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Compensation Function Heightens Focus on Communication 
 

9/6/2012  By SHRM Online staff 
 
 

Compensation professionals are placing a higher priority on compensation communications, according to a new study report, The Evolving Compensation Function.

WorldatWork, an association of total rewards professionals, collected the survey data in January 2012 from among the association's members, who typically work at the managerial level or higher at large North American companies. Among the findings:

Nearly half of the 656 respondents said they plan to focus more on effectively communicating the value of total rewards to employees, and especially to line managers.

Less than one in three respondents reported they are able to focus strongly on compensation communications today.

Nearly one in three plan to increase their use of a variety of digital communications to enhance compensation communications.

Compensation Feedback and Communication

Statement

Strongly agree or agree

Our compensation function seeks feedback from internal business customers and employees.

67%

Our compensation function is focused on increasing the content and frequency of compensation-related communications to the organization.

50%

We use customized tools and technology to deliver compensation solutions.

49%

We use off-the-shelf technology to deliver compensation solutions.

35%

We use a variety of digital communications to connect with employees about compensation.

34%

Our compensation function effectively communicates the value of total rewards to line managers.

29%

Our compensation function effectively communicates the value of total rewards to employees.

25%

Source: WorldatWork.

 

A separate study, the WorldatWork 2012 Total Rewards Professionals’ Census: What Differentiates Top Performers, identified the ability to communicate and connect as one of the eight key differentiators of top performers in the total rewards professions, yet found that communication is not a development priority for rewards professionals.

“The compensation function is certainly evolving,” said Kerry Chou, CCP, a practice leader for WorldatWork. “Communication and relationship skills are becoming as important as business and technical expertise and need to become a development priority. Experience has shown time and time again that even the best designed compensation programs poorly communicated are perceived negatively.”

Connecting Pay to Business Strategy

In a new WorldatWork video, Communicating to Ensure Compensation Program Success, Ann Bares, managing partner of Altura Consulting Group, shared several strategies to effectively communicate about pay. One way is to make the link between pay and business strategy stronger and more clear. “Most of the employees we’ve surveyed believe they understand the basic mechanics of their pay,” Bares said, “but they don’t see the connection to business strategy.”

Bares said the biggest mistake compensation professionals make is not communicating early enough in the process. “It’s a mistake to wait until the pay program is in the implementation phase to begin thinking about communication. We are sending clear, often unintentional messages to employees and managers in every element and every step of designing and implementing compensation programs.”

Related SHRM Articles:

As Economy Improves, It's Time to Revisit Pay Structures, SHRM Online Compensation Discipline, January 2012

Counter Misperceptions About Pay, SHRM Online Compensation Discipline, June 2011

Employees Hesitant to Discuss Salaries with Boss, HR, SHRM Online Compensation Discipline, February 2010

Quick Links:

SHRM Online Compensation Discipline

SHRM Salary Survey Directory

SHRM Compensation Data Center

SHRM Metro Economic Outlook reports

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