures are up-to-date and driven by your compensation philosophy (which is driven by your company strategy). This might require some outside help but, if you can, keep as much of this work as possible internal (use a 3rd party to secure market data though) so that you build up this analytical skillset and, more important, are close enough to the data to be able to justify individual salary decisions. 


Third, work with your managers - model from the top down for example - to increase their comfort and ability to make equitable, logical decisions about starting salaries and promotion adjustments. You don't want to be uncovered as a company that will squeeze a few dollars from your precious 'talent' just because you can! 


If you get good at the above, you'll be ready to think about the merits of moving to complete transparency and a plan to get there. 



Increasing Retention, Lowering Attrition              


At a Taproot 9/11 consulting event, I was privileged to help the CEO of a nonprofit that places healthcare workers in homes. The care worker role is difficult – lots of regulations and paperwork to manage and physically and sometimes emotionally draining work that doesn’t pay a lot.  His company’s number 1 challenge is high attrition. So that’s what we focused on!


We can bucket retention strategies into what you do before, during and after the hiring process or into four areas: ‘recruitment,’ ‘onboarding,’ ‘stickiness,’ and ‘compensation and benefits.’ Specifically,


  • How do you recruit to find people who will want to do this job and who will be good at it?

  • How do you onboard to convince the new employee she/he made a good decision?

  • How do you keep the employee happily ‘stuck’ or engaged to the job and the company, her/his peers and boss and clients?

  • What incentives and benefits do you provide that employees need and want and that you can afford?


By talking through these questions, we developed a list of attrition reducing actions his company could try. For example, in recruitment – study your star, tenured performers and identify the characteristics (competencies, experiences, work habits, job likes/dislikes) they share and use those to screen and interview for similarly successful talent. Another idea is describing in detail the work and environment before the employee accepts or even applies to your job – via a detailed job description, sample client scenarios (the good and bad) and even videos of work simulations.  


Just one or two different approaches in each of these four areas can save time and money long term.

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