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Managing Pay Transparency…Before It Becomes a Problem in the Workplace

Posted on November 19, 2014
HeliosWritten by Helios | Email author

It’s been said that on the first date, there are two things you don’t discuss: politics and religion. For generations, the same could be said for one topic in the workplace: how much money you make. But now, the Department of Labor is proposing a new rule that would “bar pay secrecy and encourage pay transparency among federal contractors”.

While it sounds like just another regulation outlining requirements for government contractors, this could help employers take a step in the right direction of avoiding unlawful wage gaps based on race, gender, or other protected class status. All things considered, this potential new regulation poses a new way to ensure equality in the workplace, so what could possibly go wrong?

Three Tips on How to Manage Transparency so that Compensation Doesn’t Lead to Problems in the Workplace:

Establish a Philosophy

Ensuring that your organization employs a compensation philosophy that is consistent with cultural definitions of success will prevent individual compensation decisions that may leave you open to liability. Questions to be sure are answered could include: “How will we weigh education versus experience?”, “What is our policy on pay differentiation between manager and direct reports?”, or “To what extent will we consider our Affirmative Action Plan in making each compensation decision?

Managing Pay Transparency Avoid Comparing

Each individual is just that: an individual. When making compensation decisions, remember to weight education, merits, and the value of the position in the market. The importance of compensation equity within an employee’s structure cannot be overlooked, but it can’t be the end all and be all. Stick to your compensation policy and philosophy to ensure consistent and fair treatment.

Actually BE Transparent!

The compensation decision-making process doesn’t have to be about smoke and mirrors. Highlight the pieces that matter most to your organization and communicate the importance of those items often. The more team members understand what drives their organization’s compensation philosophy, the easier it will be to demonstrate exactly what went into determining their salary.

As always, as soon as more information is available, you can trust Helios to provide you the most up to date best practices available.

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