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Years ago, I was working with a company on navigating their first Compensation Review cycle. After gathering proposed salary increases from leaders, it was time to review them with the CEO. 𝘛𝘩𝘦𝘯, 𝘴𝘰𝘮𝘦𝘵𝘩𝘪𝘯𝘨 𝘪𝘯𝘵𝘦𝘳𝘦𝘴𝘵𝘪𝘯𝘨 𝘩𝘢𝘱𝘱𝘦𝘯𝘦𝘥. The CEO requested the salary increases to be sorted from 𝗵𝗶𝗴𝗵𝗲𝘀𝘁 % 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝘁𝗼 𝗹𝗼𝘄𝗲𝘀𝘁, focusing on the higher increases. As we went through each employee, I noticed a few 𝘀𝘂𝗯𝘁𝗹𝗲 yet 𝗿𝗲𝗰𝘂𝗿𝗿𝗶𝗻𝗴 𝘁𝗿𝗲𝗻𝗱𝘀: 1️⃣ The CEO probed longer and asked more questions about salary increases for a certain gender category. 2️⃣ Promotions for employees who started in lower level positions drew extra attention (e.g., when reviewing an employee's increase, the CEO said, “I remember when X started as an Associate just a few years ago”) 3️⃣ If an employee had received a high increase before, the CEO was more hesitant in approving another high increase even though they were a high performer and/or paid below market. These actions weren't intentional or malicious — they were unconscious but, they were biases nonetheless. Perhaps the CEO simply had more interactions with certain group of employees vs. others, or maybe there was a subconscious bias about rapid promotions from junior roles. Regardless, below are 3 strategies I've found highly effective for reducing unconscious bias when making pay decisions: 🔢 𝗦𝗮𝗹𝗮𝗿𝘆 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 Implement a salary matrix (example below) that anchors salary increases to predefined metrics (e.g., compa-ratio & performance rating). This structure encourages consistency and fairness, preventing arbitrary decisions from creeping in. 📚 𝗧𝗿𝗮𝗶𝗻𝗶𝗻𝗴 & 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 Make sure managers understand the company’s compensation philosophy. Train them to evaluate compensation based on objective factors like performance, contribution, and market data, rather than personal anecdotes or perceptions. ✴ 𝗘𝗺𝗽𝗼𝘄𝗲𝗿 𝘄/ 𝗗𝗮𝘁𝗮, 𝗯𝘂𝘁 𝗗𝗼𝗻'𝘁 𝗢𝘃𝗲𝗿𝗹𝗼𝗮𝗱 Provide leaders with various data points like market benchmarks, internal salary comparisons, and employee performance. However, too much data can result in analysis paralysis. I’d love to hear from other HR, comp and business leaders: What strategies have worked for your organization to minimize unconscious bias in pay decisions?

💬 The Performance Review season is approaching, and let’s be honest—most people are thinking about one thing: the compensation review that follows! 😅 This is our chance to reassess and adjust salaries, ensuring fairness and recognizing top performers in our teams. But what if your company doesn’t have the budget to offer pay raises? This is a dilemma many organizations face, and it’s a big topic when it comes to balancing Recognition and Reward 🎯💼. Here’s one thing NOT to do if you can’t afford salary increases: 🚫 Avoid ‘dry promotions’. This is when employees are given new job titles and additional responsibilities without a corresponding salary increase. While it might seem like a cost-saving solution, it can backfire. Here’s why: 1️⃣ Morale takes a hit – Asking employees to do more for the same pay sends the wrong message. It can make them feel undervalued, which affects motivation and engagement. 2️⃣ Employer branding risk – It can damage your company’s reputation. People talk, and dry promotions can make your company seem like it doesn’t value employee contributions. 3️⃣ Market value mismatch – A new job title often increases an employee’s value in the market. If you don’t adjust their salary, you might lose them to a company that’s willing to recognize their worth financially. 💡 If you can’t offer a raise, explore other ways to recognize your employees: career development opportunities, flexible benefits, one-time bonuses, additional leave (PTO), half-days on Fridays, or even equity options. Remember, compensation isn’t just about monthly salary increases—there are other creative ways to show employees they’re valued. Know your options! #PerformanceReview #Compensation #EmployeeEngagement #TalentManagement #Leadership #CareerDevelopment #HR #RecognitionAndReward

A salary review impacts company culture more than any offsite. Yet, companies spend months planning offsites, and then speedrun their salary reviews. New data from Ravio shows most reviews happen without proper market data or clear frameworks. 40% European tech companies still use spreadsheets to manage compensation. 😳 What’s more, 60% of companies price new roles based on candidate salaries collected by their recruitment team. These techniques result in mistakes. And even small salary mistakes can create big retention problems. So, here’s some advice on how you can can improve your compensation reviews: 1️⃣ 𝗗𝗼𝗻’𝘁 𝗿𝗲𝗹𝘆 𝗼𝗻 𝗺𝗮𝗻𝘂𝗮𝗹, 𝘁𝗶𝗺𝗲-𝗰𝗼𝗻𝘀𝘂𝗺𝗶𝗻𝗴 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 Spreadsheets, while functional, are prone to errors and can be incredibly time-consuming. There are plenty of tools out there (like Ravio) which can do the heavy-lifting now. Automating part of the process will make you 10x more efficient, freeing up HR and execs time to focus on managing compensation, not spreadsheet formulae. 2️⃣ 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝘃𝟭 𝗰𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗽𝗵𝗶𝗹𝗼𝘀𝗼𝗽𝗵𝘆, 𝗶𝘁 𝗱𝗼𝗲𝘀𝗻’𝘁 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗯𝗲 𝗺𝗮𝘀𝘀𝗶𝘃𝗲 I’m often asked by HR leaders when they should write a compensation philosophy. In my opinion, the sooner the better. Without it, it’ll become very hard to rationally explain compensation decisions to employees or management. It doesn’t need to be complicated, just 1-2 pages that aim to answer why you pay the way you do. 3️⃣ 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝗰𝗹𝗲𝗮𝗿 𝗷𝗼𝗯 𝗮𝗿𝗰𝗵𝗶𝘁𝗲𝗰𝘁𝘂𝗿𝗲 𝗮𝗻𝗱 𝘀𝗮𝗹𝗮𝗿𝘆 𝗯𝗮𝗻𝗱𝘀 Without a well-defined job architecture and corresponding salary bands, it’s hard to compensate employees fairly. The absence of clear structures leads to inconsistencies, particularly when hiring new employees or promoting from within, resulting in potential salary discrepancies for similar roles. A well-structured framework ensures transparency and equity in pay across the organisation. 4️⃣ 𝗕𝗲 𝗰𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝘁 𝗮𝗻𝗱 𝗿𝗶𝗴𝗼𝗿𝗼𝘂𝘀 𝘄𝗶𝘁𝗵 𝘀𝗮𝗹𝗮𝗿𝘆 𝗿𝗲𝘃𝗶𝗲𝘄𝘀 Not conducting salary reviews with rigour, is another common mistake. Inconsistent reviews can lead to growing salary imbalances and missed opportunities to address issues proactively. This is especially common amongst smaller, faster growing companies with limited HR processes, where I sometimes see companies rushing pay reviews “for speed”. Reviews help demonstrate a commitment to employee development and retention. They’re worth the effort. What steps have you taken to improve compensation reviews?

Once, as new compensation manager, my boss asked me to present to leaders about the company's compensation philosophy 𝘞𝘩𝘢𝘵 𝘢 𝘥𝘪𝘴𝘢𝘴𝘵𝘦𝘳 The preso lacked the right balance of strategy & practical application I wanted to kick a small rock Since then, I created a framework for establishing & communicating a compensation philosophy effectively: 1️⃣ 𝗝𝗼𝗯 𝗹𝗲𝘃𝗲𝗹 across the org and invest in reliable 𝗺𝗮𝗿𝗸𝗲𝘁 𝗰𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗱𝗮𝘁𝗮 to establish pay bands. You get what you don't pay for - free market data (e.g., crowdsourced) = poor quality data 2️⃣ 𝗠𝗮𝗿𝗸𝗲𝘁 𝗽𝗲𝗿𝗰𝗲𝗻𝘁𝗶𝗹𝗲𝘀 𝘁𝗮𝗿𝗴𝗲𝘁𝘀 - Select a market percentile to target by job family - consider if you want to 'meet the market' (i.e., target 50th %ile) or 'lead the market' (i.e., target 65th %ile) for jobs like engineers that are more difficult to find talent for. 𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝘀𝗸𝗶𝗹𝗹𝘀𝗲𝘁 𝗷𝗼𝗯𝘀 - Identify what roles require more difficult to find skillsets and potentially target a higher market percentile for those jobs. The selected market percentile is used to establish the midpoint, but there's a range (minimum and maximum) that goes along with it. Where an employees fall along the range depends on various factors like performance & experience. 3️⃣ Decide on the 𝗺𝗮𝗿𝗸𝗲𝘁 𝗱𝗮𝘁𝗮 𝗰𝘂𝘁 𝗮𝗽𝗽𝗿𝗼𝗮𝗰𝗵 - local country data or geographic differential (e.g., X% of US national average) based on cost of labor & cost of living 4️⃣ 𝗖𝗼𝗹𝗹𝗮𝗯𝗼𝗿𝗮𝘁𝗲 𝘄/ 𝗹𝗲𝗮𝗱𝗲𝗿𝘀 & 𝗿𝗲𝗰𝗿𝘂𝗶𝘁𝗲𝗿𝘀: Foster open communication between People teams and leaders to address concerns and find solutions together, then tweak salary ranges, as needed, to best meet needs 5️⃣ 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗲 and be 𝘁𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝘁 about the companies principles & goals related to compensation but no need to share all inner workings. Communicate how & when pay decisions are made, as well as other total rewards components available to employees (both monetary & non-monetary). Crafting a 𝗰𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗽𝗵𝗶𝗹𝗼𝘀𝗼𝗽𝗵𝘆 is the backbone of a successful pay program. Communicating it effectively results in good pay decisions, ensures fairness, and helps attract and retain your most valuable asset - your people. Below is a resource for managers:

After spending years working in the corporate landscape, I've compiled an all-encompassing guide on why companies may not give increments to long-standing employees: Introduction: - Understanding the complex factors behind salary increments for veteran employees. Step-by-Step Process: 1. Evaluate Company Performance: Many organizations tie salary hikes to overall business performance. If profits are down, raises might be limited. 2. Analyze Industry Standards: Companies sometimes align their salary increases with industry norms, which might not favor long-term employees due to market volatility. 3. Conduct Internal Equity Assessment: Organizations may perform assessments that consider equity among employees in similar roles, possibly sidelining long timers. 4. Understand Budget Constraints: Many companies face strict budget limits, leading to decisions that may not favor veteran staff. 5. Engage in Succession Planning: If a company is focusing on promoting newer talent for fresh perspectives, long-term employees might not see increments. Common Pitfalls: - Focusing solely on tenure: Many employees believe longevity guarantees increments, but performance often takes precedence. - Underestimating external market influences: Changes in the job market can impact internal salary structures, regardless of employee loyalty. Pro Tips: - Regularly schedule performance evaluations to advocate for your worth. - Stay informed about industry trends and company performance to align expectations. FAQs: - Why did I not receive an increment despite excellent performance? Increment decisions involve multiple factors, including budget and market position. - What can I do to improve my chances for a raise? Focus on continual professional development and open discussions with management about your contributions. Whether you're a seasoned professional or a new entry-level employee, this guide is designed to help you navigate the reasons behind salary decisions effectively. Have questions or want to add your own tips? Drop them below! 📬

What are the Key Employee Compensation Metrics? Tracking the right compensation metrics helps in maintaining a competitive and fair pay structure in your organization. Here are five critical compensation metrics every HR professional should monitor: 1. Compa ratio is a comparison of an employee’s salary to the midpoint of a salary range for a specific role. It helps determine whether employees are paid fairly relative to the market and within the company’s pay structure. 2. Pay Equity Ratio measures the equity of pay across different demographic groups (e.g., gender, ethnicity) in similar roles. It ensures that there are no unintentional pay gaps, promoting fairness and compliance. 3. Salary Range Penetration shows where an employee’s salary falls within their designated salary range. It helps assess whether employees are being paid appropriately based on experience and tenure. 4. Total Compensation Expense as a Percentage of Revenue: It is the total employee compensation costs divided by the organization’s total revenue. This metric offers insights into how much of the company’s revenue is being spent on employee compensation, helping optimize budgets. 5. Promotion Pay Increase Rate: It is the percentage increase in pay that employees receive when promoted. Promotion pay indicates whether promotion-related pay adjustments are competitive and aligned with employee expectations. Read more about employee compensation metrics in this guide here: https://lnkd.in/dhpSgU48 #HR #HumanResources #EmployeeCompensation #HRMetrics #HRStrategy #CompensationAnalysis #TalentManagement #PayEquity #EmployeeBenefits #HRBestPractices #CompensationManagement

True pay transparency involves educating your employees about your pay structure: the why, what, and how. To begin this process, start at the top. Leadership should be well-versed in the company's compensation philosophy and strategy. They should be able to articulate the rationale behind pay decisions and communicate it effectively to their teams. #PayTransparency #Compensation #Salary https://lnkd.in/gfP8RFDg

True pay transparency involves educating your employees about your pay structure: the why, what, and how. To begin this process, start at the top. Leadership should be well-versed in the company's compensation philosophy and strategy. They should be able to articulate the rationale behind pay decisions and communicate it effectively to their teams. #PayTransparency #Compensation #Salary https://lnkd.in/gg3tTXqg

Conducting a compensation analysis is essential for building a competitive and fair pay structure that attracts and retains top talent. Here’s a step-by-step guide to help you assess and optimize your company’s compensation practices. Step 1: Define Your Benchmark Roles Start by identifying key roles and job positions within your organization. Make sure the roles you analyze are clearly defined by responsibilities, skills, and experience levels so you can accurately compare them to the market. Step 2: Gather Market Data Use reliable sources like industry surveys, government data, and compensation databases (such as Salary.com, PayScale, or the Bureau of Labor Statistics) to gather salary information. Focus on data for similar positions in your industry, company size, and geographic region. Step 3: Analyze Internal Pay Equity Look at how employees in similar roles are paid within your organization to ensure internal equity. Address any disparities to make sure compensation is fair across departments and employee demographics. Step 4: Compare Your Data to Market Rates Take the market data you’ve collected and compare it to your current pay structure. Identify any significant gaps where you may be underpaying or overpaying relative to the market average. This comparison helps determine if adjustments are needed to stay competitive. Step 5: Consider Total Compensation Salary is just one part of compensation. Review other elements of your total compensation package, including bonuses, benefits, stock options, and perks. Make sure your full package is aligned with market standards, as many candidates consider the entire package when evaluating job offers. Step 6: Adjust Compensation Where Needed Based on your analysis, make adjustments to bring salaries in line with market standards. Prioritize high-impact roles where under-compensation might lead to turnover, or for positions critical to achieving your company’s goals. Step 7: Create a Long-Term Compensation Strategy Regular compensation analysis is crucial to staying competitive. Establish a schedule for reviewing compensation (e.g., annually or bi-annually) and build a strategy that aligns with your company’s growth and budget. Why Conduct a Compensation Analysis? A thorough compensation analysis ensures your organization’s pay practices are competitive, fair, and aligned with business goals. It helps you attract talent, reduce turnover, and maintain a motivated workforce. Remember, compensation analysis is an ongoing process. By consistently evaluating your pay structure, you can keep your organization’s compensation package in line with industry trends and employee expectations.

Here's how we turned contentious salary discussions into straightforward conversations: Initially, they struggled with inconsistent pay structures. - Employees were confused and dissatisfied. - Morale was low, and turnover rates were high. We started by analyzing their current compensation framework. Identifying gaps and inconsistencies was crucial. We then designed a clear, transparent strategy tailored to their industry standards. Next, we trained managers on how to communicate this new strategy effectively. They learned to discuss pay confidently and transparently with employees. The results were immediate. - Employees understood how their pay was determined and felt valued. - Conversations about salary became straightforward and stress-free. Turnover rates dropped significantly as employee satisfaction increased. The company saw improved productivity and a more positive workplace culture. In the end, a well-structured compensation strategy not only simplified pay discussions but also fostered trust and loyalty within the team. Are HR issues holding back your business growth? Find out the biggest HR mistakes you're making and how to solve them in my free email course, "The HR Transformation Blueprint." Get started now! (link below in the comments).