The NASPP Blog

A few weeks ago, in the NASPP Blog entry “CEO Pay Ratio: Planning for Employee Communications,” I wrote about planning to communicate with employees on the topic of the upcoming CEO pay ratio disclosure. Since my initial post on this subject, I’ve come across some helpful content that is further food for thought when contemplating a communication strategy.

I keep hearing that companies have a range of emotions about communicating around the disclosure. In particular the concept of discussing the median employee aspect of the disclosure seems to trigger words like “panicked,” “petrified,” and “concerned.” It seems many companies do worry about how their employees will react to information about the median employee’s compensation.

Two recent blog posts by Margaret O’Hanlon, CCP further explore what you should and shouldn’t say to employees about the CEO pay ratio disclosure (thanks to the CompensationStandards.com’s Advisor’s Blog for leading me to this information.) Some of the ideas O’Hanlon explored are:

In her first post (“Imagine CEO Pay Ratio Communications Going Well“), O’Hanlon suggests that instead of focusing on a panicked state or reluctance to communicate about this (and asking yourself the question “What good can come of this?”), ask yourself “What can I make of this?” Changing your focus should pave the way to different insights.

She also suggests imagining employees approaching the disclosure with the following reactions:

• Not immediately overreacting to the numbers
• Being willing to listen to the rationale for the numbers with an open mind, even though they are skeptical (or more)
• Being able to spend a limited time mulling over with their colleagues what they have heard
• Not going on social media to comment on the announcement

In her second post (“Imagine CEO Pay Ratio Communications Going Well – Part 2“), O’Hanlon offers a number of concrete suggestions for talking about the ratio with employees. Here are a few of her suggestions:

• Prepare your employees. If you don’t, the CEO Pay Ratio and median employee information is bound to be a shock.
• Use end-of-the-year focal review and merit pay communications. Articulate, repeat and reinforce what you do to make sure employee pay is competitive, how your practices are fair and how employee salaries are only one part of your company’s whole reward package.
• Use people not technology. Distancing the message from the personal will leave your company open to employee claims that leadership is ducking responsibility. Identify a spokesperson to present the details of the CEO Pay Ratio, back it up with email or intranet information, but be sure that your communication strategy gives employees a chance to discuss their reaction with someone that they can open up to.

O’Hanlon mentions some other important idea in her blogs; they are definitely worth a read.

The CEO Pay Ratio disclosure time frame will be here before we know it, and companies are running out of time to take advantage of some of these proactive communication opportunities. It’s time to get ahead of the disclosure, imagine this going over well with your employees, and take realistic steps in advance to ensure the messaging results in a positive experience for employees, rather than a communication fail.

– Jennifer