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A holistic approach to communicating about pay|payscale.com2Handle communicating about pay with extra carePerceptions of payValue exchange between employers and employeesCommunication rolesLevels of transparencyCommunication fundamentalsAdditional tips for managersConsider the employee perspectivePractice for tough conversationsMention other perksPay communications: the importance of dataConclusionAbout Payscale34568910101111121314 Handle communicating about pay with extra careEffective communication is essential to every part of an organization’s success. Whetherit’s communicating with customers, stakeholders, or the larger community, craftingand delivering the right message requires thought, planning, and intentionality. Whencommunicating with employees about compensation in particular, extra care is required.Pay is powerful. Not only is it a major expense for an organization, but it’s also whatattracts, engages, and encourages employees to stay.Given the important role of pay in overall organizational success, HR and compensationprofessionals as well as managers and leaders need to consider compensationcommunications from a holistic perspective. When communicating about pay, they mustput themselves in the employee’s shoes, because at the core of these conversations isthe answer to one question:Does the employee feel valued?Value is shown partly through the employee’s salary, but it’s also about their perceptionof how much their contributions make a difference. That feeling of being appreciatedand adequately rewarded for their efforts is what employees are really looking for.That’s why the way in which organizations communicate about pay is so important.When evaluating compensation dynamics, it is crucial to go beyond the surface figuresand consider the holistic impact on employee well-being and motivation. Compensationis not just about money; it’s also influenced by and influential to a multitude of otherfactors. As organizations explore how to conduct their comp communications, it’sessential to first understand perceptions about pay as well as the concept oftotal value exchange between employers and employees. Perceptions of payWe all have biases. Two types of bias are especially important tokeep in mind when it comes to communicating about compensation:confirmation bias and assimilation bias.Confirmation biasis a cognitive bias that saysonce someone has establisheda perception, they’ll look forevidence to support it. Assimilation biasis closely related to confirmationbias. It says that with anestablished perception, someonewill process — or “assimilate” —future informationto support that perception. A holistic approach to communicating about pay|payscale.com4These biases are important to understand becauseemployees tell themselves a story about theexchange of value when it comes to their work.When they feel it’s inadequate or that there’san imbalance, the biases kick in — and that’s aslippery slope toward toxicity. With this mindset,employees will look for things that confirm theirperception of inadequacy and interpret informationin a way that confirms their viewpoint.Employees don’t always understand how theircompensation is determined— often becausethis information is not offered to them. That’swhy there’s a real need to tell workers how you’redeciding what you’re paying them because it’s notjust about pay; it’s also about perception of pay. A holistic approach to communicating about pay|payscale.com5Employees add value in many ways, including through:Employers add value in ways that extend beyond pay, including:EducationBenefitsCertificationsTravelProductknowledgeWork scheduleflexibilityProfessionalbackgroundOrganizationalculture Value exchange betweenemployers and employeesCompensation isn’t just about money.It’s reallyabout the exchange of value between employersand employees. To communicate with employeesabout pay, employers need to understand whateach individual sees as their most valuablecontributions as well as which of those employeevalue drivers truly matter to them.The value both of these groups bring to theengagement is different, and understandingthis value exchange is key to compensationconversations. It’s all part of total valueexchange — what we call “compensation.” IndustryexperiencePaidtime off Communication rolesEveryone in the organization has a role in the compensationconversation, but the timing and exact responsibilities aredifferent for each job function. HR’s roles are to get the programready, continue communicating updates to the executive team,and train the management team. Executives are responsiblefor approving the compensation plan and communicating it at ahigh level to the organization — and, as they’re also managers,carrying out manager communication duties.A best practicefor HR is to prepare talking points for executives,coveringcompensation philosophy and purpose, compensation planchanges at the highest level, and next steps. A holistic approach to communicat