Apr 22, 2011

WHAT TO COMMUNICATE | Communicating the Benefits

The following is what you should communicate to staff in general and to individual employees.

Staff in General

  1. The organization's salary policy: This will set out the principles followed in setting pay and benefit levels.
  2. The pay and benefits structure: This will define the salary ranges for each grade and the benefits available, including details of the pension scheme and the approach to total rewards.
  3. Methods of grading and regrading jobs: Where job evaluation exists, details will be given of the job evaluation scheme, including how evaluations are carried out and the right to appeal against gradings.
  4. Salary progression: The method by which salaries are progressed within grades or individually.
  5. Incentive/bonus schemes: Details of any incentive, bonus, profit- sharing or share purchase schemes including how bonuses or profit shares are calculated and distributed and the procedures for purchasing shares.
  6. Reward systems and organizational change: How remuneration policy will be affected by mergers/take-overs, change in corporate direction and indeed the bad news of liquidation and closures.

Individual Employees

  1. Job grade or job or career family: What this is and how it has been determined.
  2. Salary progression: The limit to which their salary can go in their present grade and the means by which they can progress through the grade or pay bands, depending on performance or contribution.
  3. Potential: Their potential for higher salaries following promotion, subject to meeting defined performance criteria and the availability of suitable positions. In other words, this information, plus that contained under the heading of salary progression, should create expectations of what staff can get and define the action or behaviour they have to do to get there.
  4. Performance management: How performance and potential are focused, managed and assessed, including details of the criteria used, the method of assessment and the right of the employee to know what his or her assessment is and why it has taken that form.
  5. Salary levels: The reasons for the level of reward they are getting or the salary increase at the last review and what the employee must do to get more.
  6. Benefit statement: The value of the benefits the individual employee receives so that he or she appreciates the level of his or her total remuneration.
  7. Total rewards: Wherever possible, it helps to outline what is in the 'value proposition' for employees - linked to organizational values.
In summary, the aim must be to manage the individual's expectations about the range of factors that affect his or her pay and avoid a situation where she or he is overly focused on one factor alone.
As Figure 1 illustrates, the right balance needs to be struck to ensure that everyone understands what affects their pay. In most organizations this tends to be:
  • job/role size - grade/level in job family;
  • pay markets - for the function by location/industry sector;
  • individual performance - the performance, contribution and capability of the individual;
  • ability to pay - the ability of the organization/sector to pay premium or closer to average rates of reward.
Figure 1: Get the balance right


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