Keep Your Edge

  • Compensation

Four Keys to Improving Compensation Transparency

blank avatar
Todd Black
on May 02, 2016

Everyone involved in the annual compensation cycle agrees it hasn’t changed much over the last few decades, but the need to communicate and visualize compensation data is changing.  HR, Finance and Compensation Administrators want to make compensation transparency a prevailing practice with their managers and employees.

When you analyze the spectrum of educating managers and the need to communicate compensation transparency to your workforce, you realize the need to for a clear strategy and the tools required to provide consistent information for everyone to use from the top down.

But where are you, as an organization on the transparency scale?  Push the boundaries with these four strategic developments and begin to unlock the keys to improving compensation transparency

1. Empower Managers with Visibility

HR always initiates the conversation with employees around compensation, but managers are increasingly called upon to help with communication on increases, incentives, and overall compensation. To ensure a clear understanding of the calculations and processes, we need to empower managers with the ability to see more than the end result, and let understand the underlying basis for decisions. The question to ask first is: do we have a compensation system that is easy to understand and manipulate, and does it provide the right level of detail for managers to communicate and offer transparency?

PeopleFluent provides a well-rounded approach to the compensation management process and allows managers to view, based on their security profile, the right amount of information and data to communicate, and to be as transparent as possible to their employees about their compensation. The Worksheet Navigator provides HR, Administrators and Managers with a hierarchical approach to compensation data and allows for a vantage point into the employee’s salary, incentives, stock awards, bonuses and overall compensation calculations.

2. Train Managers on Compensation Communication

Compensation transparency doesn’t necessarily mean revealing all compensation information to your workforce. Both managers and employees require different levels of communication and insight into the right parts of the system. For example, few organizations reach the level of transparency where they reveal to their employees the market studies they used to compare compensation by job title.

Websites like Glassdoor, LinkedIn, and Facebook are increasing the boundaries of transparency and making it easier for employees to learn more about the salaries offered for their type of position. Engaging influencers (aka Managers) in your organization would mean educating and training them on your pay philosophy, pay strategies or pay practices so they can communicate more effectively. PeopleFluent has created a visual and engaging opportunity for company influencers and compensation professionals to communicate their compensation philosophy, as it exists today. The Compensation Mirror Dashboard allows for the opportunity to show the current status of compensation in different ways and provides a mechanism for open discussion and insight on where the company’s compensation compass is heading.

3. Deliver Comprehensive Employee Statements

Companies today are faced with a changing workforce; baby boomers are retiring, Gen Xers are taking more management roles, and Millennials have now become the largest generation in the workplace. This change also means there is a level of transparency required in compensation that some are neither comfortable with nor equipped to carry out. Most Executives, who are baby boomers for the most part, still follow the same procedures they have for years when discussing compensation with their employees, which is the customary annual review and single sheet of paper slid across the desk showing the employee what their merit increase consists of and a line for them to sign and approve.

However, this one-sided compensation conversation won’t appease today’s workers, who want to ensure that they are being fairly paid. While some Millennials would prefer you makes things easy and just post their compensation statement on the company’s public website so they can download and compare with others in their position, company and industry, the reality is employees want to know how their performance aligns with the organization’s and team’s goals.

Complete disclosure of data and compensation information with every facet of your workforce can only be provided with a complete catalog of standard reports, ad-hoc reporting and a comprehensive compensation statement. PeopleFluent Compensation provides HR and Managers with the ability to compile the right amount of data to satisfy every employee’s appetite for information. Statements are delivered out of the box, but can be modified to show incentive calculation details as well.

4. Analyze and Visualize Compensation Practices

While Compensation professionals are provided with tools that allow them to calculate compensation to the most complex and accurate degree, transparency is usually confined to rows and columns with very little visibility into various vantage points. The struggle begins when there are a number of data sources, and you try to combine them with any sense of confidence. Even though 40% of employers report they have transparent, open communication around salaries with employees, only a small margin, less than 20%, plan to change their non-transparent ways in their compensation planning process for 2016. 1

Why not provide your compensation professionals, HR, and managers with a tool that allows them to analyze and visualize the company’s complete compensation picture? Now more than ever, transparency is built around two factors, data and communication. You need to have the right data to communicate correctly, based on the various data sources throughout your HCM, Compensation, and Payroll applications. PeopleFluent’s Compensation Command Center provides a window into the different dimensions of compensation data and delivers different lenses to view and communicate compensation completely.

Improve Transparency and Retain Top Talent

As an executive in HR or Finance you will want to provide your managers with the most up to date information to ensure you are as transparent as possible.  Next managers will need training on both the compensation practices and philosophies of the organization, and the best way to communicate in a transparent manner.  Everyone’s desire is to provide employees with the most comprehensive and accurate compensation data to ensure employees understand the calculations, as well as the process of their increases or incentives.  

Improving compensation transparency is a journey that most organizations want to begin, continue or wish they had the tools to take them to the next level. PeopleFluent Compensation can help. Leading industry analysts including Gartner, Ventana, and IDC agree PeopleFluent provides a complete and comprehensive compensation application. Our technology allows your organization to engage, empower, and deliver to managers and compensation professionals the ability to be more transparent and communicate with employees and retain top talent. Experience it for yourself – schedule a demo today.


1. 645228-payscales-2016.pdf

Keep Your Edge

© 2019 Peoplefluent. All rights reserved. Peoplefluent, the Peoplefluent Logo, Mirror and Colossus are among the registered trademarks and trademarks of Peoplefluent in the United States and various other countries.Other names and brands may be claimed as the property of others.

Privacy Policy   Sitemap

Part of Learning Technologies Group plc