To plan any kind of communication, you begin with the end in mind. Yes, it's an act of imagination. Yes, I know that compensation practitioners don't feel comfortable with imagination but, face it, you worry too much. Really, most anything you cook up about the employee reaction to the CEO Pay Ratio will be down-to-earth rather than fantasy. You know too much about your employees and company to conjure up something that is purely make-believe, and you can't know what you want to measure before you know what you need to achieve.
Having a mental picture of success will prepare you to create the blueprint you'll need to get you there. You already know that for the CEO Pay Ratio this isn't going to be like any blueprint you've used before, so surrender to the fact that the communication outcome must, by definition, be different, too.
From what I hear, many organizations are feeling panicked at the prospect of taking on CEO Pay Ratio communications. After all, you're bound to get stuck if you keep thinking, "What good can come of it?" But if you change the question to, "What can I make of this?" you've got a better shot at acquiring some insights.
Feel like your required outcome is to get employees to agree with the pay ratio? No wonder you feel stuck, your worries have merit. There is a library of research that indicates people are HARDWIRED to react with envy at most multiples you will have to share.
We've talked about the human impulse to "anchor" at the Cafe before. It's our impulsive behavioral bias to use a number as a psychological benchmark. You say 180%, and I immediately consider that number my absolute rule of thumb. It's immediately clear that I'm a loser. If you think your job is to block my impulse, now you've have a belief that would qualify as a fantasy. But if you ask yourself, "What's the best I can achieve knowing that I have to deal with this reaction?" then you have a better shot at focusing on an outcome that can help you and your company's culture.
Personally, I think the median employee communication is going to get as big a reaction as the CEO Pay Ratio, or even bigger. Reacting to the median salary as an anchor, employees who are paid less will have a whole range of reactions from envy to fear (I guess my job doesn't really matter). Employees who are paid more may feel condescension or superiority. Note, none of these feelings are shown to improve productivity.
So what good CAN you make of it? Well, your blueprint can address what employees DO after the announcement, which you are much more likely to have some influence on than their strong impulsive reactions. When it comes to imagining what employees could do that would be more constructive than feeling without thinking, my mental picture includes employees who:
- Don't immediately verbally overreact to the numbers
- Are willing to listen to the rationale for the numbers with an open mind, even though they are skeptical (or more)
- Are able to spend a limited time mulling over with their colleagues what they have heard
- Won't go on social media to comment on the announcement
How can you accomplish these outcomes? I'll be back just before Halloween with some thoughts.
Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. Margaret is a Board member of the Bay Area Compensation Association (BACA). She coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.
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