The Comp Doctor

  

 

Should Compensation be a Best Kept Secret or Secret Best Kept?

By Kerry Chou, CCP, WorldatWork

 “If our compensation program is so great, why is it being kept a secret?”  is a question I received from a line manager very early in my HR career, and it has always stuck with me.  Although compensation professionals are typically great at program design and administration, the implementation component, more specifically the communication component, seems to be the “last frontier” in compensation management.  Perhaps it’s because we get so caught up in building something that we often forget that the users need to understand how to operate it. 

The latest edition of the Compensation Programs and Practices Survey (WorldatWork 2010) underscores the ongoing challenges that organizations face in communicating compensation-related information with their employees.  Highlights include:

  • Only about one-half of organizations share their compensation philosophy with employees. 
    • In fact nearly one-third indicate they share “minimal” pay-related information. 
  • Less than half (43%) of organizations share an employee’s own salary range information with him/her. 
    • When organizations were asked what was the most common method used for pay communications (brief or detailed verbal, or brief or detailed written), the most common form used by more than half of organizations was brief verbal. 
  • When this data was cross-tabulated against another survey question on the extent to which employees understood the organization’s compensation philosophy, not surprisingly brief verbal communication was the least effective method for helping employees understand the pay philosophy. 
    • In case you’re wondering, detailed verbal communication was the most effective method, which is used by less than a quarter of organizations (24%). 
  • When asked how often employees received communications regarding their pay on an annual basis, a full 76% indicated “at least once” with only 18% indicating “two or more” times. 
    • Six percent received no communications at all during the year. 

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Kerry Chou, CCP, CBP, GRP
Senior Practice Leader
WorldatWork

Kerry Chou is a senior practice leader in the areas of base and variable compensation, performance management and market pricing. He has more than 20 years of human resources experience and has worked in a variety of industries including high technology, telecommunications and transportation.

Over the span of his career, Chou held several senior human resources positions at eFunds Corporation, America West Airlines and Northwest Airlines. Most recently, he served as Director of Global Compensation and Benefits for ON Semiconductor.

Chou was a recipient of the WorldatWork 2006 Publications Contributor of the Year Award for an article he wrote for workspan that year. He has been quoted in The Dallas Morning News, Econoplay, Sales & Marketing Management Magazine and several HR trade publications. He served for several years on the WorldatWork National Compensation Advisory Board.

To see similar articles on compensation, benefits and total rewards, visit WorldatWork.