Inclusive Environments

Most often found at the end of D, E&I, or the middle of DIB (Diversity, Inclusion and Belonging), inclusion 4 Ways To Improve Your Company’s Inclusion, Diversity And Equity Strategy (forbes.com) is a well-worn word these days.  While Diversity is quantitative in nature, fairly easy to measure, and lends itself to granular analytics, Inclusion is more qualitative and so while we all agree it is important, many have struggled with how it should be assessed.  You have worked hard to create a diverse workforce but retaining them requires that you work equally as hard at providing an environment where everyone feels included.  

Inclusion What is Inclusion? – Equity, Diversity, and Inclusion – LibGuides at Austin Community College (austincc.edu)is providing a work environment where all people feel respected, accepted, supported, and valued, allowing all employees to fully participate in decision-making processes and development opportunities within an organization, and is a challenge to measure.

Gartner www.gartner.com proposed the following holistic questions which accurately assess the organization’s feelings around inclusion.  They can be asked individually in quick pulse surveys to certain teams or on an annual basis across the whole organization.

  1. Fair treatment: Employees at my organization who help the organization achieve its strategic objectives are rewarded and recognized fairly.
  2. Integrating differences: Employees at my organization respect and value each other’s opinions.
  3. Decision making: Members of my team fairly consider ideas and suggestions offered by other team members
  4. Psychological safety: What Is Psychological Safety at Work? | CCL  I feel welcome to express my true feelings at work
  5. Trust: Communication we receive from the organization is honest and open.
  6. Belonging: People in my organization care about me
  7. Diversity: Managers at my organization are as diverse as the broader workforce.

While many of the above questions seem qualitative and anecdotal in nature there are clear actions, we can take to ensure successful outcomes.

  1. Conduct pay equity analyses at least annually to ensure all employees at paid equitably in relation to each other 
  2. Create clear job descriptions and clear guidelines around who is eligible for and who ultimately receives promotions
  3. Train people leaders to listen more than they speak and to draw those who may be quieter into the conversation
  4. Enable small acts of kindness- Random Acts of Kindness | Welcome a handwritten note, flowers, a sincere thank you
  5. Create mentorship and reverse mentorship programs where a person can apply to be mentored or to be a mentor to a senior-level executive.  Many white males cannot possibly understand what it is like to be a woman or a Black male or female in corporate America.  Allow them the opportunity to begin to understand.  

This is not a check the box exercise, it is a journey and likely a long one, but each step along the way will provide its own rewards!

The Case for Transparent Compensation Practices

sherrie-suski-conversation

Years ago you could find policies written in Employee Handbooks threatening termination if you were to speak to another employee about your salary or bonus.  The whole process was hush hush and no one really understood how salary increases or job worth was calculated.  Only the select few could afford the salary surveys that were published annually.  Gone are those days.  Salary surveys for your industry, revenue size, employee size and market are now only a click away.  Compensation is finally coming out of the black box and into the light.  So why should you subscribe to this new trend?

 

It’s the Law

Perhaps the most basic reason is that it’s the law.  Employers can no longer prohibit employees from openly discussing their salaries and bonuses or threaten them with termination for doing so. The NLRB specifically ruled “You cannot forbid employees – either verbally or in written policy – from discussing salaries or other job conditions among themselves. Discussing salaries is considered a “protected concerted activity” by the NLRB and it’s protected regardless of whether employees are talking to each other in person or through social media.”

 

Takes it out of the realm of mystery

There are a myriad of other reasons that you shouldn’t prevent employees from understanding their own salaries and others.  One of those, is that it shouldn’t be a mystery. Employees should understand that creating salary structures is a science based on market data.

 

Encourages well thought out salary ranges and structures

Once you know that you aren’t the only one looking at and depending on the salary structures to make hiring decisions, give increases and calculate promotions, it behooves you to take an extra hard look at your structures.  Could you defend them to the outside world?  Are they updated?  Have you properly defined your market?  Does the work force slot in where they should with no one falling below the minimum and only a few over the top?

 

Defocuses people on pay disparities

Employees can spend an alarming amount of time thinking about pay and whether they are compensated fairly to both the market and the person sitting next to them.  Being transparent about you pay practices puts people at ease.  They trust that they are paid fairly because they understand the process and have full access to the data.

 

Better management of promotional opportunities

Employees will frequently bid on jobs without have any concept of whether the job they are bidding on is actually above or below their current job in terms of salary grades.  By allowing employees to have access to the structures, you decrease the number of bids you get for jobs that, once the employee finds out it is a decrease in pay, is no longer interested.  

 

There are many reasons to run a more transparent compensation practice, but perhaps the biggest is trust.  When you are trying to build a culture of trust, it is significantly easier when you are open and willing to answer the questions your employees have.

 

Doling Out Dollars

sherriesuski_dollarsIt’s merit increase time again.  “How hard can doling out dollars be?”, you think.  The budget is 3%, just give everyone on your team 3%, right?  Well, maybe, but let’s talk about a better way to evaluate and incentivize your team members.

Compensation is a blend of a science and an art.  Let’s talk about the science part first.  Done correctly, there should be salary ranges for your organization and sometimes multiple sets of salary ranges, depending on the physical locations in which you operate. These salary ranges should have been created by knowing your overall target market percentiles and the value of each job that you are slotting into your ranges in the market. It is often helpful to create a matrix for your managers to use when considering merit increases.  The performance rating should be on one axis and the quartile position in the salary range on the other axis. Keep in mind that the matrix is usually only a guideline.

Screen Shot 2017-01-24 at 10.54.32 AM

As employees move through their salary range, their salary growth should slow.  Someone who is performing at a 4 level, fully competent in their position, and in the 1st quartile, should receive a greater percentage increase than someone who is performing at the same level but is already in the 4th quartile.  Don’t be afraid to be open about this with your subordinates.  Compensation should not be a mystery.  Employees have a right to understand how their merit increase was calculated.  This can also open the door for conversations about career growth and additional responsibilities they could take on to move to the next salary grade.

Aside from merit increases, there are usually two additional types of increases that can happen.  One is a promotion, which is simple enough.  Someone is moving into a different position in a higher salary grade or is moving to a more senior position within their same job family.  The second type of increase is the market adjustment.  Perhaps the most misunderstood type of increase.  A market adjustment is not a way to give your employees more money without going over your merit budget, as many new managers believe.  A market adjustment is specifically used for an employee who is performing competently in their position, but is very low in their range.  Many organizations will restrict market adjustments to employees who are performing at a level 4 or 5 and are in the first quartile of their salary range.  This increase, in addition to the merit increase should bring the employee to the 2nd quartile or as high as the midpoint of the salary range.

The last topic is a merit increase that is called lump sum or one time merit increases.  There are pros and cons of implementing lump sum increases.  

These types of merit increase are reserved for employees performing at a level 4 or 5 and at the very top of their range.  The theory is you are already paying these employees above the 100th percentile of the market and do not want to continue to increase their base salary. You do, however, want to continue to reward and incentivize them.  If you decide to implement lump sums, they are usually given at about ½ the amount of a regular merit increase and paid all at one time at the beginning of the year.

So, now you know, doling out the dollars, can be a little more complicated than just giving everyone 3%, but, done correctly, you can continue to incentivize your best employees!