Employee Compensation: Moving Towards Greater Salary Transparency

  • With whom will you share compensation information? This might include people inside the organization (managers and employees) as well as outside the organization (job applicants and the public). The answer generally depends on your desired level of salary transparency.
  • What do you want to share about employee compensation? Consider items such as your organization’s compensation philosophy, desired competitive position in relation to the market, employee’s own pay range vs. pay ranges for all jobs and short-term incentive plan targets.
  • Is pay transparency the law? In some states, pay transparency is required by law; in Colorado, for instance, all job postings must display the hourly or salary compensation (or a range of the hourly or salary compensation) and a general description of the benefits and other compensation offered.3
  • When will this information be shared? Options include providing the information when an employee starts, providing it on employees’ requests or providing ongoing access.
  • Where will this information be shared? Communication methods might include intranet, job postings and one-on-one employee/manager meetings.
  • Why are you sharing this information? What do you hope to accomplish by doing so? Reasons might include pay transparency as part of an organization-wide initiative to enhance communications with employees and improve morale.
  1. Define the organization’s compensation philosophy and write it down. Evaluate jobs in an objective and consistent manner using comprehensive, current data.
  2. Using the obtained data, build a market-based pay structure along with short-term incentive plan targets and criteria. Align employee pay with the pay range for their job, leveraging your compensation strategy.
  3. Create a compensation guide to ensure fair and consistent pay decisions for new hires and current employees. Train managers and decision makers on the compensation programs and teach them how to best discuss compensation information with employees.
  4. Communicate pay changes in advance of the effective date for base pay and prior to the performance period starting for incentive plans.

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