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August 18, 2010
Do Employees Understand and Respect Your Compensation Practices?

In a BLR webinar entitled "Pay Grades and Salary Increases: How to Build a Competitive, Equitable Compensation System in Your Workplace This Year," Dan Kleinman, principal of Dan Kleinman Consulting described ways to develop compensation packages that are understood and respected by employees.

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Methods for creating open communication with employees:

  • Updated compensation policies appear in your employee handbooks, Human Resources intranets, etc. and other accessible locations for workers to find and review.
  • Employee's performance appraisals include a discussion of compensation issues and questions.
  • Employees receive regular (at least annual) compensation statements that explain their pay and benefits in detail.
  • Job postings contain a clear indication of the pay practices and levels involved.

Methods for developing management support and buy-in:

  • Frontline supervisors undergo regular training in deciphering and applying compensation policies.
  • The Human Resources department provides input on (or directly oversees) compensation policies.
  • C-suite executives regularly review the overarching compensation philosophy of the organization.
  • The organization documents compensation decisions thoroughly.

Methods for developing respect for the compensation process:

  • They do not perceive gross inequities (real or imagined) in the organization's compensation practices.
  • The feel confident that the organization is dealing with compensation challenges in a challenging economy fairly and proactively.
  • The organization does not face periodic flare-ups of discrimination complaints associated with compensation.

Dan Kleinman is the principal of Dan Kleinman Consulting (, a California-based compensation and human resource consulting firm. For the past 18 years he has served a broad spectrum of regional, national and international companies providing compensation, performance, organizational planning and reward-system design services.

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