✨ Involve while you evolve
By Hebba Youssef
My employees keep asking me questions about pay transparency. How do I navigate those conversations? What do I say? Manager at an early stage startup, we don’t have a public policy and I don’t want to just tell my employees to go to HR.
📣 Cassidy Edwards, Director of People Operations at Tradeblock:
This is a great question and we have definitely seen an increase in pay transparency conversations. Why?
They tend to create a commitment towards accountability and equity (i.e. think how this could impact the gender pay gap).
✨ While pay transparency is evolving, establishing these policies at a startup can take some time. With that being said, the topic can feel like one to avoid, but there are practical ways to navigate a fragile landscape Here are a few ways to tackle in your people leader day-to-day:
- Active Listening is essential: when approached by employees, activate actively listening to concerns. This will help them feel valued and heard.
- Empathetic leadership for the win: show understanding and reassure them that pay transparency is important.
- Get Transparent: we have had to let employees know that this is something we are actively working on as we develop processes + policies. (make sure you discuss with HR for accuracy)
- Vibe with your HR: see if you can get any insights from your own HR and inquire about what you can share. Bonus points: ask if you all are working towards an established Compensation Philosophy.
- For the People: ask your employees how you can help address their concerns and/or questions.
- Follow-up: circle back to employees based on what you learn from HR and continue the open conversation.
✨ When you involve employees, it helps to build trust especially at an early-stage startup.
Do folks currently SHARE pay bands internally with their team? Why or why not?
📣 Alex Clermont, Practice Manager at TDC:
Yes. We have always had internal transparency about pay, but last year we brought in an outside consultant to do a pay study, see where we stood in comparison to our industry standards, and establish new pay bands (this could also be done internally).
Staff were surveyed and involved in focus groups as part of that process, and the consultant gave a presentation at the end that included process, decisions, and implementation plan. This included salary bands for all positions.
I find it’s very positive, people appreciate feeling informed and knowing what their trajectory may look like. I will say there are two main….maybe not “challenges” but things you have to be really ready to reckon with.
- You need to be prepared to justify your salary scales. Why is this position more valuable than that position? What do our salaries reflect about our values and priorities as a company? How do we make decisions about where someone falls in a band? How consistent are we? What is our stance on internal equity? What new information might make us look at these numbers differently? Employees will have their own opinions on the salaries once they see them, and there’s nothing wrong with that, but you need to be prepared to answer their questions and be transparent about the whole process. Not just the numbers.
- You have to be very ready to manage performance issues with your middle and senior level staff. Nothing demoralizes people more than seeing someone half assing their job and getting paid twice as much as they are for putting in the real work. Now obviously sometimes what the employees see directly isn’t the whole story, but you need to be prepared to manage the optics and the morale implications regardless.
At the moment, we haven’t disclosed our pay bands.
This year, we embarked on a phased approach towards pay transparency, believing that it’s essential to first familiarize and educate our organization with the broader compensation landscape, including our compensation philosophy and what it means to them as an employee, how we determine our pay bands and an employee or new hire’s place in band, market salary surveys and the importance of determining appropriate bands, aligning bands with actual job roles/titles and levels, etc.
Our initial phase focused on educating the organization the components of compensation, our organizational compensation philosophy, and how we determine market pricing using various sources.
We’ve recently established the first version of our Career Framework and Job Catalog, made changes to our leveling and titling, and introduced functions and sub-functions. This means we’re in the process of revising all our pay bands, which will lead into Phase 2 of compensation education.
Our upcoming focus is on deciding who gets to see the pay bands, the extent of its reach within the organization, and any additional training or empowerment needed.