2. Compensation and benefits plan
Keeping salary information secret, or forbidding employees from discussing compensation information, may have worked in the past. But in a world where this information is likely to be discoverable anyway, sharing it may make more sense, especially when combined with information that educates the workforce on how compensation is determined. (“The Rise of HR Wisdom”)
Imagine that your employees know and talk freely about their compensation and benefit plans. Would you be comfortable with that? If the answer is no, than you have to rethink your effective compensation plans before you move to transparency.
Because usually ‘non-disclosure’ of compensation information is an illusion anyway. Employees still discuss how much they get paid or at least tell their ‘closest’ colleagues and then the rumors start spreading.Compensation is being discussed and there is nothing HRs can usually do about that. The problem is that these discussions are usually based on misinformation, misunderstanding or rumors.
If they are going to talk about money anyway, let them at least talk the truth by disclosing the compensation plans for your employees.
As Sharon McKnight, CCP, SPHR advices: “Before you talk with employees about compensation, prepare a written overview that explains your organizational pay and benefit program’s policies and procedures. If you don’t already have one, a good place to start is to develop a pay philosophy/strategy. If you do have one, make sure that the document contains a statement regarding your organization’s compensation philosophy, followed by details of the pay strategy that include:
- Cash and noncash compensation (including job grade structure/ranges if applicable)
- Compensation plan review
- Base salary management
- Performance ratings
- Salary increases
- Incentive pay
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