Helping Line Managers Communicate Pay Programs

Helping Line Managers Communicate Pay Programs




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Helping Line Managers Communicate Pay Programs
By Diane Leary and Christopher K. Young, Buck Consultants
As businesses struggle to balance spending in a weak recovery
with providing the rewards needed to attract and retain top
performers, many are recognizing the importance of sharing
their pay philosophies with managers and employees. Because
line managers — from the CEO through business unit heads,
managers of sales staff and manufacturing plant managers —
typically are the primary decision makers when it comes to
pay, they can explain the reasons behind specific pay
decisions to their employees.
This article explores line man

agers’ role in communicating pay
programs — and pay decisions — to employees, and how human
resources can help. Employees will understand, and possibly
appreciate, their pay programs more when line managers and
human resources work in partnership to communicate with
employees about pay.
The Line Manager’s Role
Employees perceive pay as a reflection of the value of their
contributions. It’s understandable, then, that they want to
know about types of pay they receive and what they need to
contribute to increase their pay. They want to understand the
relationship between what they “do” and what they “earn,” and
how pay decisions are made and why.
And here’s where line managers play a critical role: They are
uniquely positioned to translate the company’s expectations
for employees and identify what they need to do to make the
company successful, which, in turn, will result in more cash
for the company and its employees.
Communicating Pay Programs
Although line managers need to be generally familiar with how
pay programs work in order to make informed decisions about
pay and communicate those decisions to employees, they may not
be the best resource to educate employees about the mechanics
of the pay programs. Instead, human resources should provide
ongoing information to employees about the overall pay program
and how its individual components work, while line managers
should focus mainly on enhancing employee engagement and
performance, whether through incentives or by reinforcing the
total value of working at the organization.
For example, human resources can deliver educational materials
— such as brochures and pamphlets — and conduct employee
presentations to:
Illustrate the process used to determine base pay
Explain the mechanics of an incentive plan and how it
relates to other elements of pay
Provide context for evaluating the competitiveness of the
overall pay and rewards package.
In addition, human resources can provide talking points,
checklists, frequently asked questions and answers and
“meetings in a box” (i.e., a presentation and speakers’ notes)
for managers to use in discussions with employees about pay.

Furthermore, human resources can proactively monitor the
effectiveness of the pay program and help identify and
facilitate corrective actions, as appropriate.
Pay Within the Larger Context of the Organization’s Success
Communication about pay programs by itself will not make an
organization more successful. The specific steps required to
make a company successful must be part of an ongoing
conversation throughout the organization. Regular management
meetings that emphasize achieving goals help employees see the
bigger picture. Providing examples and tracking results on an
ongoing basis let employees see how they are doing in relation
to their individual and team goals.
Communication in Action
A few years ago, Buck Consultants worked with a major
financial organization that recognized through an employee
opinion survey that employees did not fully understand or
appreciate the pay and benefits the company provided. Buck
Consultants was asked to create materials in a variety of
media to reinforce the value of the pay programs within a
total rewards framework and deliver the messages over an
18-month period.
After getting senior leadership buy-in, the first step was to
focus on making line managers comfortable with pay concepts.
Buck Consultants wrote training materials for human resources
to conduct hands-on workshops for line managers to help them
understand, in general terms, the various components of pay.
The workshops included interactive role-playing to help
managers make pay decisions based on different levels of
performance and then communicate the decisions to individuals.
In addition, managers received tips to enhance the ongoing
coaching they provided to employees to improve performance.
Next, Buck Consultants created two versions of a detailed
brochure — one for managers and one for employees — to explain
the different pay components so everyone in the organization
would have a working knowledge of the programs. The brochures
illustrated the process human resources follows to ensure that
pay and rewards programs are competitive relative to peer
companies. To facilitate meaningful discussion about pay and
performance, both versions included checklists for managers

and employees to follow in preparation for pay and performance
discussions.
Throughout the entire period, Buck Consultants drafted
articles for the organization’s in-house newsletter and
created scripts for streaming video on its intranet and at
live town hall meetings. The goal was to reinforce the value
of the company’s pay and rewards on an ongoing basis.
The impact of the communication effort was overwhelmingly
positive, as measured by the subsequent employee opinion
survey. Results showed an increase in the percentage of
employees who agreed their pay was fair (56% vs. 53%) and said
they understood how pay decisions were made (61% vs. 55%),
compared to the findings in the initial survey.
Conclusion
Ultimately, the top-performing companies create an environment
where employees “trust” the system and know they are being
treated fairly. Creating such an environment requires
transparency, honesty, and ongoing communication and dialogue.

It is critical that employees know how rewards work and
understand why their contributions are valued. Together, line
managers and human resources can ensure employees have such
knowledge, resulting in the employees having confidence that
the organization values their work and expertise.



About the Authors
Diane Leary is director of communication for Buck Consultants
in its New York office. She can be reached at
diane.leary@https://www.wendangku.net/doc/ae18191869.html,.
Christopher K. Young is managing director of compensation for
Buck Consultants in its New York office. He can be reached at
ck.young@https://www.wendangku.net/doc/ae18191869.html,.



Read the December 2011 edition of Compensation Focus.
Contents ? 2011 WorldatWork. No part of this article may be
reproduced, excerpted or redistributed in any form without
express written permission from WorldatWork.


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