How to Communicate Changes in Pay and Benefits Programs Effectively

In a previous article, How to Optimize Retention When Restoring Pay and Benefits Cuts, we stated that an effective strategy for communicating change - whether in pay and benefits programs or in other programs - has two important components: the actions and behaviors of leaders, and the spoken or written words. The former carries more weight than the latter - i.e., employees believe what they see rather than what they are told. That article addresses actions and behaviors. In this article we identify some best practices for verbal and written communication of organizational change

I do not discount the importance of the words used to describe and support change. To the contrary, language is critical: used effectively, it can accelerate the intended changes. The key point is that the words must be backed up by behaviors, especially by organizational leaders. With that in mind, here are nine best practices for communicating changes in pay and benefits programs:

  1. Develop a communication strategy that enables employees to understand the value of their total compensation package. By "strategy" I mean a well thought-out and articulated plan that is supported by leaders who are active advocates for its implementation. This communication must be on-going.
  2. Communicate throughout the organization. Employees at all levels must understand clearly how the changes will affect their individual pay and benefits package.
  3. Focus on answering the question, "What's in it (the changes) for ME?" The operative word is "me:" pay is very personal, and people want to know how their lives will change - for better or worse - as a result of the modifications to their pay and benefits.
  4. Use multiple media. Individuals have different learning styles, so using a variety of media increases the likelihood that your message will be received as intended.
  5. Watch your language. As noted above, language can help or hinder the effectiveness of your communication efforts. For example, consider the differences between referring to compensation and benefits as a "cost" versus describing them as an "investment." When we speak in terms of costs, the focus is on cutting expenses, which include pay and benefits by virtue of the fact that they often are considered costs. The problem is that there is a limit to how much an employer can cut pay and benefits. In addition, such actions destroy management's credibility and trust; they also send morale into a tailspin, and productivity plunges as employees pull back and focus on what they cannot do. In contrast, there is no upper limit to the potential benefits of "investing" in a total rewards program. The focus is on seeking what employees and the organization CAN do instead of what they cannot do. Employees feel valued because the message being conveyed is, "We are investing in you because you are valuable to the organization."
  6. Communicate frequently and clearly. This point cannot be overemphasized, especially in an environment of low or no trust. Tell employees what they need to know to be fully informed about their pay and benefits. Answer the question, "What does this change mean for ME?"
  7. Ask for, and listen carefully to, employee feedback. People are more likely to accept changes when they have had meaningful opportunities to provide input into decisions that affect them. Provide multiple means for employees to convey their suggestions. Be sure to respond to that feedback, whether the answer is "yes," "no," or "not now." Responsiveness increases management's credibility and trust.
  8. Set clear expectations, then meet or exceed them. Be honest, telling employees as much as possible. Keep them informed. Unmet expectations destroy trust and credibility, so make sure you avoid the mistake of over-promising and under-delivering.
  9. Educate first-line managers and supervisors about the changes. They are the people to whom your employees will turn with their questions, so you must provide them with the tools that will enable them to give accurate answers in a timely manner.

Pat Lynch, Ph.D., is President of Business Alignment Strategies, Inc., a consulting firm that helps clients optimize business results by aligning people, programs, and processes with organizational goals. You may contact Pat or call (562) 985-0333.

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