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Using HRIS for Compensation Transparency

Instead of hiding compensation facts, employers can use HRIS to control how compensation transparency is handled.

compensation payroll

In the past, most companies had some policy, whether written or unwritten, discouraging employees from talking about compensation. What many companies failed to realize, however, is that there is a federal law – Section 7 of the National Labor Relations Act – that specifically protects employees’ right to speak with one another about compensation without fear of repercussion. Instead of hiding compensation facts, employers can use HRIS to control how compensation transparency is handled.

Make Pay Information Accessible to All

An HRIS can be used to easily make payroll information accessible to all. Including a chart with positions, salaries, median incomes for the industry, and other pertinent information can ensure that all employees are able to access compensation information. Even if individual names are left out of this chart and the information is generalized, it can help employees to get a better feel for where they and their coworkers stand when it comes to compensation.

Tackle the Fairness Dilemma

One of the biggest reasons that employers often try to keep compensation information hidden is that many employees perceive differences in salary to be unfair. Instead of avoiding this conversation though, tackling it using modern technology may be more effective. By showing employees exactly what they are getting paid, how they could get paid more, and what is attainable if they accomplish certain tasks or complete specific training can be motivating and can help employees to better understand why their compensation is fair.

Show Employees the Big Picture

HRIS can be strategically used to show employees how they – and their compensation – fit into the big picture. Creating an outline that shows specific behaviors, how these behaviors contribute to company outcomes, and then shows how company outcomes make it possible for employees to grow and prosper can help to promote understanding and clarify expectations. Sharing this formula can help employees to think outside of the simple “work for pay” equation.

Highlight Other Company Perks

While salary is the only piece of compensation that is generally discussed, many workplaces offer compensation beyond salary. Paid time off, company vehicles, assistance with childcare, free meals, and many other perks may be ignored when it comes to discussions about compensation, but can actually be important driving factors for retention and satisfaction. Including these perks along with other compensation information can help to influence employee perspectives regarding fairness.

Encourage Communication about Salary

Taking a proactive approach to questions about fairness and reasons behind pay differences can help to foster an open door policy in which employees trust their employer’s motivations and intentions. Encouraging employees to communicate using HRIS messaging tools or by coming to managers and HR professionals in person can help employees to feel that their concerns are being addressed and can further help employees to feel that company compensation is fair. HRIS messaging may also serve as a low pressure way for employees to express concerns.

Essentially, the atmosphere surrounding compensation transparency is changing, so employers may work to use this change to their advantage by taking charge. Using tools like HRIS to simplify communications regarding compensation can only make the transition easier.

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