A Different Kind of "Say on Pay"

Most readers of this blog are probably award of the Say on Pay movement underfoot, which advocates providing shareholders the chance for a vote - binding or not - on executive compensation.

What I am advocating here, however, is a different kind of Say on Pay; that is, creating opportunities to involve employees in the design and review of their compensation programs.

Involving employees - or really anyone outside the core HR team - in program development always takes more time, energy and resources than "going it alone".  And often these participation opportunities must be carefully crafted so that the employees are positioned (via some education and "ramp up" time) to provide effective and meaningful input.  Is it a hassle?  Of course.  Is it worth it?  My experience would suggest that it nearly always is, with payoffs in trust, acceptance, satisfaction and overall program credibility.

There are lots of ways to involve employees in program design and review.  Here are a few approaches and activities that I have used, for consideration:

1. Provide employees with a forum to share opinions, ideas and perceptions on a reward program or practices via focus groups.  Without going into all the fundamentals of conducting employee focus groups, let me just say that you'll get more value out of the session if you go in with specific and pointed questions on a limited number of topics, manage the group assertively and insist on professional and constructive participation.  Beyond that, listen to what they have to say - this can be an incredibly rich source of information on how pay practices are perceived "at ground level".  And be sure to follow-up by acknowledging the key themes and points raised, and addressing how/whether the organization is prepared respond to them.
2. Involve a small group of employee representatives to review and provide feedback on pay survey matches (the survey job descriptions) for the jobs in their department.  For example, if we are conducting a competitive review of Warehouse jobs, we select a small group of seasoned employees who - between them - have a good sense of the work done by the different jobs in the Warehouse department.  We expose them to a bit of education on the process, via a brief "Market Benchmarking 101" course, and then put them to work by looking through and providing comment on an initial set of survey matches.  Some HR professionals will look at a step like this with a high degree of skepticism; for sure, it works best in a high trust environment where employees are accustomed to participation.  With that caveat, I have found it to be a powerful and positive way to involve employees in the process.
3. Have a group of employee representatives serve as an "advisory committee" in directing and designing a custom survey effort.  I have found this to be particularly helpful in circumstances where difficulties in securing good market data via published surveys have led to concerns on the part of HR - and the employees themselves - that we are correctly "valuing" their jobs.  Areas where employees can provide useful input to the survey effort include reviewing draft survey job descriptions and suggesting comparison companies to be solicited for survey participation.  (Of course, with all custom survey efforts, it is important to be aware of and follow anti-trust guidelines.)

Those are a few of my ideas and experiences.  Anybody else with success stories on employee involvement in reward design to share?

Comments

[Wally Bock]

I picked this post as one of my top five posts of the week on the Three Star Leadership Blog.

http://blog.threestarleadership.com/2008/03/12/31208-a-midweek-look-at-the-business-blogs.aspx

[Ann Bares]

Thanks, Wally!

Any readers who aren't familiar with Wally's "Midweek Look at Business Blogs", be sure and check it out at:

http://blog.threestarleadership.com/2008/03/12/31208-a-midweek-look-at-the-business-blogs.aspx

Wally does the heavy lifting for us, bringing us the best he finds together for our enjoyment and learning.