Employees are now released to discuss their pay with each other. Allowing that freedom among workers who already have a skewed idea of what is fair poses lots of employer challenges. Human Resource leaders will have to deal with this new tête-à-tête eventually and would be smart to do it strategically.
It’s the law.
Section 7 of the National Labor Relations Act (NLRA) assures employees the right to discuss their wages with others. Subsequent court decisions extend the right to discussion outside the workplace, including doing so on social media, through emails, and in blogs. Section 8 of the NLRA prohibits employers from any form of retaliation.
What can you do?
- Any handbook or orientation policy interfering with this right is obsolete and risks NLRB censure. The business may still bar any conversation during work if there is a bone fide defense.
- Policy may prohibit employees from communicating disparagement of company services and products online.
- Develop a strategy that uses the employee discussion instead of forbidding it.
When fair is a floating standard?
Laurie Blenstock of Towers Watson writes on WorldatWork.com, “Employees who believe they are paid fairly compared with people in either their company or other companies are 4.5 times as likely to be highly engaged as people who do not believe they are paid fairly.”
Dave Smith writing for Harvard Business Review reports on Payscale.com research, “One of the top predictor’s of employee sentiment is a company’s ability to communicate clearly about pay.”
- 64% of employees who are paid market rates feel they are paid unfairly.
- 80% of people being paid above market rates feel they are paid at or below the market.
- 17% paid below the market believe they are being paid at or above the current market.
- 18% of women who are paid above the market rate believe they are being paid less than male co-workers in the same pay bracket.
Such numbers among 71,000 employees surveyed suggests how fluid the concept of “fair” remains and how basically irrelevant the correlation is between perception and fact.
Master the compensation conversation.
You need to master the conversation about compensation because it is what it is and will continue under new protections. If management leadership doesn’t control the conversation, it will control the organization.
Structure an Employee Value Proposition (EVP) that helps employees perceive their individual part in the structure, purpose, and outcomes of the organization. Done right, the EVP is a reciprocal synergy with the employee valuing the business in return for being valued. That is quite a spin on the traditional ethos of paying employees for their time and production.
Build employee brand identity. Corporations have encouraged employees to align themselves with the corporate brand. They have taught them to be proud to work with a well-known label and to build employee loyalty by stressing the individual value in that. You build employee brand identity by focusing on what performers bring to the success. Their profile becomes a desired brand.
Promote the total reward package. Successful employers offer many costly benefits beyond those mandated by law. It benefits employer and employee when you regularly communicate the details of the hidden compensation: holiday pay, paid vacation, group health benefits, retirement plans, and more. Additional compensation includes the administrative costs of all such benefits.
Specify the work rewarded. (based on an SHRM 4/26/2011 webcast).
- Name behaviors rewarded and recognized.
- Align work with advancement of the corporate promise to the market.
- Visualize the connection between respective jobs and business outcomes.
- Make growth and learning a felt compensation.
- Show employee’s position in the future.
A business need not fear its labor force when it is confident in its total Employee Value Proposition. However, it stands to lose if it does not maximize the scope and frequency of its communication to that workforce. This tie to employee potential creates and sustains their engagement, improving retention as you strengthen their value.
Payscale has an interesting infographic here, The Surprising Truth About Employee Engagement.
