Communicating About Compensation

I see many companies continuing to be very secretive about compensation information.   I’m not talking about actual compensation figures for an individual—that of course is private and should be protected.  What I am referring to is the process of informing staff about the key principles of the compensation program, how it was developed, the data that was used, and the overall pay philosophy of the company.

Some firms don’t even show an employee what salary range he or she is in.  The fear, I suppose, is that the more information you give, the more questions you will get.  And the more questions you get, the more potential challenges or headaches you will have to deal with.

I can appreciate that sentiment.  But when a company is overly secretive about sharing compensation information, employees may interpret that as:

“You don’t want to share this information with me because then I will figure out that the company’s approach to compensation is not very well thought out and based on the subjective decisions of management.”

and/or

“You don’t want to share this information with me because you do not believe I can handle it in a mature and adult manner.”

Neither reaction will help to develop a productive and engaged workforce.  It’s time to take the lid off our compensation programs.  It’s an opportunity to show your employees not only that your compensation program has been developed on sound principles, but that you trust them to use the information in a mature and professional manner.

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