Pay Transparency Requires Clear, Consistent Definitions
C2HR members recognize that pay transparency is critical to attracting and retaining elite talent. In our most recent Annual Compensation Surveys, 55 percent of content developers and 78 percent of connectivity providers cited transparency in pay ranges as one of their most pressing issues. Evolving pay transparency requirements present C2HR members with an opportunity to hone both their compensation philosophy and their strategies for communicating that philosophy to employees.
One of the first things to do is establish clear, consistent definitions for “place-in-range.” You will need metrics and measures to explain to candidates and employees the criteria for receiving the minimum, midpoint and maximum compensation in a pay range.
Hali Croner, president and CEO of the Croner Company, which conducts C2HR’s Annual Compensation Surveys, shared potential definitions for place-in-range with C2HR members. During a recent member webinar, she outlined the following definitions:
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Developing: New in the role; on the “learning curve” for the role; meets some criteria for the job
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Fully Skilled: Experienced in the role; consistently meets requirements of the position; meets majority of criteria for the job
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Expert: Highly experienced in the role and organization; consistently performs beyond the requirements of the position; meets almost all and is exceeding many of the criteria for the job.
“Candidates will naturally want the top of the pay range,” said Croner during the webinar. This probability makes it essential that managers have clearly defined expectations and criteria for the start, middle and top of the pay range to justify placement at a position other than the top.
As your company establishes, publishes and communicates pay ranges to employees, keep these additional insights in mind.
| 1. |
Get
buy in from company leaders before
you begin publishing or sharing newly defined
ranges with employees. As you look holistically
at how and what you pay, you may discover that
you need to make individual compensation adjustments,
group pay adjustments, and policy and procedure
changes.
|
| 2. |
Include
more than salary. Information
published by the U.S.
Department of Labor notes that compensation
is defined broadly in most pay transparency regulations,
and it includes salary, wages, overtime pay, shift
differentials, bonuses, commissions, vacation
and holiday pay, allowances, insurance and other
benefits, stock options and awards, profit sharing
and retirement.
|
| 3. |
Be
prepared for inequity. Establish
a plan for addressing inequities that are uncovered.
For example, a new
Pew Research Center analysis of median
hourly earnings of both full- and part-time workers,
revealed that in 2022, women earned an average
of 82% of what men earned. As your company institutes
pay ranges, you may uncover similar inequities.
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Be sure to attend the C2HR CON in Brooklyn, NYC, to learn more about pay transparency and other Next Gen HR topics.
