Nancy Petrarca Romanyshyn

Employees today have more information about compensation than some of us did when we started as compensation professionals years ago. We need to help our companies "own the story" by using simple language to explain why we pay what we pay and doing it OFTEN. Begin by answering simple questions - What do we mean by competitive and fair? By "pay for performance?" - and be specific about how these principles show up in pay and broader rewards. Stay away from the technical aspects that we all enjoy "nerding out" to. By engaging employees in a regular discussion about pay and assuring them we engage in rigorous processes to design, administer and monitor pay programs, we will engender trust and higher levels of engagement.

Pay ranges are undergoing a massive transition with pay transparency and the requirement for job-based ranges to be disclosed. Companies should consider ranges that reflect a way to manage compensation but in consideration of how best to communicate as well. This means narrower ranges and putting them in a career context. Framing ranges in terms of functions/job families and career paths will help you determine the appropriate range widths and midpoint progressions. By refining designs to reflect (1) what you pay individual jobs and (2) how folks typically progress through those career paths, you are well-positioned for increasing disclosure requirements as well as better conversations with employees to enable opportunity transparency.

I agree with the comments that this can become an opportunity to review your compensation design strategy with leaders. By framing job matching in your overall career architecture, you can conduct an organized review of how you're matching roles with leaders of the functional areas and other stakeholders. This will likely surface the need for specific skill sets and responsibilities, and you can show how you're translating them into the comparisons used for matching jobs and tying to compensation recommendations.

One big item that is missing from the conversation around compensation philosophy is that the philosophy may differ by organizational segment as well as by compensation component. Defining the purpose of base salary, short-term and long-term incentives by segment will help map the path forward for eligibility for different components, the design of the components, and then a plan for benchmarking them. For example: Does base salary represent pay for the skills? For experience? For scarcity of skills and experience? For performance? What are the differences in the answers to the above questions by function, by level, by job? These will help you to define the market, your compensation data sources, and how you use them.