How to communicate compensation changes so employees know what to do

3 ways to enhance business performance through clear communication

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If you’ve ever remodeled your home, as I did earlier this year, you know the process is both exciting and nerve-wracking. That’s because change — even when it’s positive — can be stressful.

In the end, my renovation was a big success thanks to my builder. He kept me posted every step of the way. As a result, my husband and I knew the critical “whens”: when we had to make key decisions, temporarily move out and unpack our dishes in the new cabinets. All because of clear communication.

You can apply the same principle when communicating compensation changes. That way, employees will know how to be successful, help the organization prosper and boost their earnings.

Here are three ways to effectively communicate compensation changes:

1. Understand your audience

Just as my builder knew my family would be affected by demolition and rebuilding, you need to know your audience.

To communicate effectively, it’s important to identify which groups will be impacted by compensation changes. Identify your key stakeholders — define who’s in and who’s out. Put yourself in the shoes of employees in each group. Answer the following questions:

· Who needs to know this information?

· What’s on their minds?

· What do they need from us?

Start with your knowledge of your organization. Then, make use of available data — channel participation, metrics and survey results — to analyze audience needs.

When you start thinking about your audience, you’ll naturally begin to think about the channels that will best serve your employees. You will also need to consider whether certain audience groups — such as managers and leaders — should play a role in communicating. (More on that later.)

2. Develop a communication campaign

My builder called me, sent text messages and emails throughout the renovation project. And he used language I understood without a degree in construction management.

This was critical because communicating about any change requires ongoing support. Messages need to be reinforced over time in a variety of channels.

Here are the essential elements of a campaign. You can use these when communicating about compensation:

· Key messages — Communicate clearly and avoid jargon. For example, talk about pay rather than compensation.

· Theme — Create a tagline to inspire and engage

· Design — What look and feel will you use in your communication materials? Consider your organization’s overall branding.

· Channels — Communicate across multiple channels, including:

o A series of email announcements targeted to your key audiences. Be sure to keep them brief and incorporate your campaign’s branding. Use subheads, bullets, and callouts to make your emails scannable.

o Guides that provide details of the changes and how the plan works. Create guides for your target audiences by role and level, as appropriate. Provide earning scenarios that reflect real situations so employees can see themselves in the example. Create personas of fictitious employees, including a name, photo, title and an overview of his/her performance. Then, do the math. Take employees through the calculations so they understand their earning potential. And be sure to include a set of frequently asked questions based on what the average employee needs to know.

o A one-pager to provide a quick overview. This is a handy tool that employees can reference throughout the plan year.

3. Support managers in their communication role

As the person in charge of the renovation, my builder embraced his role as a communicator. And not only with me: he also provided his team with clear direction.

Employees look to their managers for answers during times of change. Although most managers have good intentions about communicating with their employees, many find it difficult to fulfill this role. There are four main reasons why managers don’t communicate (or don’t communicate well):

· They don’t know their role

· They lack essential skills

· They don’t understand the topic

· They aren’t held accountable

You can help managers overcome these obstacles. Coach them on their communication role, and set them up for success with a toolkit that gives them the information and resources they need to communicate effectively with team members. These are the elements you’ll want to include in your manager toolkit:

· A message from the CEO or CHRO

· Details on the importance of the manager’s communication role

· Key content (elevator speech and talking points)

· Core presentation deck

· A one-page overview

· Frequently asked questions

· A discussion guide — including scenarios like the one above

· Invitation to send to employees for their learning session about the plan changes

Be sure to conduct a briefing session to help managers understand how the compensation plan works and review elements of the toolkit. Do not skip this important step by simply sending the toolkit to managers as an email attachment. It’s likely to get buried in their inboxes and if they do open the email, they may not know how to make the most of all the great materials you worked so hard to create.

Bonus tip: Measure, measure, measure

My builder asked for feedback during the many months of my project. You should do the same.

Measurement helps you understand if you achieved your objectives and can inform future efforts. To evaluate the effectiveness of compensation communication, you can use several measurement methodologies.

Email metrics — Use quantifiable measures used to track usage/email opens.

Spot surveys — Field after manager briefing sessions.

Focus groups — Conduct three to five sessions to gather employee insights.

Interviews with managers — Talk with managers to gain feedback on the toolkit and resources.

Employees need to understand compensation changes so they can perform well, earn more and drive business results. Effective communication is key. It starts with analyzing your audience and developing a robust communication campaign using a variety of channels. Because employees rely on their managers during times of change, you need to provide them with the tools and resources they need to embrace their role as communicators.

Follow this approach, and your employees will know what they need to do to maximize their earnings and achieve the organization’s goals.

Alison Davis is founder and CEO of Davis and Company, the award-winning employee communication firm. Visit to know more.

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